How many draws are in a construction loan?

Dollar Bank publishes six, at 10%, 15%, 20%, 20%, 20% and 15% of the total construction price. Mutual Savings and Loan Association also publishes six, weighted 20%, 20%, 20%, 15%, 20% and a final 5%. Lenders differ, so read the one in front of you rather than a general figure.

When is the first draw released?

On Dollar Bank's published schedule the first draw is 10% at foundation, covering excavation, footers, waterproofing and drains. Mutual Savings and Loan Association holds 20% for its first disbursement at the slab, and requires a slab spot survey and termite treatment, plus a flood elevation where needed, before it is paid.

Do I pay interest on the whole loan during construction?

No. Dollar Bank says no payments are due until funds are disbursed and that during construction you make interest-only payments on the amounts drawn, with the payments increasing as the total drawn increases. Once the house is complete the permanent loan begins and regular monthly payments start.

Who inspects the work before a draw?

Dollar Bank says the appraiser or a bank inspector inspects the property before any draw disbursement, to verify the work was completed based on the original plans and specifications submitted. That inspection is separate from the city or county building inspection your builder schedules.

What is a draw schedule in construction?

Published August 22, 2026

A draw schedule sets what share of a construction loan is released at each stage of the build, after an inspection confirms the work.

A construction loan does not hand over the money at closing. Dollar Bank describes the whole amount needed to complete the house being placed in an escrow account at closing, then paid out to the builder in draws as each phase of construction is finished, with the appraiser or a bank inspector inspecting the property before any draw is released to verify the work matches the original plans and specifications. During construction you pay interest only on what has been drawn, so the payments rise as the house does.

Source: Dollar Bank

This page is general information, not professional advice, and it is not legal advice. Building prices move with your lot, your plans and your local labor market, and the only number that counts is a written quote from a builder who has walked the site.

A published draw schedule, stage by stage

Draw	Share	What has to be finished
1. Foundation	10%	Excavation, footers, waterproofing, drains
2. Framed and under roof	15%	Framing, beams, sub-flooring, exterior doors and windows in, rough carpentry, roof papered, flashing done
3. Rough-ins	20%	Rough plumbing, wiring and heating
4. Exterior	20%	Brick, stone or siding; all exterior building complete including gutters and downspouts
5. Drywall or plaster	20%	Drywall or plaster
6. Completed	15%	Fixtures, HVAC, final floor coverings, painting inside and out, interior doors, back fill, landscaping, septic operable and ready for occupancy

Dollar Bank's published typical draw schedule for a construction loan, as a percentage of the total construction price.

Source: Dollar Bank

Lenders publish different schedules, and the differences are worth reading rather than smoothing over. Mutual Savings and Loan Association publishes six disbursements too, but weighted differently — 20% at the slab, 20% at framing and windows, 20% at exterior doors and the rough-ins, 15% at brick, sheetrock and cabinets, 20% at trim, fixtures and floor coverings, and a final 5% held for the occupancy permit and final inspection. Its schedule is itemised down to individual line items with their own percentages: slab poured 10.00%, framing walls 10.00%, roof complete 3.00%, appliances 2.00%.

Source: Mutual Savings and Loan Association

The share held back for the last draw is the part to look at first. Once the house is standing, it can be much of the leverage a homeowner has left.

What has to happen before a draw is released

Dollar Bank names the inspection as the gate: the appraiser or a bank inspector visits the property before any draw disbursement, and the visit is to verify that the work has been completed based on the original plans and specifications submitted. Mutual Savings adds conditions to specific stages on its own schedule — a slab spot survey and termite treatment before the first disbursement, a flood elevation where needed, and an application for flood insurance before the second. It also states a re-inspection fee, which is worth knowing about before a draw request goes in early.

Sources: Dollar Bank, Mutual Savings and Loan Association

What to check before you sign a draw schedule

Check that the stages on the lender's schedule match the stages in your builder's contract. Two documents describing the same house in different phases will argue with each other later.
Check what share is held to the end, and what has to be true before it is released.
Check who authorises each draw. Some lenders let the builder request a draw without your consent unless you say otherwise, and that is a form you sign at the start.
Check what an inspection costs and what a re-inspection costs.
Check what lien releases the lender wants from the builder and the subcontractors before each draw, because that paperwork is what protects the title.
Check what happens to the interest-only payments as the draws grow, and budget for the last months rather than the first.

The contract that sits behind the schedule, and how it decides who carries the risk: cost plus versus a fixed price contract.

A builder who has run this process a hundred times can walk you through their own draw schedule from memory. Ask. These are the custom home builders AI assistants actually name when homeowners ask. Nobody can pay to be on these lists.

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Questions people ask next

How many draws are in a construction loan?: Dollar Bank publishes six, at 10%, 15%, 20%, 20%, 20% and 15% of the total construction price. Mutual Savings and Loan Association also publishes six, weighted 20%, 20%, 20%, 15%, 20% and a final 5%. Lenders differ, so read the one in front of you rather than a general figure.
When is the first draw released?: On Dollar Bank's published schedule the first draw is 10% at foundation, covering excavation, footers, waterproofing and drains. Mutual Savings and Loan Association holds 20% for its first disbursement at the slab, and requires a slab spot survey and termite treatment, plus a flood elevation where needed, before it is paid.
Do I pay interest on the whole loan during construction?: No. Dollar Bank says no payments are due until funds are disbursed and that during construction you make interest-only payments on the amounts drawn, with the payments increasing as the total drawn increases. Once the house is complete the permanent loan begins and regular monthly payments start.
Who inspects the work before a draw?: Dollar Bank says the appraiser or a bank inspector inspects the property before any draw disbursement, to verify the work was completed based on the original plans and specifications submitted. That inspection is separate from the city or county building inspection your builder schedules.

Written for homeowners by Most Recommended Custom Home Builders, which measures which custom home builders AI assistants actually recommend in 12 U.S. metros. Nobody can pay to be on those lists. How we measure.