A long-term loan taken out upon completion of a new building
Permanent loans work together with construction loans. Here's how it works: land developers who buy large pieces of land to build homes on will first take out a construction loan on the property, which covers the entire lot. Then, when all the buildings are ready to sell, the lender offers each home buyer a permanent loan. Part or all of this money will go towards paying off the construction loan. Permanent loans are also called take-out loans.