The provision in a construction loan agreement that requires that a certain percentage of the loan proceeds be held and not disbursed until completion of construction is known as an escrow provision.

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This provision is known as a "holdback" or "retainage" provision, not an escrow provision. Escrow provisions typically involve a third party holding funds or assets until certain conditions are met, but a holdback in construction loans specifically refers to the lender withholding a portion of the loan proceeds until the project reaches a certain stage of completion or meets specified criteria.

The Provision in a Construction Loan Agreement That Requires That