There are two main types of home construction
loans:
- Construction-to-permanent: You borrow to pay for construction. When you move in, the lender
converts the loan balance into a permanent mortgage. It’s two loans in one.
- Stand-alone construction: Your first loan pays for construction. When it’s time to move in,
you get a mortgage to pay off the construction debt. It’s two separate loans
- Fixed and Flip: You obtain a loan to purchase and rehab the property. Once the property is finished you sell it and pay off the
loan.