when are funds dispersed on a construction loan
Construction loan Funds are taken from the loan through a process referred to as a "draw". A draw is the method by which funds are taken from the construction budget to pay material suppliers and contractors. Each lender has different requirements for processing a draw. For example, some allow the borrower to request draws online, while others require paperwork and periodic inspections. This process helps ensure that the loan proceeds are actually used for the construction and that the construction process is moving smoothly. The borrower is only charged interest on the amount borrowed at any one point.