Construction Funds Disbursement Procedures

Silverado Funding will release construction funds based on the Construction Budget which must be approved during the Construction Loan Process. The Construction Budget amount will be final upon close of the loan. Please be sure your budget numbers are accurate as any change to the total after closing would require a Note Modification and a new approval process.

Funds Released At Closing:

The first disbursement will typically be released through escrow at loan closing. This usually includes loan fees, escrow and title costs and may include soft costs such as permits and plans and/or lot acquisition cost if approved and included in loan proceeds. These funds may be paid directly to Vendors/Contractors/Payees or the Borrower depending on the type and timing of payment. Supporting documentation (invoices, receipts, etc.) may be required for payment.

Construction Draws:

The remaining construction funds will be released in a series of draws on a monthly basis. Draw requests must be submitted by the 25th of the month for disbursement on the 10th of the following month. Draw requests are submitted on the “Construction Budget and Draw Request Form” and must be accompanied by invoices or receipts for all funds. The form must be signed and dated by the Borrower. A list of Vendor/Payees will also be required with Name, Address and Contact Information (Contact Person, Phone Number, Email Address).

After submission of the Draw Request, an inspection will be ordered. Upon approval of inspection and verification of all required documentation, instructions will be submitted to escrow for disbursement of funds. Funds will be disbursed directly to Vendors/Payees/Contractors through escrow or through Silverado Funding directly. Signatures will be required on appropriate Lien Waivers in order to receive payment. The Borrower may receive construction funds directly on amounts already paid only if accompanied by a Vendor’s paid receipt and Lien Waiver. NO FUNDS WILL BE DISBURSED WITHOUT PROPER DOCUMENTATION.

After the fourth draw an additional processing fee may be charged at lender’s discretion.

Interest:

After draw disbursement, interest reserves (if any) will be applied to the loan and Borrowers will be issued a statement of account. If no interest reserve was established, interest will be due and payable upon receipt of monthly statement.

Please contact us for more information on this or any type of loan program.