Diss-bursement

With the foundation built and the framing underway we were finally able to request a reimbursement from the bank for the materials, labor and work completed. The relief I felt quickly faded when I learned how complicated the bank disbursement process was.

The process goes a little something like this. Twenty-four to forty-eight hours prior to submitting a disbursement request the construction management company requires that you post a notice of anticipated funds at the job site. This document states the name of the bank, the owners names and how much money you are requesting. It's a fun way to advertise how much money you are spending to build your house to your whole neighborhood. :)

Once the disbursement request is electronically submitted to the construction management company they send someone out to the job site to take pictures within 24 hours. They take the notice of anticipated funds paperwork.

Every time I request a disbursement from the bank I have to submit the following:

1). Owners Affidavit- a signed and notarized document outlining the total dollar amount being requested for the disbursement.

2). General Contractors Lien Waiver- a signed and notarized document outlining the total dollar amount for the work completed. *A lien waiver proves that payment was made, received and waives any future lien rights against the property.

3). Subcontractor Lien Waiver- a signed and notarized document outlining the total dollar amount for the work completed. In this case the foundation.

4). An invoice from my dad for his GC work. In this case the framing.

5). A draw request. This is another document that breaks out of all of the individual line items that will make up your total projected budget to build.

6). All receipts, statements and invoices for materials paid and delivered.

Based on the pictures taken the construction management company will assess the percentage completed against the money you are requesting to draw. Ex: I request the full amount for the foundation. The construction management company always sides with the bank so if they don't believe the foundation is 100% complete they will only grant you a dollar amount based on what they believe has been completed.

A few more hoops the bank makes you jump through to get your loan money. You are not allowed to request money on deposits paid to subcontractors. Good thing no one will step foot on your job site unless they get a signed contract and deposit. You can only get reimbursed after the subs work has been completed. You cannot get a disbursement of funds on materials unless they are delivered on site or fall under a custom order like engineered trusses, windows or cabinetry. Custom ordered materials still require a 50% deposit upfront to order.

Once the construction management company reviews all of your paperwork and approves the request it is then sent to the loan servicing department at the bank. They can take up to 5 business days to make the funds available via a check or direct deposit to the GC.

It's that easy we only have to do this process a total of 9 times! Finally the bank only pays for the first 5 times that the construction management company comes out to your site. After the 5th time you have to pay them $150 every time they come out to take pictures.

Now that I have been through this process several times I feel like a pro. I have a new found respect for what a GC is responsible for!