Construction loans are story loans.  That means that the lender has to know the story behind the planned construction before they're willing to loan you money.   Because it's a story loan, it's not going to be standardized like mortgage loans underwritten to Freddie Mac or Fannie Mae guidelines.  That said, there are some common features to a construction loan.  Construction loans typically require interest-only payments during construction and become due upon completion.  Completion for homeowners means that the house has its certificate of occupancy.

These loans typically provide periodic disbursements to the builder as each stage of the building is completed.  When construction is completed a take-out or permanent loan is used to pay off the construction loan.

Takeout Financing
A commitment to provide permanent financing upon completion of construction. The take out loan normally pays off the construction loan.

Permanent Loan or Mortgage
A mortgage for a long period of time. Often referred to as the mortgage that pays off a construction loan on a completed property.

At Albany Funding we can choose from our portfolio of very competitive construction lenders based on your specific needs. Contact us today to find out more on how we can help with your construction loan.