Draw Schedule Procedures
Draw Procedures as part of the Construction Loan Agreement
Construction Loan Application click here
Construction Draw Schedule
Subject to the provisions set forth herein, loan funds contemplated in this agreement shall be disbursed in accordance with the Draw Schedule and Disbursement Authorization executed at time of closing.
Lender shall not be obligated to make disbursements unless and until the following conditions are satisfied:
- There shall be no default under this agreement, the Note or Mortgage.
- Lender or its designated agent shall have received a completed request for disbursement in the form approved by Lender. Lender may, at its option, also require:
a. Proofs as to paid and unpaid construction bills for materialmen and which show full payment (except for holdback) of such bills then due and payable except those covered under the current draw requests.
b. Lien releases for all work and materials as required by the lender for funds disbursed to date except that covered by the current requests.
c. Any inspection reports or architectural certificates with respect to the stage of completion of the Improvements, and such other proof as Lender may reasonably require establishing that development or construction progress has been made and such progress is in compliance with the approved plans and specifications.
d. The current status of accounts of contractors, subcontractors, materialmen and laborers furnishing labor, materials or services in the construction of the Improvements.
e. Advice from Lender or Lender's agent that the construction of the Improvements theretofore performed is in full compliance with the approved plans and specifications.
f. If the stage of construction is such that the foundation of the Improvements has been substantially completed, and Lender has not theretofore received it, a foundation survey certified to Lender and in form and scope satisfactory to Lender. - In addition to the items noted above, at the time of the last disbursement, Lender shall also have received:
a. Approval by local authorities having jurisdiction of the construction and improvements in the form of a Certificate of Occupancy, and that the same have been completed in accordance with all applicable laws, rules, ordinances and regulations, and to the extent applicable, that final FHA or VA inspections and/or approval has been given.
b. Advice from Lender or its agents to the effect that the Improvements have been completed in accordance with the approved plans and specifications.
c. Four prints of a final survey showing the completed Improvements certified to the satisfaction of the Lender and otherwise satisfactory to Lender.
d. Final lien releases and final owner's and contractor's affidavits which may be required under state mechanics' lien law.
e. Advice from the title insurance company that a search of the public records discloses no change in the condition to the title to the Property which is unacceptable to Lender.Residential Construction Lenders
Featured Article
Construction Loan Disbursement
Home | Construction U | About Author | New Home Buyer | About Your Credit | Commercial Loans | Reading Library | Loan Calculators | Learn About Mortgages 