Tandem Loan

AAA

DEFINITION of 'Tandem Loan'

Two loans taken out on one asset, which is usually a house; the secondary loan is normally added to a primary loan. A tandem loan may also refer to a lending facility that enables businesses to bridge the gap between commercial loans and other sources of funding, with loan proceeds used for working capital, acquisitions, or land and equipment. They could provide monetary assistance to builders and developers of nonprofit public housing.

INVESTOPEDIA EXPLAINS 'Tandem Loan'

A specific type of tandem loan is the Federal Housing Administration's FHA/VA Tandem Loan, which is only available to veterans for financing single-family loans. Tandem loans should not be confused with a tandem plan, which refers to a mortgage purchase program involving Fannie Mae and Ginnie Mae.

RELATED TERMS
  1. Closed-End Credit

    A loan or extension of credit in which the proceeds are dispersed ...
  2. Commercial Credit

    A pre-approved amount of money issued by a bank to a company ...
  3. Loan Commitment

    A loan amount that may be drawn down, or is due to be contractually ...
  4. Open-End Credit

    A pre-approved loan between a financial institution and borrower ...
  5. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  6. Accessory Dwelling Unit (ADU)

    A legal and regulatory term for a secondary house or apartment ...
Related Articles
  1. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  2. Home & Auto

    New Wheels: Lease Or Buy?

    These two major ways to obtain a car have very different advantages and drawbacks. Find out which is best for you.
  3. Retirement

    Getting A Loan Without Your Parents

    Use the 5 "W"s to finance your dreams without banking on a second signature.
  4. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  5. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  6. Savings

    Why Do Credit Cards Expire?

    Credit cards expire for more reasons than you could imagine – including, so you don't forget you have the card.
  7. Home & Auto

    Strategic Bathroom Enhancements With Huge Returns

    Even modest investments to improve a small bathroom can yield considerable rewards.
  8. Investing

    What is Debt Financing?

    When a company needs to pay for something, it can pay with cash, or it may finance the purchase. Financing means that it gets the money from other businesses or sources, in return for obligations. ...
  9. Home & Auto

    Key Home Upgrades That Make Or Break The Deal

    When making a home purchase, pay attention to key features of the home that either should meet a certain standard or should be upgraded by the seller.
  10. Trading Strategies

    Eyeing a Loan? Consider Skipping the Banks

    Peer-to-peer lending platforms, such as Lending Tree, Lending Club and Prosper, offer borrowers newfound leverage. Here's a look.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center