On a construction or rehab loan, the budget isn't paid out at closing. It's set aside and released in stages, called draws. You complete a phase of work, send a progress update (often just photos through an app), and the funds for that phase are released. Then you keep building.
Why loans use draws
Draws protect both sides. The money goes into the property as the property gains value. It also keeps the project on budget, because every draw lines up with work that's actually done.
The draw process, step by step
- Close. Your construction or rehab budget is set aside, ready to draw.
- Build. Complete a phase of the work, such as demolition, framing or mechanicals.
- Send an update. Share your progress. Often that's just photos through the app; on some projects an inspector visits.
- Get funded. We release the funds for the completed work, and you move on to the next phase.
Draws are usually reimbursements for completed work, so plan to cover the first phase before the first draw comes in.
Planning a build or a heavy rehab?
Send us your budget and timeline. We'll show you how the draws would work.
How to keep draws moving
- Start with a line-item budget. The draw schedule follows your budget, so the more detail, the easier each draw.
- Request draws by completed phase. Ask for funds once a phase is finished, not halfway through.
- Take clear photos. Wide shots of each room or area, plus close-ups of the finished work.
- Keep receipts and invoices. They support each request, and they matter if you refinance later.
- Keep your contractor in the loop. Line up their payment schedule with your draw schedule.
Draws on our loans
Our ground-up construction loans finance up to 100% of construction costs on qualifying projects, with up to 90% loan-to-cost and rates from 8.99% for qualified borrowers. Our fix and flip loans finance up to 100% of the rehab budget, released the same way.
Frequently asked questions
Does someone inspect the work before each draw?
Not always. On many projects you send progress photos through an app and the funds are released. Some projects use an in-person inspection instead.
Can I get construction funds before the work is done?
Draws are generally released for completed work, so plan to cover the first phase yourself. We'll go over the draw schedule with you before closing.
How many draws can I take?
It depends on the project and the budget. Most projects take several draws, one for each major phase of the work.