A ground-up construction note does not drop the whole project into the LLC account on the day you close. Land money and vertical money are not the same check. The vertical side moves in draws: scheduled releases tied to work that is actually in place. This page is how that schedule usually works for an investor or a builder closing through an LLC — what lot money looks like next to a vertical draw, how an inspection and a draw request generally move, why the last stretch of the build is where files stall, and how to plan the budget and the exit so the final release does not leave the project stranded. It is not a rewrite of construction loans for LLC investors. It is not how rehab draws work on a standing flip. And it is not the interest-only payment on a bridge while a sale or a permanent loan is still forming.
The “last 10 percent” in the title is the conceptual final stretch of the build: finishes, the final inspection, the certificate of occupancy, and the retainage or holdback a lender often keeps until that work is accepted. It is not a quoted holdback term. This page will not publish a percentage. The figure, if the note has one, is the one on your term sheet.
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender. The loan is business-purpose, closed in an LLC or another business entity, underwritten on the asset and the deal. The desk floor is $100k. No owner-occupied. This is a nationwide note, not a city page. Start on the Funded Funding homepage if you need the product list first, or read what the desk is.
Land money and vertical draws are not the same check
Land money is the part of the file that puts the lot in the entity, or that recognizes a lot the entity already holds. It is the dirt. On a purchase, that check is what lets the LLC take title to the land. On a lot you already own, there may be no land acquisition at all. The collateral is already in the entity, and the note is about the build. Either way, land cost is its own number. It is not a line you bury inside “the project.”
A vertical draw is one release of construction funds against a piece of the build that goes up from that dirt. Foundation, framing, dried-in, mechanicals, finishes, a final. Those stops are a map lenders often use. They are not a promise that every file uses the same stops, or that your note will name them in that order. A simple house and a larger build do not share a calendar just because both are called ground-up. Your draw schedule is the one on your term sheet. The loan pays for work in place. It is not the builder’s deposit account.
Closing can fund the land so the entity takes the lot. The vertical line stays on a schedule. The full construction budget is not a day-one wire. Some notes treat early site work as its own release. Some fold it into the first vertical draw. Some name a small initial release, and some do not. Do not assume one exists because another file had one. Money a crew wants before the first inspection — a deposit, a material package, a mobilizing fee — is liquidity on your side unless the note says otherwise.
The product this schedule belongs to is the ground-up construction loan, the same Ground-Up Construction product on the homepage product list. That page is what the loan is. This page is how the money moves inside it. This page will not restate a leverage figure, and it will not invent a rate or a term.
How a draw request and an inspection generally work
Read the schedule as an order of operations. The paperwork changes by lender. The order does not: work first, then a request, then a release if that work is actually there.
- Before close. Plans, a budget split into land and vertical, who is building, permit status, and the exit. The lender is reading whether that vertical number can finish the building you described. A thin budget does not become a generous one because the lot cleared.
- At close. Land funds, if the note is buying the lot, so the LLC can take title. The vertical line stays scheduled. Site work that has to happen before a foundation is still work. It is not a reason to treat the whole build as funded.
- A stage gets built. The builder does the work that line item names. Framing money does not pay for cabinets that have not been set. Finish money does not pay for a foundation that was never inspected.
- You request the draw. Photos, invoices, lien waivers when the note asks, and an inspection when the note requires one. “We’re close” is not a request. A percent-complete guess in an email is not the inspection.
- If that stage is in place, that draw releases. The next stage starts. Repeat until the vertical line is used or the agreed work is done. The last release waits on the finished scope, not on materials that are still on a truck.
The inspector — the lender’s inspector, or the inspection the note names — matches what is built to what the draw is paying for. If the stage is incomplete, that draw waits. You do not skip ahead to the finish money because a later trade is ready to start. Photos help. They do not replace the inspection when the note requires one. If the inspector cannot get on the site, or the work is covered before anyone looked, the release stays until that condition is fixed.
Lenders often hold back a portion of a stage, or of the vertical budget, until the work is accepted. That retainage, or holdback, is the order of payment. It is not a fine invented after you closed. This page does not quote the portion. Programs differ. Ask for that schedule before you promise a crew, a supplier, or a buyer a date the wire cannot keep.
Why the last stretch is where the file stalls
The early draws are usually the easy ones to see. A foundation is either there or it is not. Framing is either standing or it is not. The last stretch is harder. Finishes are a pile of small completions: flooring, cabinets, fixtures, paint, hardware, the punch list. A final inspection is a building-department event, not a lender photo. A certificate of occupancy — or whatever that department calls the paper that says the building can be used — is not something the note prints. Retainage is the money that stayed back until someone accepts that the project is actually done.
