Draw: A future distribution of funds as reimbursement for completed construction subject to lender approval.
Qualified Reimbursable Construction Expense: To qualify as a reimbursable expense, materials and/or labor must have been installed or services rendered to improve the property. All associated invoices must be fully paid, accompanied by lien release waivers. An updated construction budget, paid invoices, photos, and a lender-approved inspection may be required.
Reimbursement: For a Qualified Reimbursable Construction Expense to be considered for actual reimbursement, it must meet the following criteria, plus any additional criteria as deemed appropriate by the lender.
No significant budget changes without prior lender disclosure.
The loan must be in good standing without default
Additional Equity Contributions: A percentage of the current total construction budget, as stated in your loan approval, in addition to any initial down payment equity or closing costs, must have already been permanently contributed to the project and verified as described in the above sections before the 1st draw shall be considered; this additional equity contribution shall not be reimbursed by Lender without written Lender approval
- 1st Draw: Reimbursement amount shall be calculated as total “Qualified Reimbursable Construction Expenses” less (-) “Additional Borrower Equity Contribution” retained in the project
Remaining Draws: Reimbursement amount shall be calculated as total “Qualified Reimbursable Construction Expenses” less (-) “Additional Equity Contribution” retained in the project less (-) any previously funded draws
Additional Draw Criteria (Minimum Draw Request $10,000):
Minimum 1-week notice for each draw request.
$275.00 Draw Fee deducted from each draw for processing and inspection costs.