Finance
A Minnesota construction loan is different from a permanent mortgage in that:
AConstruction loans have fixed 30-year terms
BConstruction loans provide funds in draws as construction progresses and convert to a permanent mortgage upon completion✓ Correct
CConstruction loans require no down payment
DConstruction loans are only available to licensed contractors
Explanation
A construction loan provides short-term financing during the building phase. Funds are disbursed in draws as construction milestones are completed. Upon completion, the construction loan is converted to or replaced by a permanent (long-term) mortgage. Interest rates on construction loans are typically higher than permanent mortgages.
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