Finance
A construction loan is a type of:
ALong-term permanent mortgage
BShort-term interim financing used to fund construction, replaced by a permanent mortgage upon completion✓ Correct
CGovernment-insured renovation loan
DSecond mortgage secured by equity in an existing home
Explanation
A construction loan provides short-term funding (draws) during construction. Once construction is complete, the borrower obtains permanent financing (takes out) to pay off the construction loan.
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