How Construction Draws Work

Comprehensive guide to the construction loan draw process from the owner-builder perspective.

What is a Draw?

A construction draw (also called a draw request or progress payment) is how you access funds from your construction loan. Instead of receiving the full loan amount upfront, the bank releases funds in stages as work is completed.

The Draw Process

1. **Complete a construction phase** — Finish the work covered by this draw
2. **Pass inspection** — Your bank or their inspector verifies the work
3. **Prepare documentation** — Budget update, lien waivers, photos, AIA forms
4. **Submit draw request** — Send your packet to the bank
5. **Bank review** — The bank reviews and approves (5-10 business days)
6. **Funds released** — Money is deposited to your account or paid directly to subs

Typical Draw Schedule

Most construction loans have 4-6 draws aligned with major milestones:
- Foundation complete
- Framing complete
- MEP rough-in and drywall complete
- Interior finishes
- Final completion

> TIP: Don't wait until you're out of money to submit a draw. Start preparing your draw packet as soon as the work is complete and inspection is passed.