These are the standard documents a borrower must submit to request a disbursement.
What is a draw request or draw package?
This waiver confirms that no payment is owed up to a specific date.
What is a conditional lien waiver?
This document insures the lender against title defects.
What is a lender’s title policy?
A contractor requesting funds before work is completed may indicate this risk.
What is front-loading or payment fraud?
This document is signed between the owner and contractor.
What is the construction agreement or AIA A101?
This assessment must be completed before funds are released.
What is a site inspection?
This is the purpose of a Notice of Commencement.
To establish the start of the project for lien rights timing.
This type of endorsement is typically required for each draw?
What is the 111 or 111.10 endorsement, date-down, or update?
Multiple change orders could be a sign of this.
What is poor planning or scope creep?
This document shows the project's timeline.
What is the construction schedule or Gantt chart?
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?
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?
The type of insurance covers damages caused by construction activities.
What is Builder’s Risk insurance?
Delays in this permit may halt funding.
What is the Certificate of Occupancy or final building permit?
This document is used to confirm when the project is almost complete.
What is a Certificate of Substantial Completion?
This term refers to holding back a percentage of each draw to mitigate risk.
What is retainage?
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?
This title endorsement protects against unfiled mechanic’s liens.
What is the 116 or similar mechanic’s lien endorsement?
This red flag appears when a contractor has several open liens on other projects.
What is potential insolvency or financial distress?
This AIA form is commonly used for payment applications.
What is the G702 form?
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?
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?
This must be verified before converting to a permanent loan.
What is a clean title update, final endorsement, and hazard insurance?
Funding a draw while this title condition exists puts the lender at risk.
What is an unreleased lien or clouded title?
This form lists the work breakdown and values for each scope item.
What is the Schedule of Values?