Question
What are the primary differences in risk between a construction loan and a permanent loan from the lenders perspective? Group of answer choices
What are the primary differences in risk between a construction loan and a permanent loan from the lenders perspective?\ \ Group of answer choices\ \ Both construction loans and permanent loans carry equal risk because they are both used in the real estate development process.\ \ Construction loans carry more risk because they are associated with the development phase, which has many uncertainties, whereas permanent loans are less risky as they are based on the continuing income stream of a completed and operational property.\ \ Permanent loans carry more risk because they are long-term and have fixed rates, while construction loans are less risky because they are short-term and have adjustable rates.\ \ Construction loans carry less risk because they are short-term and have adjustable rates, while permanent loans are riskier because they are long-term and have fixed rates.
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