Interest Reserve
Let's say the construction loan is good for 24 months but the actual construction period is only 22 months. Hypothetically it has been determined revenue will not be sufficient enough to make any payments on a loan until month 25 resulting in two additional months beyond construction completion that... Let's say the construction loan is good for 24 months but the actual construction period is only 22 months. Hypothetically it has been determined revenue will not be sufficient enough to make any payments on a loan until month 25 resulting in two additional months beyond construction completion that would need assistance from an interest reserve fund. If I wanted to account for this within the interest reserve would month 23 's interest reserve amount is based on the last construction draw (in month 22)? Does this now mean the interest reserve amount in month 24 is paying interest, not on any construction draws (since construction is complete) but instead applied interest to the interest reserve amount in month 23? Read More

Why is interest expense not added to pre-tax income?
so the reason to not include interest expense in your pre-tax income is because interest on this type of mortgage is not tax deductible?