Loan Terms
Standard terms, extensions, and payment requirements for new construction loans.
Property Loan Terms
Standard terms and extension options
Term Type
Standard Term
Duration
12 months
Requirements
Standard approval process
Term Type
Extension Option 1
Duration
6 months
Requirements
Extension fee, good standing
Term Type
Extension Option 2
Duration
6 months
Requirements
Additional extension fee, project progress
Term Type
Maximum Term
Duration
24 months
Requirements
All extensions approved
Interest and Payment Terms
Interest rates and payment requirements
Term Type
Interest Rate
Details
Variable, based on market conditions
Notes
Adjusted monthly
Term Type
Payment Schedule
Details
Interest only, monthly
Notes
Due on the 1st of each month
Term Type
Minimum Interest
Details
3 months of interest
Notes
Required regardless of early payoff
Term Type
Prepayment Penalty
Details
None after minimum interest period
Notes
Subject to minimum interest requirement
Real-Life Scenario: Construction Delays
How loan terms accommodate project timeline changes
Scenario
A developer is building a single-family home with a 12-month estimated construction timeline. Due to material shortages and weather delays, the project falls 4 months behind schedule.
Solution
The developer applies for the first 6-month extension before the initial 12-month term expires. They pay the extension fee and provide updated construction timelines and progress reports.
Outcome
The extension is approved, giving the developer additional time to complete the project without defaulting on the loan. Monthly interest payments continue during the extension period.