Virginia § 6.2-880 - Construction loans
Full text of Virginia Code of Virginia § 6.2-880 — Construction loans, with citation guidance and answers to common questions.
§ 6.2-880. Construction loans
A. As used in this section, "construction loan" means a loan (i) made to finance the construction of a building or otherwise to improve real estate and (ii) with a maturity not exceeding 60 months.
B. A construction loan that is accompanied by a valid and binding agreement to advance an amount equal to or greater than the construction loan upon the completion of the building or improvement, which agreement is entered into by an individual or entity acceptable to the bank or the bank itself, whether or not secured by a mortgage or similar lien on the real estate upon which the building or improvement is being constructed, shall not be considered as a loan secured by real estate within the meaning of § 6.2-878, but shall be classed as an ordinary commercial loan, unless the terms of the transaction shall be more favorable than in the absence of a lien, in which case an appraisal shall be required as provided under § 6.2-878.
C. No bank shall invest in, or be liable in, construction loans in an aggregate amount in excess of 100 percent of its capital and surplus, except that any such loans supported by an executed agreement for permanent financing shall not be included in such aggregate amount.
D. Loans to finance construction of buildings or otherwise to improve real estate 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 § 6.2-879 shall not be treated as construction loans for purposes of the limitations of this section.
Code 1950, § 6-78; 1952, c. 25; 1956, c. 622; 1960, c. 23; 1964, c. 150; 1966, c. 584, § 6.1-64; 1970, c. 14; 1972, c. 189; 1981, c. 271; 1991, c. 160; 1995, c. 87; 2006, c. 273; 2010, c. 794.
Frequently Asked Questions About Virginia § 6.2-880
What does Code of Virginia § 6.2-880 cover?
Section 6.2-880 ("Construction loans") is part of the Code of Virginia, the codified statutory law of Virginia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Virginia § 6.2-880?
A common citation format is "Code of Virginia § 6.2-880" (Virginia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Virginia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Virginia official source linked on this page or consult a licensed Virginia attorney.
How does Virginia § 6.2-880 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Virginia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Virginia.