What defines a construction mortgage?

A construction mortgage is specifically designed to finance the construction of new properties. This type of loan provides the necessary funds to builders or homeowners to cover the costs associated with constructing a new structure, including the purchase of materials, labor, and other expenses directly tied to the building process.

Construction mortgages often have unique features, such as disbursement schedules, where the lender releases funds in stages, corresponding to the progress of the construction. This helps ensure that the money is used appropriately and reduces the lender's risk.

The other options highlight different types of financial support, such as loans for home improvements or land purchases, which do not exclusively pertain to the construction of new properties. Similarly, loans that cover operational expenses are unrelated to the construction financing context. Therefore, a construction mortgage is distinctly characterized by its dedicated focus on financing the building of new developments, making option C the correct answer.