If you've never financed a renovation with borrowed rehab dollars, the draw process can feel like a black box. This guide gets a rehab draw schedule explained in plain terms: how inspections work, how to request funds, how fast money actually lands in your account, and the mistakes that slow investors down. Understanding this up front keeps your project moving and your contractors paid on time.
What Is a Rehab Draw Schedule?
On a fix and flip loan or ground-up construction loan, we don't hand you all the rehab or construction budget at closing. Instead, we hold those funds in reserve and release them in stages, called draws, as work is completed. This protects you as much as it protects us — it keeps cash tied to actual progress instead of promises.
A draw schedule is simply the agreed breakdown of your rehab or construction budget into funding stages, usually tied to specific milestones: demo complete, rough plumbing and electrical, drywall, finishes, and so on. The schedule is set before closing so there are no surprises mid-project.
How the Draw Process Works
The process is the same basic sequence whether you're doing a light cosmetic flip or a ground-up build:
- You complete a stage of work. Pay your contractor or materials invoices as needed.
- You submit a draw request. This typically includes photos, invoices or receipts, and a short description of what was finished.
- We order an inspection. A third-party inspector visits the property to confirm the work matches what was requested.
- We review and approve. Once the inspection confirms progress, your draw moves to funding.
- Funds are wired. Money goes to your account (or, on some files, a title/escrow company) so you can pay your crew and move to the next stage.
This cycle repeats until your rehab or construction budget is fully drawn.
How Fast Draws Get Funded
Speed is where a lender matters. Many investors assume all private lenders move at the same pace — they don't. Once we receive a complete draw request and the inspection confirms the work, we move quickly to get funds out, because we know unpaid subs and idle crews cost you money every day.
The biggest variable isn't our underwriting — it's how complete and well-documented your draw request is on day one. A clean request with clear photos and matching invoices moves straight through. An incomplete one bounces back, and that round trip is what actually causes delays.
Say you're flipping a property with a $150,000 rehab budget split into three draws:
- Draw 1 (demo, framing, rough-ins): $50,000
- Draw 2 (drywall, flooring, cabinets): $60,000
- Draw 3 (paint, fixtures, final punch list): $40,000
You finish demo and framing, submit photos and paid invoices, we schedule the inspection, it confirms the work, and $50,000 is released. You use that draw to pay your crew and start Draw 2's work immediately — no waiting on us to start the next phase.
Mistakes That Delay Draws
Most draw delays aren't caused by the lender — they're caused by avoidable paperwork and sequencing errors. The common ones:
- Submitting partial work as complete. If the inspector sees unfinished items from the requested scope, the draw gets kicked back.
- Missing invoices or receipts. We need documentation that money was actually spent on the work shown.
- Poor photos. Blurry or unclear photos that don't show the full scope slow down review.
- Skipping ahead in the schedule. Doing Draw 3 work before Draw 1 is inspected creates confusion and rework in the paperwork.
- Not scheduling access for the inspector. A locked gate or no one on site means a wasted trip and a rescheduled inspection.
Every one of these is a timeline problem, not a money problem — and every one is preventable with a little planning before you submit.
Rehab Draws vs. Construction Draws
The core process is the same for fix and flip, bridge loans, and ground-up builds, but construction draw schedules tend to have more stages because there's more to inspect: foundation, framing, mechanicals, and finishes each typically get their own draw. Rehab draws on a lighter flip might only need two or three stages. Either way, the schedule is set at closing so you know exactly what triggers each release.
How Leverage and Draws Work Together
On strong files, we can fund fix and flip deals up to about 90% of purchase price and up to 100% of rehab costs, subject to underwriting. That high rehab leverage is exactly why the draw process matters — the less cash you're putting into renovation yourself, the more your project depends on draws moving smoothly. First-time flippers and first-time builders are welcome, and foreign nationals can qualify on some programs. Run your numbers through our fix and flip calculator or deal analyzer before you make an offer, so your draw schedule and your budget are realistic from day one.
If you're holding the finished property as a rental afterward, it's worth understanding how the next phase is priced too — our DSCR rental loans commonly run 6% to 8% depending on credit, leverage, and the property, and the DSCR calculator can help you plan the refinance exit. Investors running several projects at once sometimes consolidate with portfolio loans, and larger value-add deals may fit better under our commercial and multifamily loans. For the full short-term picture, see fix and flip loan costs and how much cash you need for your down payment.
Rates on all of these programs move daily, so always check your real number on our rate and loan estimator rather than relying on a quote you saw weeks ago.
What to do next
A rehab draw schedule explained in advance is a project that runs on time. Talk to our loan officers about your scope of work and budget, and we'll build a draw schedule that matches how you actually plan to build. Browse all loan programs, then get a quote or call (850) 279-8588 to get your draw schedule set before you close.
Frequently asked questions
How many draws will my rehab project have?
It depends on your budget and scope — a light cosmetic flip might have two or three draws, while a full gut rehab or ground-up build can have five or more tied to specific construction milestones.
Who pays for the draw inspections?
Draw inspections are typically a flat fee passed through per draw; your loan officer will confirm the exact cost and schedule when your draw schedule is set at closing.
Can I get a draw before the inspection happens?
No — inspection confirmation is what triggers funding. Submitting a complete, well-documented request and being available for the inspector's visit is the fastest path to getting paid.
What happens if my rehab costs run over the original draw schedule?
Budget overruns need to be discussed with your loan officer as early as possible; depending on the file, adjustments may be possible, but ask your CPA or attorney about how cost overruns affect your overall deal economics.