{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-880.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-880.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-880.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-880.html"}],"law_id":59260,"edition_id":1,"section_id":59260,"structure_id":14189,"section_number":"6.2-880","catch_line":"Construction loans","history":"Code 1950, \u00a7 6-78; 1952, c. 25; 1956, c. 622; 1960, c. 23; 1964, c. 150; 1966, c. 584, \u00a7 6.1-64; 1970, c. 14; 1972, c. 189; 1981, c. 271; 1991, c. 160; 1995, c. 87; 2006, c. 273; 2010, c. 794.","full_text":"A\n\nAs 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\n\nA 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\n\nNo 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\n\nLoans 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\n\nLoans 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.","order_by":null,"text":{"0":{"id":217204,"text":"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.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":217205,"text":"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.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":217206,"text":"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.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":217207,"text":"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.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":217208,"text":"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.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"ancestry":[{"id":14189,"edition_id":1,"name":"Investments and Loans","identifier":"9","label":"article","depth":4,"order_by":1,"parent_id":13791,"metadata":{},"date_created":"2026-06-26 03:47:11","date_modified":"2026-06-26 03:47:11","permalink":{"id":265643,"object_type":"structure","relational_id":14189,"identifier":"9","token":"6.2\/II\/8\/9","url":"\/6.2\/II\/8\/9\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13791,"edition_id":1,"name":"Banks","identifier":"8","label":"chapter","depth":3,"order_by":1,"parent_id":13000,"metadata":{},"date_created":"2026-06-26 03:45:53","date_modified":"2026-06-26 03:45:53","permalink":{"id":265065,"object_type":"structure","relational_id":13791,"identifier":"8","token":"6.2\/II\/8","url":"\/6.2\/II\/8\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13000,"edition_id":1,"name":"Depository Institutions and Trust Organizations","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:44:07","date_modified":"2026-06-26 03:44:07","permalink":{"id":263685,"object_type":"structure","relational_id":13000,"identifier":"II","token":"6.2\/II","url":"\/6.2\/II\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":63411,"structure_id":14189,"section_number":"6.2-870","catch_line":"Limitation of amount invested in bank premises","url":"\/6.2-870\/","token":"6.2\/II\/8\/9\/6.2-870","metadata":false},{"id":64130,"structure_id":14189,"section_number":"6.2-871","catch_line":"Investment in stock or securities of bank service corporations","url":"\/6.2-871\/","token":"6.2\/II\/8\/9\/6.2-871","metadata":false},{"id":61248,"structure_id":14189,"section_number":"6.2-872","catch_line":"For what purpose banks may purchase, hold, and convey real estate","url":"\/6.2-872\/","token":"6.2\/II\/8\/9\/6.2-872","metadata":false},{"id":74353,"structure_id":14189,"section_number":"6.2-873","catch_line":"Additional permissible investments in real estate","url":"\/6.2-873\/","token":"6.2\/II\/8\/9\/6.2-873","metadata":false},{"id":82541,"structure_id":14189,"section_number":"6.2-874","catch_line":"Prohibited uses of bank's own stock; other investments or loans","url":"\/6.2-874\/","token":"6.2\/II\/8\/9\/6.2-874","metadata":false},{"id":57173,"structure_id":14189,"section_number":"6.2-875","catch_line":"Limitations on obligations of borrowers","url":"\/6.2-875\/","token":"6.2\/II\/8\/9\/6.2-875","metadata":false},{"id":55367,"structure_id":14189,"section_number":"6.2-876","catch_line":"Loans to executive officers or directors","url":"\/6.2-876\/","token":"6.2\/II\/8\/9\/6.2-876","metadata":false},{"id":85468,"structure_id":14189,"section_number":"6.2-877","catch_line":"Overdrafts by bank officer or director","url":"\/6.2-877\/","token":"6.2\/II\/8\/9\/6.2-877","metadata":false},{"id":76996,"structure_id":14189,"section_number":"6.2-878","catch_line":"Loans secured by real estate generally","url":"\/6.2-878\/","token":"6.2\/II\/8\/9\/6.2-878","metadata":false},{"id":80117,"structure_id":14189,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","url":"\/6.2-879\/","token":"6.2\/II\/8\/9\/6.2-879","metadata":false},{"id":59260,"structure_id":14189,"section_number":"6.2-880","catch_line":"Construction loans","url":"\/6.2-880\/","token":"6.2\/II\/8\/9\/6.2-880","metadata":false},{"id":78478,"structure_id":14189,"section_number":"6.2-881","catch_line":"Investment in reverse annuity 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subsidiary corporations by Commission","url":"\/6.2-886\/","token":"6.2\/II\/8\/9\/6.2-886","metadata":false},{"id":73096,"structure_id":14189,"section_number":"6.2-887","catch_line":"Insurance business of controlled subsidiary","url":"\/6.2-887\/","token":"6.2\/II\/8\/9\/6.2-887","metadata":false},{"id":69740,"structure_id":14189,"section_number":"6.2-888","catch_line":"Real estate brokerage business of controlled subsidiary","url":"\/6.2-888\/","token":"6.2\/II\/8\/9\/6.2-888","metadata":false}],"previous_section":{"id":80117,"structure_id":14189,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","url":"\/6.2-879\/","token":"6.2\/II\/8\/9\/6.2-879","metadata":false},"next_section":{"id":78478,"structure_id":14189,"section_number":"6.2-881","catch_line":"Investment in reverse annuity mortgages","url":"\/6.2-881\/","token":"6.2\/II\/8\/9\/6.2-881","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-880\/","history_text":"

