The Construction Loan Process
Disbursement
A construction loan differs from a loan on an existing home; funds are disbursed during the various stages of the construction process. These payments are called draws or disbursements and are directly related to the amount of work that has been completed on the project.
Example: Your construction budget is $200,000 and the project is 10% complete, you will be eligible for a disbursement of $20,000 for that portion of the project. As the project progresses, you will be eligible for additional disbursements.
The benefit of a disbursement loan is so you can ensure that your funds are directly aligned with the progress of the construction.
Your Construction-to-Permanent Loan is a reimbursement loan.
