In one sentence
Long-term, typically fixed-rate financing on a stabilized property, replacing construction or bridge debt.
The longer version
Permanent loans, often called takeout financing, refinance construction or bridge debt once a property is built and leased. Life companies, agencies, and CMBS are the classic permanent lenders.
The move from bridge to permanent is a refinancing closing with its own diligence, and the availability of a takeout is what makes the earlier short-term loan bankable.
Common questions
- What is permanent financing?
- Long-term, usually fixed-rate financing on a stabilized property, replacing construction or bridge debt once the property produces steady income.
- Who provides permanent financing?
- Life insurance companies, CMBS lenders, the agencies for multifamily, and banks, each with different leverage, pricing and prepayment terms.
- When is a property ready for permanent financing?
- When it is stabilized, meaning occupancy and income have reached the levels a permanent lender underwrites, typically demonstrated by a period of actual operating history.
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