Vendor Take-Back (VTB) Financing
A financing arrangement where the seller of a property provides a loan to the buyer to facilitate the purchase.
Vendor Take-Back (VTB) financing occurs when a property seller agrees to lend a portion of the purchase price to the buyer, effectively acting as the mortgage lender. This is typically structured as a promissory note or a mortgage registered against the property, allowing the buyer to secure the asset with less immediate third-party capital.
According to a press release published on Pressonify.ai, the landowner of the Goreway Towers project utilized a VTB structure with a two-year term at 5% interest. This mechanism was used to bridge the gap before the closure of a construction loan, reducing the initial equity requirements for investors.