A development loan is a short-term funding option, usually for between 6-24 months. It is designed specifically to assist with the purchase costs and build costs associated with a residential or commercial development project. An acquisition and development mortgage funds the installation or construction of necessary improvements in a parcel of land. This is so that the raw land can be converted into a developed parcel. As the loan’s name suggests, this loan is used for three purposes:
The purchase of the land
Funding required for rezoning, improvements and development.
Building the final product