The Draw Request Process for Custom Home Builders: Costs to Funding

A construction draw request asks for payment during a build. A signed request, a delivered lender package and money received are different events. Keep them separate so the homeowner understands what was approved and your office can see what still needs review or funding. Start by confirming the contract's billing method and the lender's current submission requirements.

Agree on the draw rules before preparing a request

Ask whether the lender requires its own form, inspections, invoices, receipts, lien documents or evidence for stored materials. Confirm who signs, who submits and how partial funding or retainage should be handled. Requirements vary by lender, loan, contract and jurisdiction. A generated PDF can organize the evidence, but it does not guarantee lender acceptance or legal compliance. Have the relevant professional review any legal-document requirements.

For a basic draw, requested amounts follow the agreed schedule and budget categories. For a Cost Plus draw, start from documented incurred costs and the contract's fee rules. A budget target is not an invoice and should not be copied into a Cost Plus request simply because funds remain in that category. Keep the difference clear when discussing budget planning with a homeowner.

Prepare costs group-first without losing the source detail

In Foundation, record an actual cost against a project group or a detailed budget item, then enter the real incurred amount. Include the vendor, description and source reference, and attach supporting files. A group-only cost is recorded once; it is not distributed across every budget item in that group. It uses the project's builder-fee setup unless a permitted fee exemption or override applies.

The entered incurred amount is direct cost, before the builder fee, not the homeowner's fee-inclusive amount. Review both figures before sending. If a source belongs to approved Cost Plus change-order work, associate it with that authorization. Select eligible approved bills or labor where appropriate instead of recreating an expense that is already recorded. Review draft allocations so the same source is not requested on another draft.

Reconcile the request before signatures

1. Review the sources in Costs Included in This Draw and remove anything outside the billing period or contract scope.
2. Confirm the builder fee, including any authorized installment or one-time fee.
3. Apply supported credits and owner/lender retainage separately.
4. Compare the net amount due with the detail and supporting documents.
5. Check prior approved billing so this request does not repeat earlier costs or fees.

A hypothetical draw and partial-funding example

Assume $18,000 of site costs and $27,000 of structure costs, each fee-eligible under an invented contract with a 12% builder fee. Direct costs total $45,000 and the fee is $5,400. With a $1,000 credit and $2,000 retainage withheld, and no retainage release, the net request is $47,400: $45,000 + $5,400 − $1,000 − $2,000. The percentage and amounts illustrate the calculation, not a recommended fee or market standard.

If that entire amount is approved but only $30,000 is funded, $17,400 remains to fund. Sending the package again does not reduce that balance. Likewise, recording lender approval is not evidence that $47,400 reached the builder's bank. Reconcile actual receipts and references before describing a draw as paid; avoid entering one receipt twice through overlapping payment and funding records.

Collect signatures, then review the lender package

Foundation supports homeowner review and signing, followed by the builder countersignature for the fully executed Cost Plus package. Review the requested or approved amount, source attachments and signature status. The lender package can include selected lender forms, draw attachments and supporting cost receipts. Verify readable files and the lender's checklist before exporting or forwarding it. Execution and delivery document the request; they do not fund it.

Track review, funding and accounting separately

Use the lender review and funding controls to distinguish inspection status, external approval, funded amounts and the remaining balance. Record an owner or lender funding event with the amount, method and reference when supported by evidence. A lender's release may not be a Stripe settlement, and a homeowner signature alone does not create a settled QuickBooks payment. Review the QuickBooks integration workflow for that handoff. Explore Cost Plus construction software or the Foundation walkthrough to evaluate the connected workflow without assuming a guaranteed funding time.