The Draw Process
A draw is simply the process of withdrawing funds from your loan and using them as payment for the various stages of the renovation. We will consider a start up draw of 10% of the project cost on a case by case basis. After the initial startup draw, remaining funds will only be released if the work has been verified as complete through our inspection of the property (typically completed by the appraiser that has been assigned to your project). This will help ensure that the percentage drawn from the renovation funds match the percentage of work that is complete. To protect all parties involved, draws for materials only will need to be accompanied by receipts, but will be subject to other verification documents as warranted.
A draw schedule (plans for draw request) will be required on all rehab holdings over $30,000. Minimum draw amounts, except the Start Up Draw and Final Draw, will be $5000. Download a sample draw schedule, here.
Renovation loans will have 3 draw fees estimated in closing cost. Each draw will have a Fee of up to $125. Any draw fees not used can be reimbursed after the final draw is made. Depending on the scope of the project, a title update may also be done. Funds can be released in the following manner:
- In the event a contractor is being paid through the draw, a check will be issued to the contractor and member, which will need to be signed by both for deposit.
- Funds will be deposited into the member's Cinfed account.
A request for a draw should be accompanied by the following:
How should I get started?
Plans and Details
A letter/email will be required explaining the details of your project. We want very specific details about the products/supplies you are using. Any details that you think are important for us to know should be supplied in this letter. Please also include the time frame of your project. The plans and details letter can be crucial in properly evaluating your project. This will impact the underwriting and appraisal aspects of your project. Download our sample letter, here.
Preparing a Cost Sheet
Having a well thought out cost sheet is crucial to a successful project. Whether you are employing a contractor, or you are tackling the renovation on your own, it is important to have a clear understanding of the cost associated with your plans. Make sure that each item is accounted for. The appraiser and underwriter are both dependent on accurate information to be provided. Cinfed will supply you with a cost sheet that is strongly recommended for your renovation project. Download our sample cost sheet, here.