construction loan

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Construction loan

A short-term loan to finance building costs.

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.

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.

construction loan

A loan originated for the purposes of providing payment for construction work or subdivision development.See also building loan agreement.
References in periodicals archive ?
7m construction loan for Washington Plaza, a 120,000-square-foot retail center anchored by J.
Banks provide the short-term, floating-rate financing and associated construction loan administration through completion of the project, lease-up and stabilization.
The borrower nneded a short-term bridge loan as the closing of their committed construction loan was delayed.
Kite Realty Group Trust (NYSE:KRG), a real estate investment trust, has closed a USD23m construction loan for the redevelopment of its Four Corner Square property in Maple Valley, Washington (Seattle MSA), it disclosed on Thursday.
With TCL, lenders can easily, economically and effectively manage each construction loan from acquisition through development and construction, according to the company.
Related has already reportedly collected $600 million from investors through the EB-5 program, as well as a $475 million construction loan originated by Starwood Property Group which includes member organizations of the United Brotherhood of Carpenters and Joiners, along with Oxford Properties Group.
Umpqua Bank received more than USD25m in custom construction loan applications in the first half of 2010.
The agreement with Trimont equips Amalgamated with access to top talent in loan sourcing, credit underwriting and construction loan servicing, thereby enabling the bank to expand funding for the construction and rehabilitation of affordable homes for working families.

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