What are draws?
We have a simple draw process that is designed to meet the needs of your builder, and you. In general, a draw is simply the process of withdrawing funds from your loan and using them as payment for the various stages of construction. During the first 12 months, your builder will make draws as work is completed. Your down payment funds will be used first in the draw process.These funds will not be released until we have completed an inspection to verifiy that the work has been completed. The inspector is typically the appraiser that has been assigned to your project. Cinfed will maintain the percentage drawn from the construction loan and match the percentage of work that is complete. Keeping this in balance protects all parties involved.
The builder will request draws as work is completed. The only time a member will need to request a draw, is if there is work outside of the builder’s contract/scope of work. Work outside of the builder’s contract/scope will need to be addressed before your loan closing. An affidavit will be signed by the builder and homeowner (provided by Cinfed). Each draw will have a Fee of up to $100. Any draw fees not used can be reimbursed after the final draw is made. A title update will be completed for each draw to verify a clear title is being maintained. Builders can find additional information and required documents for draw requests, here. Members that will have work completed by someone other than the builder can find more information here.
We do not offer to escrow for taxes and insurance on construction loans. The reason for this is we will not have a fully assessed tax bill yet, and your insurance policy is likely to change after your home is completed. We are happy to set up an escrow account at a later date when we have a fully assessed tax bill. In the mean time, taxes and insurance will need to be paid by you when they are due.