Draw Requests
Lien Laws
Title & Insurance
Red Flags
Construction Docs
100

These are the standard documents a borrower must submit to request a disbursement.

What is a draw request or draw package?

100

This waiver confirms that no payment is owed up to a specific date.

What is a conditional lien waiver?

100

This document insures the lender against title defects.

What is a lender’s title policy?

100

A contractor requesting funds before work is completed may indicate this risk.

What is front-loading or payment fraud?

100

This document is signed between the owner and contractor.

What is the construction agreement or AIA A101?

200

This assessment must be completed before funds are released.

What is a site inspection?

200

This is the purpose of a Notice of Commencement.

To establish the start of the project for lien rights timing.

200

This type of endorsement is typically required for each draw?

What is the 111 or 111.10 endorsement, date-down, or update?

200

Multiple change orders could be a sign of this.

What is poor planning or scope creep?

200

This document shows the project's timeline.

What is the construction schedule or Gantt chart?

300

If the contractor hasn’t been paid from a prior draw, this is at risk.

What is the lien-free status or priority of the lender?

300

This is how a borrower can dispute a filed mechanic's lien without paying the lien amount.

What is obtain a lien bond or surety bond?

300

The type of insurance covers damages caused by construction activities.

What is Builder’s Risk insurance?

300

Delays in this permit may halt funding.

What is the Certificate of Occupancy or final building permit?

300

This document is used to confirm when the project is almost complete.

What is a Certificate of Substantial Completion?

400

This term refers to holding back a percentage of each draw to mitigate risk.

What is retainage?

400

This is the typical timeframe for a subcontractor to file a lien after work is complete in Texas.

What is the 15th day of the 3rd month following the month of work?

400

This title endorsement protects against unfiled mechanic’s liens.

What is the 116 or similar mechanic’s lien endorsement?

400

This red flag appears when a contractor has several open liens on other projects.

What is potential insolvency or financial distress?

400

This AIA form is commonly used for payment applications.

What is the G702 form?

500

Name two conditions that must be met before final draw funding.

What are a Certificate of Occupancy, final lien waivers, GC substantial completion form (G704), as-built survey/as-built plans, final title endorsement, or evidence of permanent insurance?

500

This legal action removes a lien from title but doesn’t resolve the underlying claim.

What is a lien release bond or bond to indemnify against lien?

500

This must be verified before converting to a permanent loan.

What is a clean title update, final endorsement, and hazard insurance?

500

Funding a draw while this title condition exists puts the lender at risk.

What is an unreleased lien or clouded title?

500

This form lists the work breakdown and values for each scope item.

What is the Schedule of Values?