Definition of "Take-out loan"

Marty Welsh real estate agent

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Marty Welshelite badge icon

The Bob Lucido Team, LLC of Keller Williams Integrity

Form of financing that replaces or "takes-out" a construction loan to a developer. The take-out loan is a permanent mortgage loan which replaces the construction loan when, commonly, the builder has successfully sold, at minimum, a majority of the units under construction. A developer must arrange take-out financing before ha can hope to get a construction loan.

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