That is the last 10 percent. It is the end of the build, not a term-sheet percentage. Files stall there for mechanical reasons:
- The finishes are not actually done. The house looks close in a photo and fails a walk-through. The draw still points at work in place. Close is not in place.
- The final inspection has not cleared. Open corrections, a missed trade, or a visit that never got scheduled. The lender is not the building department, and this desk will not give you municipal advice. The paper still has to exist before a buyer or a takeout will treat the building as finished.
- There is no certificate of occupancy. Some exits will not close without that paper, whatever the local name for it is. A sale, a refinance, and an insurance binder often want the same thing. The construction note does not issue it.
- Retainage is still held. Lenders often hold back a portion until final acceptance, the final inspection, or the certificate of occupancy. If you already spent as if that portion were in the account, the last invoices have nowhere to land.
- The remaining vertical line no longer covers the remaining work. Early change orders, a budget that was thin before close, or finishes that were never priced leave a hole at the end. The lender does not invent a new budget because the house is almost done.
- The scope changed and nobody wrote it down. The draw still points at the old plans. The building no longer matches them.
The stall is a loop. The last draw is often the money that pays the finishes. The finishes are what the final inspection and the certificate of occupancy are waiting on. The retainage will not release until those are accepted. If the budget for that stretch is already gone, the project sits: not finished enough to sell or refinance, and not documented enough to draw. Interest on the construction note keeps running while the punch list sits. The last stretch is not free time. Sending the same request again with a longer email does not open the loop.
A freeze lifts when the named condition is fixed, or when the lender accepts a written change. Finish the stage, get the inspection, put the certificate on the file, or amend the scope and the budget. Then ask again.
Plan the budget so the final draw can finish the building
The way out of that loop is decided before the first vertical draw, not during the punch list. Split land cost and build cost. Inside the build cost, leave room for the last stretch: the finishes, the corrections a final inspection usually produces, and the carrying cost of the weeks those items take. A contingency that exists only as a hope is not a line on the budget.
Do not spend the finish money on an early change. Swapping a fixture inside an allowance is a builder conversation. Adding a room, moving a wall, or changing the footprint is a file conversation. One stays inside the line you already agreed to. The other changes cost, time, and what the finished building is. Write the change down before the next draw follows the new plan. Bring the change order, the revised budget, and what it does to the exit — sell, or stabilize and hold.
If the remaining vertical line cannot finish the remaining work, that is a capital question. It is not a draw the old schedule can stretch. When the hole is the space between what the construction note will still release and what the project now costs, say GAP on the file. Do not hide it inside a draw request for work that is not in place.
Deposits, long-lead materials, and a crew that wants to be paid before an inspection are cash you plan for. The schedule is doing its job when it refuses to fund work that is not there yet. Your builder’s contract has to live with that order. A contract that assumes the whole vertical budget is in the account at the dirt-work meeting will break at the first holdback.
Plan the exit so the final draw does not strand the project
A construction note is not the forever loan. Name the far side before you are waiting on the last release to create one. Two exits are the usual ones. Neither is promised by a draw.
A sale. The takeout is a buyer who closes and pays the note off. Buyers, title, and the lender behind the buyer usually want a finished building: final inspection, the occupancy paper, and a punch list that is actually done. The last draw has to be able to get the project to that paper. If the retainage is what pays the last invoices, and those invoices are what the certificate depends on, the budget was built backward. A listing is not a payoff. If the contract dies, the construction note is still the loan.
A DSCR refinance, or another permanent takeout. The takeout is a longer hold once the building is finished and can support it. What a DSCR loan is, and how it differs from a bank rental loan, already lives on what a DSCR loan is and DSCR versus a bank rental loan. This page will not rewrite them. A building without occupancy paper, without a lease, or without rent that can carry a permanent payment is not a DSCR file yet. Passing a framing inspection does not approve the refinance. The construction draw does not become the permanent loan. The DSCR product is a different file, after this one is actually finished.
If the construction note is coming due and the sale or the DSCR file is still forming, that wait is a different product. Short-term capital with an interest-only payment, while permanent debt is not ready, is the interest-only bridge. The bridge product itself is bridge loans for LLC investors. Read those pages for the hold. Do not assume the construction note extends itself because the punch list slipped. A maturity date is a payoff problem. Interest-only on a bridge does not finish the building, and a vertical draw does not create the takeout.
Name the exit on the application, and name what is still missing before that exit can close: the certificate, the lease, the buyer, the months the build still needs. “We will figure out the sale or the refinance when the house looks done” is how the last draw strands the project. The schedule can fund a real plan. It cannot stand in for the plan.
