A release clause is a provision commonly found in mortgage agreements that allows a borrower to obtain partial release of the collateral securing the loan upon the repayment of a portion of the debt. This provision is often associated with loans involving real estate. Among the options provided, the loan type most likely to contain a release clause is:
Commercial Real Estate Loan
Commercial real estate loans are typically used to finance the purchase or development of commercial properties such as office buildings, retail centers, or industrial facilities. These loans often involve substantial amounts of money and complex financing arrangements. A release clause in a commercial real estate loan might allow the borrower to obtain partial release of individual parcels or units within a larger property development upon repayment of a portion of the overall loan amount. This can be advantageous for developers who want to sell or refinance portions of the property before the entire loan is repaid.