Finance
A construction loan is typically characterized as:
AA 30-year fixed mortgage used for new home construction
BA short-term loan that funds construction costs, converted to permanent financing upon completion✓ Correct
CA government-insured loan for modular homes
DA line of credit for commercial land development only
Explanation
Construction loans are short-term loans (typically 12-18 months) that fund the building of a property. Funds are drawn in stages as construction progresses. Upon completion, the loan is either paid off or converted to permanent long-term financing through a 'construction-to-permanent' loan.
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