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What are
soft costs?
Soft costs
are indirect or "off-site" costs not directly related to
labor or materials for construction.
Examples of soft costs include building permits and
architectural fees. Soft costs are disbursed monthly on an "as needed"
basis, with invoices, receipts, cancelled checks or other evidence
of payment. However,
soft costs such as builder overhead/supervision are disbursed in
proportion to the percentage of completion of the home.
What are
deposits?
Vendors for
items like cabinets, light fixtures, windows, appliances or any
other specialty improvement that requires custom craftsmanship
usually require deposits. We
will release up to 50% of the total amount budgeted in the specific
line item for the following deposits:
·
Window
/doors
·
Cabinets/appliances
·
Flooring
·
Custom
Lighting
How does
the disbursement process work?
Disbursements
on a construction loan are designed to reimburse the borrower as the
construction of the home progresses.
We will disburse construction proceeds based on the amount of
work that has been completed on the project.
For example, if the construction budget is $100,000 and the
project is 10% complete (based on the inspector's view), Home
Construction Lending will disburse the borrower up to $10,000 on the
project. This
disbursement would be in addition to any advances or deposits the
borrower may be entitled to receive.
Disbursements for soft or direct cost expenses must be
verified by an inspection.
Is there
a set schedule for requesting draws?
There is no
set schedule, but we require that no more than one draw per month be
submitted.
How does
the borrower request a draw?
To
conveniently request a draw online, the borrower can go to our web
site "My Loan Information".
The borrower also may e-mail, fax or mail Draw Requests to
us. (The borrower does
not need to send the original Draw Request with a fax or e-mail.)
How will
borrowers know if their draw request has been approved?
When
we receive the borrower's Draw Request in the Disbursement Unit, we
immediately order an inspection to verify the status of construction
on the borrower's home. The
inspection is performed within 3 to 5 business days from the time we
receive the Draw Request. When
the inspector verifies the percentage of completion and we receive
verification from the title company that the property is free of
mechanics liens, the Draw Request will be funded.
A CTP Customer Service Representative will call the borrower
to discuss the inspection results, the amount of the Draw Request
and the date the borrower can expect the funds to be wired to his or
her account. We advise that the borrower verify his or her bank's
receipt of funds prior to issuing checks.
Please note that the borrower’s funds may not be available
until the next business day. The
borrower can also access the status of his or her draw request 24
hours, 7 days a week by visiting our web site “My Loan Information”.
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