---
title: "What Is Construction loan? Building Glossary | Halo Homes"
description: "A construction loan is a short-term loan that pays for building a home, with funds released in stages as work progresses."
url: https://build813.multisites.ai/glossary/construction-loan
publisher: Halo Homes
phone: +1-813-956-1972
quote: https://build813.multisites.ai/contact
---

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# Construction loan

A construction loan is a short-term loan that pays for building a home, with funds released in stages as work progresses.

A construction loan pays for the build itself. It differs from a regular mortgage, which buys a finished house. The lender releases money in steps as the work moves forward.

The Consumer Financial Protection Bureau says construction loans have higher interest rates than longer-term mortgages. It also says payments sometimes start six to 24 months after the loan is made. Those steps follow a [draw schedule](https://build813.multisites.ai/glossary/draw-schedule). Some loans can turn into a mortgage, as a [construction-to-permanent loan](https://build813.multisites.ai/glossary/construction-to-permanent-loan) does. See [the cost to build a custom home in Tampa](https://build813.multisites.ai/cost-to-build-custom-home-tampa) for how financing fits the budget.

[Halo Homes can helpCustom home construction](https://build813.multisites.ai/services/custom-home-construction)

## Related terms

-   [Construction-to-permanent loan](https://build813.multisites.ai/glossary/construction-to-permanent-loan)
-   [Draw schedule](https://build813.multisites.ai/glossary/draw-schedule)
-   [Fixed-price contract](https://build813.multisites.ai/glossary/fixed-price-contract)
-   [Cost-plus contract](https://build813.multisites.ai/glossary/cost-plus-contract)

## Sources

1.  [Consumer Financial Protection Bureau: What is a construction loan?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-construction-loan-en-108/)

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## Start your home.

Tell Halo about your lot, your plans and your timing. A call or a short note is enough to begin.

[Start your home](https://build813.multisites.ai/contact)

Or call [(813) 956-1972](tel:+1-813-956-1972)