What are construction loans primarily used for in relation to manufactured homes?

Construction loans are primarily used to cover costs during the construction phase of a manufactured home. This type of loan is structured to provide the financing needed to pay for materials, labor, permits, and other expenses directly associated with building the home.

These loans are typically short-term and are disbursed in stages, known as draws, as construction progresses. Once the home is completed, the construction loan is often converted into a permanent mortgage, or it can be paid off using other financing options. This financing approach is crucial because it facilitates the construction process, ensuring that builders and contractors are compensated timely, which helps maintain the schedule and quality of construction.

In contrast, other options like financing property taxes or long-term home financing do not directly relate to the fundamental purpose of construction loans. Additionally, while covering land acquisition can be part of the overall financing strategy, it is not the primary focus of construction loans. Therefore, the answer that correctly identifies the main purpose of construction loans in relation to manufactured homes is the option regarding covering costs during construction.