Ground-up draws, rehab draws, and a bridge are not the same schedule
Construction is the product this schedule belongs to: land plus a build, closed in an LLC or another business entity. Use that page for what the loan is. Use the Ground-Up Construction product on the homepage when you want the product list next to Fix & Flip, DSCR, bridge, and GAP. Use this page when the question is how the land check and the vertical draws move, and why the end of the build is where the file stops.
Rehab draws belong to a Fix & Flip: a house that is already standing, purchase plus a rehab line. Demo, rough-in, drywall, and finishes are a renovation of something that exists. Foundation, framing, and occupancy paper on a vacant lot are a build. Calling a gut rehab ground-up, or a new build a flip, is how the schedule on the note stops matching the job site.
An interest-only bridge is the payment while a sale, a DSCR refinance, or a bank takeout is still forming. It is not a vertical draw schedule. If the work is the point of the loan, do not label a ground-up file a bridge and hope inspections appear. If the building is finished and you only need time until permanent debt closes, say bridge.
What this desk is — and is not
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender. This is a national desk. The property can be in any state we can close. We do not publish an office address, and this note is not a city page. Terms vary by lender, property, and borrower entity. Not available in every state. We do not warehouse the loan. A draw schedule on a blog is not your term sheet.
The desk floor is $100k. Files under that are not this desk. Borrowers close in an LLC or another business entity. We do not stretch a build into an owner-occupied construction loan we are not licensed to do. If you will live in the house, this site is the wrong desk. Business-purpose does not mean “no documents,” and it does not mean every file funds.
This desk reads 1–4 unit investor files differently from 5+ unit and commercial files. Put the true unit count, the land cost, the vertical budget, the permit status, and the exit on the application. We will not invent a rate, a credit cutoff, a leverage figure, or a holdback percentage. Those numbers are the ones on a real note, or they are not numbers. The “last 10 percent” is the end of the build. It is not our retainage.
How to put the file here
- Confirm it is investor property. If you will occupy it, this site is not your lender.
- Entity ready to close. LLC or other business entity that can take title and the loan. Why investors fund through an entity is the LLC note.
- Deal on paper. Address, land cost, vertical budget, timeline, permit status, and the exit: sale, or a DSCR or other permanent takeout after the building is finished. If you already have plans, a draw schedule, or a builder bid, bring that.
- Name the actual problem. You need land money and vertical draws on a ground-up file. You are not asking for a rehab schedule on a house that is already standing, and you are not asking an interest-only bridge to build the structure.
- Apply. Same intake as the rest of Funded Funding: the application. Apply here if the file is ground-up and the construction money has to move in draws.
Still unsure whether the file is a ground-up build, a rehab draw on a flip, an interest-only bridge while permanent debt forms, or a gap between the construction note and the real cost? That is what the intake is for, including the answer “the budget cannot finish the building” or “this is still a bank file.”
Frequently asked questions
Do you get the full construction budget at closing?
No. Land or lot funds can close so the LLC takes title. Vertical construction funds release in draws as agreed stages are in place. The full build budget is not a day-one wire.
What is the difference between land money and a vertical draw?
Land money is the lot: the acquisition that puts the dirt in the entity, or the lot the entity already holds. A vertical draw is one release of construction funds against a stage of the build — foundation, framing, mechanicals, finishes — after that stage is in place. They are not the same check.
How do inspections and draw requests generally work?
You build the stage the schedule names, then you request the draw with whatever the note asks for: photos, invoices, lien waivers, and an inspection. The inspector matches what is built to what that draw would pay. If the stage is not in place, the release waits. “We’re close” is not a request.
Why does the last stretch of a ground-up build stall?
Finishes, the final inspection, the certificate of occupancy, and retainage stack at the end. Lenders often hold back a portion until that work is accepted. If the remaining budget was already spent, the last invoices have nowhere to land, and the building is not finished enough to sell or refinance. The “last 10 percent” is that stretch of the build. It is not a quoted holdback.
Does the final draw guarantee a sale or a DSCR takeout?
No. The final draw pays for work that is in place. It does not close a buyer, issue a certificate of occupancy, or approve a DSCR refinance or other permanent loan. If the sale falls out or the rent will not support a takeout, the construction note is still the loan. A maturity date is a payoff problem.
What is the minimum to fund, and who closes?
The desk floor is $100k. Files under that are not this desk. Borrowers close in an LLC or another business entity. The loan is business-purpose. If you will live in the property, this site is the wrong desk.
Ready to get funded?
If you have an LLC, a lot or a lot under contract, and a vertical budget you can explain, send the file. Draws pay for work in place. They do not wire the whole build on day one, and they do not finish the certificate, the sale, or the takeout for you. No fake funded counts. No stock testimonials. No owner-occupied stretch. No teaser rate that is not your file.
Ready to get funded?
Apply on the same intake we use live, or call or text (520) 552-7065.