Opinion ID: 1824073
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Heading: Purchase-Related AdvancesConstruction Mortgage Lien Priority.

Text: Midland urges the purchase-related advances made to acquire the two vacant lots were a necessary part of the construction loan and mortgage. The lender asks the court to broadly construe the statutory provisions giving preference to construction mortgage liens to include the acquisition costs of the land. The statutory priority given to construction loan liens over mechanics' liens was enacted after the legislature had defined a construction mortgage for determining priority of security interest in fixtures. See 1974 Iowa Acts ch. 1249, § 53. This Uniform Commercial Code provision provided a mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates. Iowa Code § 554.9313(1)(c). Iowa Code section 572.18 clearly limits the definition of a construction mortgage lien to secure loans or advances made to finance work or improvements. We conclude the plain language of the statute does not cover advances made to finance land acquisition. If the legislature intended to include loans or advances for the cost of acquisition of the land it could have done so. Midland is not entitled to a construction mortgage lien priority for advances to acquire the real estate lots.