New construction financing: draws & timelines.

A construction loan doesn't work like a purchase loan. You don't get the whole amount at closing — the money is released in stages as the build progresses, tied to work actually completed. Understanding that draw structure is the difference between a build that flows and one that stalls waiting on cash.

How a ground-up construction loan works

A new-construction loan funds two things: the land (or your equity in it) and the cost to build. The build portion is held back and released in draws — payments made as each phase of construction is finished and verified. You pay interest only on the money that's actually been drawn, not the full loan, so your carrying cost ramps up with the project instead of hitting all at once.

At MD Private Lender, this comes from a lender who has built projects personally — so we understand real draw schedules and timelines, not a checklist someone printed off.

What a draw schedule looks like

A draw schedule maps loan disbursements to construction milestones. Exact stages vary by project, but a residential build often looks like:

1. Site work & foundation — clearing, footings, foundation poured.
2. Framing — structure framed, roof on, "dried in."
3. Mechanicals — rough plumbing, electrical, and HVAC installed.
4. Insulation & drywall — walls closed up.
5. Interior finishes — cabinets, flooring, fixtures, paint.
6. Final & certificate of occupancy — punch list done, CO issued.

Each draw is released after that phase is confirmed complete — by photos, video, or an inspection — so the money keeps pace with the work.

How draws actually get funded

• You complete a phase and submit a draw request with documentation.
• We review or inspect the work.
• Funds are released — we fund draws in 24–48 hours after approval, so subs and suppliers get paid and the job doesn't stall.

Fast draws matter more on a build than almost anything else: a crew that isn't getting paid on time moves to the next job, and your timeline slips.

Timelines and holding costs

Construction loans are short-term — long enough to build and sell or refinance, typically with interest-only payments while you build. Because you pay interest only on drawn funds, your holding cost is low early and grows as the project fills in. The two things that blow up a construction budget are time (every extra month is carrying cost) and change orders (scope creep). Build a realistic schedule and a contingency into your numbers — the same discipline as ARV, LTV & draws on a rehab.

What we'll want to see

• The lot — and confirmation it's buildable (permits, utilities, access). If you're still acquiring land, see land & lot loans.
• Plans, a realistic build budget, and a draw schedule.
• Your builder and their track record.
• Your exit — sell the finished home, or refinance and hold.