Builder draws

For over three decades CFS has provided the funds needed to complete construction. If a vendor or subcontractor provides labor or materials and is not paid, their main recourse is to put a lien on the homeowner’s property, which would keep the homeowner from refinancing into their long-term mortgage. For this reason, our goal is to make sure loan funds reach the people who performed the labor and provided the materials on the property.

Submitting a draw

CFS uses an online draw system that lets you submit draw requests, upload documents and photos, and track progress in one place, online or from a mobile app. You’ll get real-time updates and notifications as your draw is reviewed. If you haven’t used it before, you’ll receive an email with login instructions after closing.

Turn message notifications on, since important requests and updates are sent through the system. You can also have notifications sent to your email.

Reimbursement

If the builder or homeowner has already paid for labor and materials and needs to be reimbursed, provide:

• Materials: vendor paid receipts showing a $0 balance due. Invoices stamped or handwritten “PAID” are not accepted. For online purchases, provide the email receipt or a screenshot of the order history. Each receipt must show the date, vendor name, materials purchased, amount paid, payment method, and $0 balance due.
• Labor: the subcontractor’s invoice and proof of payment. The invoice must show the subcontractor’s name, the property address, and a description of the work performed. Proof of payment must be either (1) a signed lien waiver with a copy of the signer’s photo ID, or (2) a payment record (cleared check, bank transaction screenshot, or Zelle, Venmo, Cash App or PayPal) showing the subcontractor’s name, the date, and the amount paid.

Pay direct

CFS can pay vendors and subcontractors directly. Add the vendor as a payee on the draw and upload their invoice, which must include the company or individual’s name, mailing address, phone number, a description of the work, and the property address or the homeowner’s name.

To draw funds for the builder’s administrative fees or profit, upload a company invoice showing the budget line item to take the funds from and the amount.

Start-up deposit

After loan approval and closing, the builder may request an up-front deposit of up to 5% of the contract price. Any deposits the homeowner paid before loan approval count toward that 5% maximum. No up-front deposits are provided to subcontractors, except for cabinetry and countertops. If a subcontractor requires a deposit, the builder or homeowner takes the risk of providing the funds, and once the work is complete may submit the subcontractor’s invoice and proof of payment for reimbursement.

Delivery

Enter delivery instructions in the general notes of each draw request. The options are:

• In-person pickup: free
• USPS mail: free
• Wire transfer: $30
• FedEx: $50

Any fee is deducted from that draw. Tell us which budget line item the fee should come from; if you are being reimbursed, the fee may also be deducted from the reimbursement amount.

Wire instructions must be uploaded to the builder documents folder in the draw system. Wires are sent only to the builder. If CFS is paying subcontractors directly, checks can be picked up, mailed by USPS, or sent by FedEx.

Compliance inspections

CFS requires three inspections on every home: (1) before the foundation concrete is poured, (2) before insulation is installed, and (3) final.

• Inside city limits: the builder provides the city’s inspections that go with the permits.
• Outside city limits: the builder hires a licensed real estate inspector or an engineer.

The builder orders these inspections and pays the inspector directly. A builder can’t inspect their own work. These inspections also protect the builder if the work is ever questioned. For all other draws, CFS may accept builder and homeowner photos to show the work is complete.

Homeowner approval

If the homeowner elects to approve draws, they will receive an email to review each draw and the funds requested, and approve it online. The builder’s budget is not shared with the homeowner unless they signed a cost-plus contract.

Turnaround times

The form survey (pre-pour), builder’s risk insurance and general liability insurance must all be on file before draws can be funded.

• Material-only draws paid directly to vendors may be disbursed the same day.
• Draws that include labor may be paid within 2 business days after the required backup and any city or inspection reports are approved.