This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
In Philadelphia and Chicago, which are more nearly equal to New York, the method of financing building operations has more nearly approached French methods. In Chicago, several concerns have financed the building of fine apartment houses and business buildings, upon which they loaned from 50 to 60 per cent of the value. They have issued against these mortgages bonds due in from one to fifteen years with varying rates of interest, from 5 to 6 per cent. These bonds are sold to individual lenders in any amount from $100 upward.
In Philadelphia, two or three trust companies lend most of the money and in the form of permanent mortgages, from three to ten years, making the first advance when construction is started, and thereafter, as it proceeds toward completion, when the loan remains as permanent for varying periods. This latter form of mortgage is also common now in New York, and is what we call a building permanent loan or a permanent loan in building payments.