In real estate finance, a Holdback is a portion of a loan that a lender withholds until specific conditions or contingencies are satisfied. These conditions are typically outlined in the loan agreement and may relate to construction progress, repairs, or completion of improvements.
Holdbacks are commonly used in construction and rehabilitation loans to ensure that work is completed as agreed. Once the lender verifies that the required conditions have been met, the held back funds are released to the borrower.
