Interim loans are used to bridge the gap between the initial construction and the first advances available under the terms of the construction mortgage. Interim loans can also be used for financing between phases of construction, until the construction is completed to a stage where by the mortgagee lender will advance funds to pay for the phase of the construction.
Usually, when the mortgage is advanced, the proceeds of the mortgage are used to return the bridge or interim financing.
Bridge or interim financing is also used when a sale closes after a purchaser takes possession on a purchase.