Finance
A buyer in Salem obtains a construction-to-permanent loan. This type of loan:
ARequires a separate permanent mortgage after construction is complete
BFunds construction during the build phase and automatically converts to a permanent mortgage at completion✓ Correct
CIs only available for commercial construction projects
DRequires the buyer to own the land free and clear before construction begins
Explanation
A construction-to-permanent loan (also called a one-close or single-close construction loan) funds the construction of a new home, then automatically converts to a permanent mortgage when construction is complete. This saves the borrower from closing twice and paying two sets of closing costs.
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