Definition: A due-on-sale clause permits a lender to require repayment after a covered sale or transfer of the property, subject to the loan terms and law.
Example
A proposed transfer prompts review of whether the existing lender may call the loan due.
Keep the distinction clear
Not every transfer permits enforcement; legal exceptions may apply. Taking property subject to a mortgage does not eliminate the clause.
Related terms
Acceleration Clause · Assumption (Mortgage) · Subject to the Mortgage
Keep studying
Mortgages: Borrower, Lender, Ownership, and Key Clauses
References: Fannie Mae: due-on-sale and due-on-transfer provisions
Pronunciation (US): DOO on SAYL KLAWZ (capitals show stress)
Pronunciation reference: Merriam-Webster
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