Question

a type of long term permanent financing for residential construction or large construction projects, that replaces the construction loan is called a (an)

Answer 1

A type of long term permanent financing for residential construction or large construction projects, that replaces the construction loan is called a takeout loan.

What is a takeout loan?

A takeout loan is a method of financing whereby a loan that is procured later is used to replace the initial loan.

More specifically, a takeout loan, or takeout financing, is long-term financing that the lender promises to provide at a particular date or when particular criteria for completion of a project are met.

A take-out loan provides a long-term mortgage or loan on a property that "takes out" an existing loan.

The take-out loan will replace interim financing, such as replacing a construction loan with a fixed-term mortgage.

If the take-out loan is used to finance a rental or income-generating property, the take-out lender may be entitled to a portion of the rents earned.

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