Holdback

Definition

• An amount of money withheld by the lender during the progress of construction of a house to ensure that construction is satisfactory at every stage. The amount of hold-back is generally equivalent to the estimated cost to complete construction.

Synonyms
retention fund

Related Terms and Acronyms

• Construction Budget — Definition,
  • Money that the builder sets aside for building a structure.
• Construction Loan — Definition,
  • A short-term interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
• Construction to Permanent Loan — Definition,
  • A loan that finances the construction, then for a long-term, traditional mortgage, as distinct from a construction loan followed by a separate mortgage loan.
• Lien Holdback — Definition,
  • The practice of mortgagees withholding up to 15% of mortgage monies advanced on new construction.
• Quantum Meruit — Definition,
  • Used in contract law it means "reasonable value of services."