Can a loan using the IRS Applicable Federal Rates be structured as a construction loan?
We will be constructing an Accessory Dwelling Unit (ADU), and financing it through a family connection. We would like to be able to draw from the loan monthly as construction advances, rather than take out the entire sum of the loan up front. I know that any term loan has to conform to the IRS applicable federal rates, but I don't know if it's possible to structure the loan to take money out of the loan monthly like a typical construction loan.
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