Construction Loan

A loan for financing the cost of construction or improvements to a property; the lender disburses payments to the builder at periodic intervals during construction.

A short-term loan financing improvements to real estate, such as the building of a new home. The lender advances funds to the borrower as needed while construction progresses. Upon completion of the construction the borrower must obtain permanent financing or repay the construction loan in full.

A short-term, to finance the cost of building a new home. The lender pays the builder based on milestones accomplished during the building process. For example, once a sub-contractor pours the foundation and it is approved by inspectors the lender will pay for their service.

Short-term financing of real estate construction, also referred to as an "end loan," generally followed by long-term financing. For this survey, a construction loan is not a mortgage. See also "permanent mortgage;" "piggyback loan."

A short-term, interim loan that provides disbursements to facilitate the construction of a home. Funds are disbursed at intervals as work progresses.