Final answer:
A construction loan, often drawn in increments during home-building, is true and was prevalent during the housing bubble when many secured such loans for new home construction.
Step-by-step explanation:
A loan made to finance home-building or the improvement of land, where funds are usually disbursed in increments as construction progresses, is known as a construction loan or a draw-down loan. This statement is true. At the peak of the housing bubble, new home construction saw many individuals securing such loans to build new houses.
Unlike traditional mortgages, these loans have unique features such as monitoring the progress of the construction and disbursing funds accordingly to ensure the project moves forward as planned. As witnessed historically, especially noted around the peak of the housing bubble, local banks and other financial institutions frequently provided home loans that significantly impacted the real estate market.