§ 6.2-880. (Effective October 1, 2010) Construction loans.
A. As used in this section, "construction loan" means a loan (i) made tofinance the construction of a building or otherwise to improve real estateand (ii) with a maturity not exceeding 60 months.
B. A construction loan that is accompanied by a valid and binding agreementto advance an amount equal to or greater than the construction loan upon thecompletion of the building or improvement, which agreement is entered into byan individual or entity acceptable to the bank or the bank itself, whether ornot secured by a mortgage or similar lien on the real estate upon which thebuilding or improvement is being constructed, shall not be considered as aloan secured by real estate within the meaning of § 6.2-878, but shall beclassed as an ordinary commercial loan, unless the terms of the transactionshall be more favorable than in the absence of a lien, in which case anappraisal shall be required as provided under § 6.2-878.
C. No bank shall invest in, or be liable in, construction loans in anaggregate amount in excess of 100 percent of its capital and surplus, exceptthat any such loans supported by an executed agreement for permanentfinancing shall not be included in such aggregate amount.
D. Loans to finance construction of buildings or otherwise to improve realestate may be made under this section or under the provisions of § 6.2-878.
E. Loans made under subsection H of § 6.2-878 or subsection A of § 6.2-879shall not be treated as construction loans for purposes of the limitations ofthis section.
(Code 1950, § 6-79.2; 1962, c. 267; 1966, c. 584, § 6.1-64; 1970, c. 13;1976, c. 94; 1980, c. 714; 1991, c. 160; 1994, c. 501; 2005, c. 263; 2010, c.794.)
§ 6.2-880. (Effective October 1, 2010) Construction loans.
A. As used in this section, "construction loan" means a loan (i) made tofinance the construction of a building or otherwise to improve real estateand (ii) with a maturity not exceeding 60 months.
B. A construction loan that is accompanied by a valid and binding agreementto advance an amount equal to or greater than the construction loan upon thecompletion of the building or improvement, which agreement is entered into byan individual or entity acceptable to the bank or the bank itself, whether ornot secured by a mortgage or similar lien on the real estate upon which thebuilding or improvement is being constructed, shall not be considered as aloan secured by real estate within the meaning of § 6.2-878, but shall beclassed as an ordinary commercial loan, unless the terms of the transactionshall be more favorable than in the absence of a lien, in which case anappraisal shall be required as provided under § 6.2-878.
C. No bank shall invest in, or be liable in, construction loans in anaggregate amount in excess of 100 percent of its capital and surplus, exceptthat any such loans supported by an executed agreement for permanentfinancing shall not be included in such aggregate amount.
D. Loans to finance construction of buildings or otherwise to improve realestate may be made under this section or under the provisions of § 6.2-878.
E. Loans made under subsection H of § 6.2-878 or subsection A of § 6.2-879shall not be treated as construction loans for purposes of the limitations ofthis section.
(Code 1950, § 6-79.2; 1962, c. 267; 1966, c. 584, § 6.1-64; 1970, c. 13;1976, c. 94; 1980, c. 714; 1991, c. 160; 1994, c. 501; 2005, c. 263; 2010, c.794.)
§ 6.2-880. (Effective October 1, 2010) Construction loans.
A. As used in this section, "construction loan" means a loan (i) made tofinance the construction of a building or otherwise to improve real estateand (ii) with a maturity not exceeding 60 months.
B. A construction loan that is accompanied by a valid and binding agreementto advance an amount equal to or greater than the construction loan upon thecompletion of the building or improvement, which agreement is entered into byan individual or entity acceptable to the bank or the bank itself, whether ornot secured by a mortgage or similar lien on the real estate upon which thebuilding or improvement is being constructed, shall not be considered as aloan secured by real estate within the meaning of § 6.2-878, but shall beclassed as an ordinary commercial loan, unless the terms of the transactionshall be more favorable than in the absence of a lien, in which case anappraisal shall be required as provided under § 6.2-878.
C. No bank shall invest in, or be liable in, construction loans in anaggregate amount in excess of 100 percent of its capital and surplus, exceptthat any such loans supported by an executed agreement for permanentfinancing shall not be included in such aggregate amount.
D. Loans to finance construction of buildings or otherwise to improve realestate may be made under this section or under the provisions of § 6.2-878.
E. Loans made under subsection H of § 6.2-878 or subsection A of § 6.2-879shall not be treated as construction loans for purposes of the limitations ofthis section.
(Code 1950, § 6-79.2; 1962, c. 267; 1966, c. 584, § 6.1-64; 1970, c. 13;1976, c. 94; 1980, c. 714; 1991, c. 160; 1994, c. 501; 2005, c. 263; 2010, c.794.)
