Overview
How Do Home Construction Loans Work?
What exactly is a construction loan? A construction loan provides the funding needed to build a home. Funds borrowed are typically released in a series of advances (or called “draws”) to pay for expenses as the home is being constructed. With a one time close loan, a construction loan automatically converts into a long-term mortgage loan (in other words, “construction-to-permanent” This process is also called the Modification Process.
*Depending on specific loan characteristics.