Finance
A construction loan for a new home typically:
AFunctions as a permanent mortgage from day one
BIs a short-term loan with draws paid to the builder as construction progresses, converting to a permanent mortgage at completion✓ Correct
CRequires no down payment
DIs only available through the FHA
Explanation
A construction loan provides short-term financing during the building process, with funds disbursed in stages (draws) as construction milestones are met. Upon completion, it is typically converted to or replaced by a permanent (take-out) mortgage.
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