construction loan

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Construction loan

A short-term loan to finance building costs.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Construction Loan

A short-term loan used to finance the building of some real estate project. The builders take out a construction loan in order to begin the project while they obtain long-term funding. Because there is no guarantee that the builders will be able to obtain long-term funding and a construction loan is not intended to fund an entire project, construction loans are fairly risky, and, as a result, have high interest rates.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

construction loan

A short-term mortgage taken to finance the construction of a real estate project before permanent long-term financing is obtained. Because of its relatively high return, some real estate investment trusts specialize in this type of loan. Construction loans are often more risky than long-term mortgages.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

construction loan

A loan originated for the purposes of providing payment for construction work or subdivision development.See also building loan agreement.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
There are different construction loan options that businesses operating in the industry can use to expand their business or address any other financial challenges they face.
A construction watcher said that construction loans not closing on time "is very common." But in this case, some demolition work had started on the project before the major portion of the construction loan was finalized.
Frances Mansour-Bergin, vice president and construction loan administration manager at CenterState Bank, said, "We were in need of a modern and mobile approach to improve efficiency and consistency, while simultaneously improving the borrower experience and reducing risk with real-time reporting.
A construction loan can be granted to fund all or part of the soft and hard costs required to build and otherwise develop a new project.
Trinity Street Capital Partners (TSCP) has announced of a USD 28.5 million high leverage, non-recourse construction loan for the development of a 222-key AC Marriott hotel in Atlanta, Georgia, the company said.
Brad Domenico and Kathy Anderson of Progress Capital negotiated the construction loan for YYY 62nd Street LLC, a joint venture between Joy Construction and Maddd Equities, to construct and fit out the new seven-story office building.
The Reserve Bank today published revised rules that exempt construction loans from the Loan-to-Value Ratio (LVR) 'speed limit' introduced last October.
"Where a standard mortgage loan has essentially three parties, the member, the credit union and the Realtor representing the seller, a custom construction loan can have the member, the credit union, the construction company, and one or more construction appraisal firms or individuals involved," Olson said.
Non-traditional construction lenders such as life insurance companies, specialty finance companies and real estate investment trusts (REITs) are funding new construction projects through the use of third-party construction loan administrators.
The board of directors of the Tourism Development Fund (TDF) and the Government Development Bank (GDB) approved the financing of a US$120 million construction loan for the 150-room Bahia Beach St.
They got a construction loan from a bank to build 46 single-family homes at an average price of $287,500.

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