How financing is handled during a construction project.

[Patrick K.]

Hi all, 

Could someone please shed some light on how financing is handled during a construction project? I understand most traditional loan would be expected to be paid off before a major construction project? and I will need to obtain a construction loan to not only pay off the previous loan but also cover the construction cost. What is the debt ratio for a construction loan and how are they evaluated? and after construction is done, a traditional lender evaluates the finished product and lends again?

for example's sake, let's say we are looking at a project to convert two single family houses into a 6-plex 

thank you for your time