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Posted On: 04/21/2023 9:59:27 PM
Post# of 13785
Re: ThreeEmInEn #4384
A finalized construction loan process.
https://rabbet.com/blog/what-is-a-construction-loan/
Quote:
How are funds dispersed on a construction loan?
The disbursement of funds during construction – the construction loan is disbursed over the course of the project, reimbursing the costs of every milestone. The funds are released per the details in the Schedule of Values and the Draw Schedule.
https://rabbet.com/blog/what-is-a-construction-loan/
Quote:
1) Draw request processing and approval – the borrower’s draw request needs to undergo rigorous scrutiny to provide proof of milestone completion per the loan terms and construction plan, within the selected timeframe and budget. When the lender approves the draw request, the project can move into the next stage.
2) The disbursement of funds during construction – the construction loan is disbursed over the course of the project, reimbursing the costs of every milestone. The funds are released per the details in the Schedule of Values and the Draw Schedule. The bank will, upon receiving the necessary reports, send out a 3rd-party inspector with the task of confirming that this particular part of the project is complete. The inspector will then provide a construction inspection report with recommendations that the draw request is funded or revised based on the progress of the project.
3) Servicing or the act of collecting interest on the loan
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