Education
How Construction Draw Schedules Work
Construction loans fund in stages. A draw schedule defines those stages, the documentation required at each one, and how the lender verifies completed work before releasing funds.
The Draw Request Cycle
- GC submits invoices and a percent-complete summary to the borrower.
- Borrower assembles the draw request with lien waivers and updated budget.
- Lender orders an inspection of completed work.
- Inspector confirms percent complete matches the request.
- Lender disburses funds — usually within several business days.
Typical Phase Breakdown
1. Site Work & Foundation
Grading, utilities, footings, slab or stem wall. Often the first major draw after closing.
2. Framing
Rough framing, roof structure, sheathing. Inspected once the structure is dried-in.
3. Mechanicals (Rough)
Plumbing, electrical, and HVAC rough-ins, typically with a city inspection sign-off before drywall.
4. Insulation & Drywall
Insulation, drywall hang and finish, ready for interior finishes.
5. Interior Finishes
Cabinets, flooring, paint, trim, fixtures. Often broken into 1–2 draws.
6. Exterior Finishes & Site Completion
Stucco/siding, roofing, hardscape, landscape, driveway.
7. Final Completion / Certificate of Occupancy
Punch list, final inspection, and certificate of occupancy. The final draw releases retainage.
Retainage
Most construction lenders hold back 10% retainage per draw until the project is substantially complete and a certificate of occupancy is issued. Retainage protects all parties against incomplete work and is standard across Sacramento, Roseville, and Folsom-area projects.
Best Practices
- Keep your construction budget aligned with how draws will actually be requested.
- Pre-schedule inspections — don't wait until you need cash.
- Track GC invoices, lien waivers, and change orders in one place.
- Discuss any scope or budget change with your lender before incurring the cost.
Related reading: construction loan requirements, how long construction loans take, and LTC vs LTV.
Frequently Asked Questions
How many draws does a typical construction loan have?+
Most Sacramento-area construction loans use 5 to 8 draws tied to identifiable phases of work. Larger or more complex projects may use more frequent draws to keep cash flow aligned with the contractor's billing.
How long does each draw take to fund?+
After a draw request is submitted with supporting documentation and the inspection clears, funding typically takes 3–7 business days. Clean documentation and pre-scheduled inspections are the biggest accelerants.
Who pays for the inspections?+
Inspection fees are a soft cost paid by the borrower, usually deducted from each draw. They're modest relative to total project cost and standard across construction lenders.
Can I get an initial draw at closing for work already completed?+
Often yes. If site work, foundation, or other early-phase work was completed before loan closing — and is properly documented and invoiced — many lenders will reimburse it as part of the initial draw.
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