Example Bank Draw Schedule for Home Construction Loan

In talking about construction loans, I mentioned the existence of a “draw schedule” that specifies how much money your builder can request at each stage of the build process. While there may be slight variations from bank to bank, I though an example would be useful.

What follows is the draw schedule that our bank/builder is using:

  • Water Meter/Permits/Well — 1%
  • Building Site Cleared — 2%
  • Footings — 1%
  • Septic/Sewer Tap — 2%
  • Foundation (Crawl or Basement) — 6%
  • Floor Framing or Slab — 7%
  • Wall Framing & Sheathing — 9%
  • Roof Framing & Sheathing — 9%
  • Cornice & Facia — 2%
  • Finish Roof — 2%
  • Plumbing
    • Rough — 4%
    • Tubs — 1%
    • Fixtures/Finished — 1%
  • Electric
    • Rough — 2%
    • Finished — 1%
    • Fixtures — 1%
  • HVAC
    • Rough — 1%
    • Furnace Set — 2%
    • Compressor — 2%
  • Exterior Windows & Doors — 4%
  • Exterior Veneer — 7%
  • Insulation
    • Walls — 1%
    • Ceilings — 1%
  • Sheetrock — 5%
  • Interior Trims, Doors, Paneling — 5%
  • Cabinets/Vanities — 4%
  • Tiles — 1%
  • Interior Paint & Wallpaper — 2%
  • Fireplace — 1%
  • Exterior Paint & Shutters — 2%
  • Driveway & Walks — 2%
  • Stoops & Decks — 2%
  • Finished Lot Grade — 1%
  • Landscape — 1%
  • Appliances — 1%
  • Finished Floors — 2%
  • Gutters & Downspouts — 1%
  • Final Inspection — 1%

As the various stages are completed (and signed off on by the bank), those percentages of the contracted build price are due to the builder. At the same time, the bank makes available a portion of your construction loan.

In our case, requests are made on a Wednesday, inspected by the bank on Thursday, and due to the builder on Friday. Note that you (and the bank) should be looking for completion of these stages before making payment. It’s not enough for materials to have just been delivered.

This should go without saying, but never pay for work that hasn’t been done.

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