How many draws are in a construction loan?

Typical ranges, by loan type.

The count follows the structure of the project and the program.

• Ground-up residential. Milestone schedules usually run four to seven draws: foundation, framing and dry-in, rough mechanicals, drywall and finishes, and a final. Larger custom homes stretch the schedule; small spec homes compress it.
• Renovation and rehab. Program rules often set a ceiling. FHA's Standard 203(k) program, for example, is administered with a maximum of five draws, each documented on HUD's draw request form after a consultant's inspection; the FDIC's lending guide summarizes the consultant's role in those draws.
• Commercial. Draws are typically monthly, submitted as a pay application with a schedule of values, and run for the life of the construction period rather than to a fixed count.
• Construction-to-permanent. The schedule has to fit inside the construction period. Fannie Mae's single-closing rules, for instance, limit the construction phase to no single period longer than 12 months and 18 months in total.

Treat these as ranges. The right number for a given loan is whatever the budget, the build sequence and the lender's risk appetite call for.

What actually sets the count.

Three things: the draw schedule in the loan agreement, the builder's cash-flow needs, and the lender's inspection policy. Fewer draws mean bigger advances and a longer gap between verifications. More draws mean tighter control and more inspection cost. Lenders that allow line-item draws rather than milestone draws often see more frequent, smaller requests.

Why it matters for lenders.

The draw count is a risk control, not an administrative detail. Every draw is a point where the lender confirms the collateral still supports the balance. A schedule with too few draws leaves large advances unverified; a schedule with no interval rule leaves stalled projects undetected. Write the count, the interval and the off-cycle triggers into policy, and apply them to every project the same way.

How RAZE handles it.

RAZE does not set the schedule; the lender does. Each draw or progress inspection is ordered in the Ordering Engine when the lender's policy says so, and every report lands in the same standardized format, so a five-draw rehab and a monthly commercial project are reviewed from the same kind of record. Residential pricing is per inspection, published on the RAZE Rate Card, so the cost of a schedule is simply the number of inspections it calls for.