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Permanent Financing

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Permanent Financing

A long-term mortgage loan typically secured by a fully stabilized and performing real estate asset. A Permanent Loan (i.e. Permanent Financing) often includes a fixed interest rate with a longer loan term (7+ years). The permanent loan may or may not include an interest-only payment period for part or all of the loan term. These loans almost universally come with a penalty (i.e. yield maintenance, defeasance, % penalty, etc.) for prepaying the loan before maturity and many include a lock-out period early in the loan term during which the borrower is forbidden from prepaying the loan.

Related Content:
  • Glossary: Bridge Loan
  • Glossary: Takeout Loan
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AdventuresinCRE.com (A.CRE) was started by Spencer Burton and Michael Belasco during their first year of graduate real estate studies at Cornell University. The site was initially meant to fill a need for readily available real estate financial modeling tools. Today, it is the web's preeminent real estate financial modeling, careers, and education resource.

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