Prepayment Penalties

What is an Assumable Loan in Commercial Real Estate?

What is an Assumable Loan in Commercial Real Estate?

An assumable loan is a loan that can be assumed, or taken on, by a new borrower before the end of the loan’s term. Many types of loans are assumable, including most Fannie Mae, Freddie Mac, HUD multifamily, and CMBS loans.

What is Defeasance in Commercial Real Estate?

What is Defeasance in Commercial Real Estate?

Defeasance is a type of prepayment penalty which involves a commercial real estate borrower purchasing income-producing bonds to replace the income the lender loses from the borrower prepaying the loan.