Definition: Financing used to prepare land for development, such as installing roads, utilities, drainage, or other site improvements.
Example
A developer borrows to install streets and utility lines in an approved subdivision.
Keep the distinction clear
A land-development loan is distinct from a loan used only to buy raw land or to construct a completed building, although one financing arrangement may cover multiple stages.
Related terms
Subdivision Plat Map ยท Takeout Commitment
Keep studying
References: OCC: commercial real estate lending
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