REAL ESTATE GLOSSARY
Construction Loan
Construction Financing
Financing disbursed to fund development or major construction, often through draws.
What does Construction Loan mean?
Financing disbursed to fund development or major construction, often through draws. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Construction Loan in context
A lender releases funds after inspecting completed phases of a warehouse project.
Why it matters in financing
Construction Loan can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related real estate terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.