FREQUENTLY ASKED QUESTIONS
Looking for answers? Browse our FAQs to find helpful information to guide you through the draw process:
1. How do I get started with submitting draw requests for my construction project?
Once your construction loan is funded, you will receive an email from CV3’s Fund Control Team with all of the necessary forms and instructions to get started.
2. How do I request my first draw? Is this process different than requesting subsequent draws?
Submitting accurate documentation is key to a timely draw process. All draw requests should be submitted via the TrustPoint system which provides a streamlined draw submission workflow.
Please submit items 1-3 for the first draw. For all subsequent draws, please submit items 2-3.
- Wire Instructions: Complete and return so we know where to send reimbursement funds.
- Proofs of Payment: Submit in ANY of the following forms:
- Point of sale receipts
- Bank statements
- Cancelled checks
- Lien waivers
- Plans and/or Permits: Submit as noted at the bottom of your fully executed Feasibility Report.
3. How do I know if plans or permits are required for my draw?
To find out if plans or permits are required for your draw, check your Feasibility Report. At the bottom of the report, directly beneath the “Total Budget Amount,” you will see an indication that says either “Draw Hold for Plans,” “Draw Hold for Permits,” or “Draw Hold for Plans & Permits.” This will let you know what is required before proceeding with your draw request.
4. How long does it take to process a draw request?
Draw requests are typically processed within 5 business days once a complete and accurate submission is received. For example, if you submit a draw request on Monday and all documentation is in order, we aim to process it by Friday.
5. What can I expect regarding the inspection process? After submitting your draw request, we will review and verify the provided documents and initiate the site inspection. This inspection is required at each draw request. The site inspector from one of our 3rd party inspection companies will call the point of contact that you had previously provided. Once the inspection report has been received, we’ll complete our internal review and reach out if there are any additional questions.
6. Who does CV3 release draw reimbursements to?
CV3 releases draw reimbursements exclusively to the borrower or sponsor. We do not release draws to vendors or contractors directly.
7. What is the minimum draw amount?
The minimum draw amount is $5,000.
8. Is there a fee for submitting a draw request?
Yes, there is a draw fee of $325 for each submission.
9. Can I change my draw wire instructions?
Yes, you can change your draw wire instructions by completing a new wire instructions document. For your security and to protect against fraud, a CV3 representative will personally contact you to confirm the updated information before any changes are processed.
10. How many draws am I able to take?
As many as needed to complete the project within the structured loan terms, there is no system limitation on number of draws. Only requirement is the minimum draw amount listed above.
11. What does it mean if my construction project is “partially financed”?
When your project is “partially financed,” it means that the loan provided by CV3 only covers a percentage of your construction costs requiring you to cover the balance. For example, if your loan covers 80% of the project, you will be responsible for funding 20% with your own money. This contribution happens at all draws except for the final draw. As an example, if the approved draw reimbursement was $10,000 and the project is 80% funded, CV3 will wire $8,000 to our client.
This is a common practice in construction financing, where lenders typically require borrowers to contribute some equity upfront to ensure their commitment to the project. Before CV3 disburses any funds, you may need to demonstrate that your portion of the project costs has been spent. The exact percentage and requirements are based on the terms of your loan agreement.
12. Am I able to reallocate funds in TrustPoint?
Reallocations are permitted but need to be reviewed. We prefer reallocations when work is complete. If you choose to reallocate prior to line-item completion, please provide documentation to support the request. Invoices and updated estimates are always appreciated!
13. What is contingency, and why is it important in construction financing?
Contingency is a reserve fund set aside to cover unexpected costs that may arise during a construction project. This ensures that funds are available to deal with unforeseen expenses, like material price increases or changes in the project scope.
14. What are CV3’s contingency fund guidelines?
To ensure the smooth completion of your project, we aim to keep your contingency funds available throughout its duration. For example, if your project is 25% complete, you’ll have access to 25% of your contingency funds. If your project is 85% complete, you’ll have access to 85% of the funds. This approach helps cover any unexpected expenses that may arise down the road and ensures that you have financial flexibility until the project is fully completed.
15. Can I use lien releases as proof of payment during the construction draw process?
Yes, lien releases can be used as proof of payment during the draw process and are especially helpful when validating cash payments! Once the payment is complete, an unconditional (progress or final) lien release can be provided as proof that the contractor or vendor has been paid for the requested reimbursement.
16. Who can I contact for help with my draw request?
We’re here to assist you! If you have any questions or need support during the draw process, simply email us at fundcontrolteam@cv3financial.com, and our team will be happy to help.
17. What new technology is coming to improve the draw process, and when will it be available?
We are excited to announce the launch of TrustPoint.AI, CV3’s new Construction Loan Administration Tool that will make draw requests faster and more efficient.
This platform will offer real-time project tracking, seamless draw request submissions, and enhanced transparency throughout the process. This will speed up the process while ensuring the authenticity and security of your submissions.
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