Construction loan

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Construction loan

An interim loan of money secured by a negotiable bond or mortgage, or trust deed. The money obtained is intended to defray the cost of the building to be erected. Usually advanced in specified sums during the progress of construction. After completion, the loan is often converted into a long-term loan.

construction loan

A loan to a builder for a short term, financing construction prior to permanent financing.
References in periodicals archive ?
Construction loan accounts, said Singer, used to cover on average 80% of the project costs but now developers are challenged to receive any more than 85% financing.
In that position, she was responsible for origination and monitoring of the bank's real estate construction loans.
While the off-book team is able to leverage the expertise and policies and procedures of the on-book team, Fitch is somewhat concerned about its relatively short track record servicing construction loans.
In addition to requiring collateral back up for the recourse portion of the CEI, the financial institution providing the enhancement (which generally also acts as construction lender) will also require that the project's owner/ developer provide a completion guaranty and a limited repayment guaranty in connection with the construction loan.
The National Association of Home Builders appreciates Fannie Mae's efforts in creating the pilot construction loan program during the credit crunch," said J.
30, 2006, Wachovia's construction loan servicing portfolio consisted of 5,237 projects with an unpaid balance of $20.
Under the terms of the construction loan, Lowe was obligated to apply $773,500 of the proceeds from the sales to pay down the first construction loan at First Service.
Working with a local Florida-based mortgage brokerage firm, the Bank acquired numerous nine- to 18-month residential construction loans for individual homebuyers wishing to build a second or retirement home in the Cape Coral area.
One such deal that Smith executed at the end of 2005, was a $105 million construction loan to real estate owner and developer, Metrovest Equities, to acquire the former Jersey city Medical Center and convert it into a residential condominium to be called The Beacon.
The numbers include all recorded construction loans, commercial as well as residential.
CHICAGO -- As analysis of the more speculative construction loans warrants a more discerning eye, so should the analysis of the sector's servicing, according to Fitch Ratings in a new criteria report.
The company prides itself on providing owners/developers with the highest level of service available in the industry in connection with bridge loan financing, acquisition and construction loans and permanent mortgages.
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