How do construction draws work?

You complete a stage of work, request a draw, an inspector confirms progress, and the lender releases funds for that stage. Planning your cash flow around draw timing is one of the most important parts of a build.

Do I need to be an experienced builder?

Experience improves your terms, but newer builders can qualify, often with more equity, a strong general contractor, or a smaller first project.

Vertical Construction Loans

How it works

The lender approves a total loan based on the budget and expected value when complete. Money is released in draws after each construction stage is inspected. You pay interest on what's been drawn, then repay the loan when the property sells or refinances.

Who it's best for

Builders going vertical on spec or presold homes
Phased subdivision builds
Small multifamily and build-to-rent projects

What lenders look at

Construction budget and contractor
After-repair or as-completed value
Builder experience
Sale or refinance plan