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Recent Construction Loan News
- Altman breaks ground on apartments along linear park in Miami-Dade
Obtaining a construction loan for this project was more challenging than usual because of the Covid-19 pandemic, but it appears there's still plenty of demand for apartments in Miami-Dade County.
Brian Bandell. American City Business Journals. Wednesday, 10 Jun 2020 10:55:08 +0000. - Mixed-used apartment project headed to Shepherd Drive
Los Angeles-based Parkview Financial provided a $38 million construction loan to Hunington Properties for development of the project at Shepherd Drive and Center Street.
Katherine Feser. Houston Chronicle. Thursday, 20 Feb 2020 15:30:00 UTC.
Residential Construction Loans
In the residential real estate market, there are two ways to finance construction: 1) via two loans, an initial construction loan that covers the construction period and a follow-on permanent loan that is used to pay off the construction loan; or 2) via a construction-to-permanent loan where the construction loan is converted to a mortgage after the certificate of occupancy is issued. |
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A construction worker reviews plans outside of a residential construction
site. Unfinished homes receive finishing touches before new
residents move in. Soon this site will be full of grass, trees, and
warmly lit windows as neighbors move in and call this new neighborhood
home. The noise of construction will be replaced with the sounds
of nature and children playing.
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In both cases, the construction of the home is financed by the construction loan, which the lenders pay out in stages as the builder needs funds. The lender must, therefore, monitor the builder's progress, which is one reason why fees on construction loans are higher than on conventional loans. During the construction period, you'll typically have to pay interest-only payments based on a variable rate.
For home buyers that are planning to sell their current home once their new home is built, a bridge loan may be a good option. In residential real estate, bridge loans are used to span the time between when buyers buy a new home and when they can sell their old home. When paired with a construction loan, the bridge loan can be used as a down payment. To find rates on construction loans and bridge loans, check out hsh.com. For more information about construction loans and answers to frequently asked questions about these loans, visit the Mortgage Professor.
Commercial Construction Loans
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Concrete, metal, and wood rise several stories into the sky, as an
unfinished commercial building is constructed. A yellow crane
perches atop the construction site. Day by day, the construction
site is transformed. Soon the construction site will be
replaced by a completed building.
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Related Real Estate and Finance Sites
- Construction News - headlines, summaries, and article references.
- Home Mortgage Loans - first mortgages and home refinancing.
- Home Improvement Loans - financing a home remodeling project.
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