If a house is still under construction, only a partial disbursement of the loan is made by the lender. This is done periodically and the final disbursement is made on completion of construction. However, in some cases, the home loan company may be willing to make the entire payment even if the construction is not complete. This is known as the Advance Disbursement Facility.
An advance disbursement is generally made if the buyer requests the home loan company to do so and if the home loan company is fairly convinced the builder will complete the construction on time. No tax benefits are available in respect of repayment of a home loan in the year in which the construction of the property is not completed.