What Are the Different Real Estate Construction Loans Available?

Real Estate and Construction
Real estate construction projects involve huge expenses, and most of these require construction loans. Many people find it practical not to put their savings in the line and consider it better to obtain loans from a lender or lending institution for the completion of the real estate properties. With construction loans, properties can be built within specific timelines and the entire expense can be kept water-tight. There are construction loans available for funding commercial as well as residential construction. Lending institutions have designed different kinds of loans keeping the requirements of borrowers in consideration. In the industry, Construction loans can be categorized broadly into two types.
Commercial Construction Loans
These can be utilized for the construction of office buildings, shopping malls and restaurants and any commercial property which can be used for any commercial purpose. Such loans can be utilized for the buying a new real estate property, expanding a structure that is already existing, renovating a building which exists already, constructing a structure from scratch and more. These loans are offered by lending institutions such as U.S. Small Business Administration (SBA), credit unions and commercial banks. Acquisition and Development Loan, Mini-Perm Loan, Bridge Loan, Take-out Loan, Construction Interim Loan, Joint Venture Loan and Real Estate Purchase Loan are some of the most popular commercial construction loans which are available today.
Residential Construction Loans
These are used for erecting residential buildings or properties. Such kinds of loans are usually categorized into two types – Construction-Only Loan and Construction-to-Permanent Mortgage Loan. Construction-Only Loan is offered just for a maximum time of one year, and is offered in the form of installments. The interest on every successive installment is more compared to the interest amount accumulated on the installment before. When the construction period ends, a mortgage is taken by the homeowner or builder on the home to get the construction loan paid off.
In a Construction-to-Permanent Mortgage Loan, the construction-only loan is blended with a mortgage over the completed home. But a varied interest rate is charged at the time of construction and even when the construction is over. In this type of loan, the builder can be compelled to pay an amount as penalty in case the period of construction spans more than a year. Although only one closing expense has to be borne by the borrower, he will be compelled to get the construction loan money and borrow the mortgage amount from that lender itself.

What are the Eco-Friendly Materials Used for Home Construction?

Eco Friendly Materials for ConstructionThese days, usage of eco-friendly construction materials has become more popular with contractors as well as homeowners, just as it is with environmentalists. These are the right choice for people who believe in sustainable living and also help improve the health of the planet. When used in new construction projects, this help prevents the depletion of the resources of the planet and minimize climate changes related to real estate construction. In case you are building a new home, it is better that you use the following eco-friendly materials in the construction of your house.
Hemp and Flax
Such kinds of materials act like natural substitutes for multi-foils, mineral wool, fiberglass and other costly insulation materials. Hemp and flax are fibers from natural plants and these are used in the form of rolls and batts in the real estate building industry. Such kinds of plant fibers consist of borates with fire-retardant, pest-destroying and fungi-killing capabilities. Starch is added for binding these together. The environmental-friendliness of such materials depends on their low physical energy.
Since times as long ago as 5,000 years back, this type of material has been in use for construction purposes. There is evidence which shows that it had been used for its water resistance, resilience, and durability. Lime, as compared to modern coatings, is present as calcium carbonate. Instead of trapping moisture, it is able to release moisture from its surface. Today, lime is used by construction engineers as one of the most environmental-friendly materials for creating green homes.
Mud or Cob
Cob homes and Mud homes have been popular for a long time. A lot of these homes are situated in Asia as well as some areas of Europe and Africa. Straw, clay-based soil and water are used in cob and combined together until a specific thickness is attained. These are ladled into stone foundations. Modern real estate construction principles make use of the same principles and materials. When mud loaves are used, the thickness of a cob can become as thick as 300 – 500 mm. Rammed tires, earthbags and rubble trenches can be used in the form of low-cost foundations.
These are only a few of the eco-friendly materials that you may use for your new home construction. You may discuss other such materials with your local real estate agent who can help you with the latest info about green real estate and construction.
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