What Actually Happens At Every Construction Draw (And Who Signs Off)

Scarlett's Question

Scarlett was weeks from breaking ground on her build and had one nagging worry: could her builder just request money whenever he wanted, and would she have any say in it? It's a fair question, and a situation that comes up often for veterans using a VA construction loan for the first time. The good news is the process has a fixed structure, and nobody moves money without checkpoints along the way.

The Draw Sequence, Step By Step

Here's how it actually works. The builder completes a phase of construction. The lender then orders an inspection to independently confirm the work is done. You, the borrower, review and approve that phase in writing. Only after that approval does money release, and it releases only once lien releases are provided for that draw. Lien releases matter because they protect you from a subcontractor later claiming they were never paid for work already funded.

According to VA guidance on one-time close construction financing:

"Typical VA one-time close builds fund through staged draws of roughly 15-35% each, released after lender-ordered inspection and with lien releases provided at each draw."

Most builds run four to six of these draws total from start to finish. Every draw follows that same chain: phase complete, inspection ordered, borrower approval, lien releases, funds released.

Where Lenders Can Differ

While the baseline sequence comes from VA guidance, individual lenders sometimes layer additional documentation requirements on top. That could mean extra paperwork at each draw or additional verification steps. Before you break ground, ask your specific lender what their process looks like beyond the VA minimums so there are no surprises mid-build.

What Scarlett Did

Scarlett requested a full draw calendar before construction started. That single document told her how many draws to expect, roughly what percentage each would represent, and what she'd need to review and sign at each stage. That upfront clarity meant no confusion or friction once the build was underway.

One Thing You Can Do Today

If you're planning a build using your VA benefit, ask your lender for the projected draw schedule in writing before you sign a construction contract. Confirm how many draws are expected, what triggers each one, and what your specific lender requires beyond VA baseline rules. That way, like Scarlett, you know exactly what's coming at every phase, and nobody touches your money without your signature first.

If you're a veteran in Charleston or anywhere in my licensed states and you're heading into a construction build, I'm happy to walk you through the full draw process before you sign anything. Call 843-569-7283 and let's talk through it.

Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.