§25.4 Permanent Loans
Permanent financing may be provided by banks, life insurance companies, and conduit lenders. Permanent loans typically have longer terms than construction loans. A 10-year loan term is common for a commercial permanent loan. Terms longer than 10 years are available depending on the market and type of project, as well as "mini-perms" with terms ranging from three to five years.
Permanent loans generally have the following characteristics:
- Like the construction loan, a permanent loan will be secured by a first deed of trust, security agreement, assignment of leases and rents, and fixture filing against the project.
- For permanent loans against rental projects, such as office buildings, apartments, industrial parks, or shopping centers, the loan documents often include a separate, recorded assignment of leases and rents, which may include provisions restricting, except with the lender's prior consent, the borrower's execution of new leases or modification or termination of existing leases.
- Permanent loans usually require...
