Construction Draw Schedule

What is A Construction Draw Schedule?

A construction draw schedule is a detailed payment plan for a construction project. It outlines when the lender will release funds to the borrower, also known as draws, during the building process. Hence, a construction draw schedule can be viewed as an agreement between the lender and the borrower.

A common draw schedule for a residential construction project might include draws at lockup, drywall, and final inspection. However, construction draws can be structured differently depending on the specific project and the agreement between the borrower and the lender.

Construction Draw Stages

Lockup

The lockup construction draw is typically made when the exterior of the house is complete, including the roof, windows, and doors.

This stage is sometimes referred to as "lockup" because the house can be secured from the outside, protecting it from weather, theft, and vandalism.

The lockup draw might represent 30% to 40% of the total project cost, depending on the specifics of the project.

This draw helps to ensure that the borrower has the funds needed to complete the exterior work and can move on to the interior work

Drywall

The drywall construction draw is typically made when the drywall is complete and ready for painting and finishing.

This stage might represent 20% to 30% of the total project cost, depending on the specifics of the project.

The drywall draw helps to ensure that the borrower has the funds needed to complete the finishing work, such as painting, trim, and flooring.

Final Inspection

The final inspection draw is typically made when the construction work is complete and has been approved by the city or town.

This stage might represent the remaining balance of the total project cost.

The final inspection draw helps to ensure that the contractor has completed all the work to the owner's satisfaction and that the project meets all applicable building codes and regulations.

Overall

The lockup, drywall, and final inspection draws help to break up the payment schedule into manageable stages, providing the borrower with a reliable source of funding throughout the construction process.