The record of this law\u2019s original creation isn\u2019t available online. It has been modified 12 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1952, chapter 25; in 1956, chapter 622; in 1960, chapter 23; in 1964, chapter 150; in 1966, chapter 584; in 1970, chapter 14; in 1972, chapter 189; in 1981, chapter 271; in 1991, chapter 160; in 1995, chapter 87<\/a>; in 2006, chapter 273<\/a>; in 2010, chapter 794<\/a>.<\/p>","references":[{"id":80117,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","order_by":null,"url":"\/6.2-879\/"}],"refers_to":[{"id":76996,"section_number":"6.2-878","catch_line":"Loans secured by real estate generally","order_by":null,"url":"\/6.2-878\/"},{"id":80117,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","order_by":null,"url":"\/6.2-879\/"}],"permalink":{"id":265685,"object_type":"law","relational_id":59260,"identifier":"6.2-880","token":"6.2\/II\/8\/9\/6.2-880","url":"\/6.2-880\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-880\/","token":"6.2\/II\/8\/9\/6.2-880","dublin_core":{"Title":"Construction loans","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-880","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section, “construction loan<\/span>” 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. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> A construction loan<\/span> that is accompanied by a valid and binding agreement to advance an amount equal to or greater than the construction loan<\/span> upon the completion of the building or improvement, which agreement is entered into by an individual or entity<\/span> acceptable to the bank<\/span> or the bank<\/span> itself, whether or not secured by a mortgage or similar lien<\/span> 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<\/a>, 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<\/span>, in which case an appraisal shall be required as provided under § 6.2-878<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> No bank<\/span> shall invest in, or be liable in, construction loans<\/span> 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. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> 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<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> Loans made under subsection H of § 6.2-878<\/a> or subsection A of § 6.2-879<\/a> shall not be treated as construction loans<\/span> for purposes of the limitations of this section. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCONSTRUCTION LOANS (\u00a7 6.2-880)\n\nA. As used in this section, “construction loan” means a loan (i)\nmade to finance the construction of a building or otherwise to improve real\nestate and (ii) with a maturity not exceeding 60 months.\n\nB. A construction loan that is accompanied by a valid and binding agreement to\nadvance an amount equal to or greater than the construction loan upon the\ncompletion of the building or improvement, which agreement is entered into by an\nindividual or entity acceptable to the bank or the bank itself, whether or not\nsecured by a mortgage or similar lien on the real estate upon which the building\nor improvement is being constructed, shall not be considered as a loan secured\nby real estate within the meaning of § 6.2-878, but shall be classed as an\nordinary commercial loan, unless the terms of the transaction shall be more\nfavorable than in the absence of a lien, in which case an appraisal shall be\nrequired as provided under § 6.2-878.\n\nC. No bank shall invest in, or be liable in, construction loans in an aggregate\namount in excess of 100 percent of its capital and surplus, except that any such\nloans supported by an executed agreement for permanent financing shall not be\nincluded in such aggregate amount.\n\nD. Loans to finance construction of buildings or otherwise to improve real\nestate may be made under this section or under the provisions of § 6.2-878.\n\nE. Loans made under subsection H of § 6.2-878 or subsection A of §\n6.2-879 shall not be treated as construction loans for purposes of the\nlimitations of this section.\n\nHISTORY: Code 1950, \u00a7 6-78; 1952, c. 25; 1956, c. 622; 1960, c. 23; 1964, c.\n150; 1966, c. 584, \u00a7 6.1-64; 1970, c. 14; 1972, c. 189; 1981, c. 271; 1991, c.\n160; 1995, c. 87; 2006, c. 273; 2010, c. 794.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}