Enter to open, tab to navigate, enter to select
Leasehold Mortgage
Practical Law Glossary Item 1-507-0619 (Approx. 3 pages)
Glossary
Leasehold Mortgage
A loan secured by a mortgage lien placed on the tenant's leasehold interest. The leasehold mortgage is typically recorded in the county recorder's office in the county where the leased premises are located.
This type of financing is commonly used by a tenant to:
- Construct new improvements on the leased land.
- Renovate existing improvements on the leased land.
Leasehold financing can be used for the construction or improvement of different types of real estate, including:
- Residential property that is income producing, such as multi-family housing.
- Office buildings or office parks.
- Shopping centers.
- Manufacturing facilities.
The lease that is encumbered by the leasehold mortgage lien is usually a long-term lease. Typically, ground leases are financed by leasehold mortgages.