Permanent Financing

Permanent financing (a "perm" loan or "takeout") is the long-term debt placed on a stabilized, income-producing property — terms of five to ten years or more, amortizing payments, and underwriting based on in-place income rather than projections. Banks, credit unions, life insurance companies, agency lenders (for multifamily), and CMBS all compete in this space, each with distinct rate, recourse, and prepayment profiles.

The permanent market is where a property’s capital structure is meant to come to rest, and choosing within it is a genuine trade-off exercise: banks tend to offer flexibility and relationship pricing but want recourse and deposits; life companies offer long fixed terms and non-recourse but conservative leverage; CMBS offers proceeds and non-recourse but rigid servicing. The right answer depends on how long you’ll hold, how much leverage you need, and how much you value flexibility to sell or prepay.

Most of the loans in our county-recorded data are permanent financings, and the Call Report trend tables show which banks are actually growing that book rather than just quoting on it.