Annotated document
An annotated draw request
What a lender actually wants before releasing rehab money, why it takes longer than quoted, and the lien waiver that trips people up.
Draws are where a hard money loan stops being a document and starts being an operational process. Every draw is a small underwriting exercise, and the cycle time decides how much of your own cash is floating at any moment.
This is a specimen draw request with the parts that cause delays annotated.
| Loan number | HMF-2026-0142 |
|---|---|
| Draw number | 2 of 41 |
| Holdback remaining | $45,000 |
| Amount requested | $15,0002 |
| Line items claimed | Rough plumbing, rough electrical, HVAC set3 |
| Percentage complete | Per schedule of values, by line3 |
| Photographs | Date-stamped, one per line item claimed4 |
| Invoices | Contractor invoices for work claimed5 |
| Conditional lien waiver | From GC and each sub, for this draw6 |
| Unconditional lien waiver | From prior draw, evidencing payment6 |
| Permits | Copies of open permits and passed inspections7 |
| Inspection | Third-party, ordered by Lender upon receipt8 |
| Inspection fee | $250, deducted from disbursement9 |
| Funding | 1–3 business days after clean inspection10 |
| Borrower certification | No mechanic's liens; no material change to scope11 |
Fewer, larger draws mean more of your cash floating
Four draws on a $60,000 rehab means funding roughly $15,000 of work before each reimbursement — and if stage three starts before stage two is funded, two at once. More draws cost more in fees but tie up less cash. Pick deliberately based on which constraint you actually have.
↑ back to the documentYou cannot draw ahead of the work
The amount is capped by completed percentage against the schedule of values, not by what you have spent or committed. Materials paid for but not installed frequently do not count — ask before you buy long-lead items.
↑ back to the documentThe schedule of values is doing the real work here
This is why a line-item rehab budget matters so much at underwriting. A vague budget produces arguments at every draw about what percentage of "kitchen" is complete. A detailed one turns each draw into arithmetic.
↑ back to the documentPhotograph everything, date-stamped, every time
The most common cause of a same-day rejection is photographic evidence that does not clearly show the line item claimed. Take more than you think you need.
↑ back to the documentInvoices must match the line items, not your bank statement
The lender is reconciling against the schedule of values. An invoice for "plumbing" that spans two budget lines will be queried.
↑ back to the documentLien waivers are the step that surprises everyone
Two different documents doing two different jobs. A conditional waiver says "once I am paid for this work, I waive my lien rights for it". An unconditional waiver confirms you were actually paid last time. Chasing signatures from every subcontractor is what makes draws take longer than the quoted turnaround — start collecting them before you submit, not after.
↑ back to the documentUnpermitted work will stop a draw cold
And it can trigger an event of default under the note. If a scope change needs a permit, get it before the inspector sees the work, not after.
↑ back to the documentThe inspection is the step that slips
Two to five business days is typical, and it is scheduled by a third party who does not work for you. Combined with funding, plan on 5 to 12 business days per draw and build that into your contractor payment terms.
↑ back to the documentThe fee comes out of the disbursement
You request $15,000 and receive $14,750. Small, and worth remembering when you are pacing payments to a crew.
↑ back to the document"Clean" is doing a lot of work in that sentence
A failed inspection over one line item can hold the entire draw, not just the disputed portion. Ask in advance whether partial funding of undisputed items is possible — some lenders will, and it is worth knowing before you need it.
↑ back to the documentYou are certifying, not just requesting
Signing this asserts there are no liens and no material scope change. If the scope has changed, disclose it and get the budget formally revised. A false certification is a much bigger problem than a delayed draw.
↑ back to the document
Draw friction is the most under-modelled cost in this product. It does not appear on any term sheet, and it decides how much working capital you actually need.
See how draws actually work for the full cycle, and how much cash you actually need for what to hold in reserve.