This refers to a momentary loan produced by the lender for the sole aim of new property construction. How it works is that the principal amount required for incurred project costs are acquired monthly through a loan draw request, and the loan interest accures or accumulates and is then added to the loan principal balance.
Accrual Construction Loan/Negative Amortization Loan
This refers to a momentary loan produced by the lender for the sole aim of new property construction. How it works is that the principal amount required for incurred project costs are acquired monthly through a loan draw request, and the loan interest accures or accumulates and is then added to the loan principal balance.
