take-out commitment

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Take-Out Commitment

An agreement by a financial institution or another investor to make a long-term loan at a certain, stated date in the future. A take-out commitment may be made in construction or other projects when short-term financing is initially beneficial but the borrower anticipates long-term financing to become more advantageous at a later time.

take-out commitment

A binding agreement by a lender to provide permanent financing at the expiration of the construction financing, if certain conditions have been met.These usually include minimum occupancy levels for an income-producing property.