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Holdback
Portion of a loan held back by the lender until a contingency is met. In the sale of a home insured by V.A. or F.H.A., funds may be held back to make necessary improvements to bring the property to V.A. or F.H.A. standards. The money to make "these" repairs may not be available until closing. One and one halt to double the estimated amount necessary is held back. If repairs are not made in the time allowed. these funds are used to make the repairs. In construction financing, funds are held back until, for example, a certain percentage of a subdivision has been sold, or a certain portion of a building has been constructed.
Holdback
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