Construction Lending Glossary

The pace at which available homes or lots sell in a market, used to gauge demand for spec construction.

Financing for land purchase plus horizontal improvements — grading, roads, and utilities — to create buildable lots.

Insurance settlement basis equal to replacement cost minus depreciation.

A party (such as the lender or owner) added to another's liability policy for protection against project claims.

A dollar or percentage change applied to a comp's sale price to account for differences from the subject property.

Arc-fault circuit interrupter protection detecting dangerous arcing, required on most living-area circuits.

The projected market value of a property after renovations are complete, used heavily in fix-and-flip lending.

Closing gaps and penetrations in the building envelope to reduce uncontrolled air leakage.

A budget placeholder for unselected items (e.g., flooring); actual selections reconcile against it.

The reserve banks hold against expected loan losses under the CECL accounting standard.

The panel's rated capacity (commonly 200A residential), sized to the home's electrical load.

Bolts embedded in the foundation that secure the sill plate and frame against uplift and lateral loads.

The kitchen and laundry appliances specified in the budget and installed near completion.

An independent, licensed opinion of a property's value, required for most real-estate-secured loans.

The shortfall when appraised value comes in below purchase price or projected cost, requiring extra borrower equity.

Rules insulating appraisers from pressure by loan production staff, enforced through ordering firewalls and appraisal management companies.

A third party that orders, assigns, and reviews appraisals, providing independence between lenders and appraisers.

A qualified reviewer's assessment of an appraisal's accuracy and compliance before the lender relies on it.

Lenders generally underwrite to the lower of the two, which affects maximum loan amount.

Laminated, dimensional asphalt shingles with longer warranties and higher wind ratings than 3-tab.

Revised drawings documenting what was actually constructed, including field changes.

The appraised value a property is expected to have once construction is finished, used to underwrite construction loans.

The current market value of a property in its present condition, before any construction or improvement.

The value a taxing authority assigns for property tax purposes, often differing from market value.

The lender's right to step into the borrower's construction contract and plans if the loan defaults.

The complete, timestamped record of every action, document, and decision on a loan file, allowing any disbursement to be reconstructed and defended.

A statistical model estimating property value from data, used for screening and portfolio monitoring rather than origination of construction loans.

A device stopping contaminated water from flowing backward into the potable supply.

The protective, decorative wall surface behind counters, typically tile.

An older method with studs running continuously from foundation to roof, largely replaced by platform framing.

The vertical posts supporting a handrail, spaced to prevent fall-through.

Trim covering the joint between wall and floor.

A full-height below-grade foundation creating usable space beneath the first floor.

The vented fan removing moisture from bathrooms to prevent mold, required to duct outdoors.

Pre-cut fiberglass or mineral wool blankets fitted between framing members.

A major horizontal structural member carrying loads from joists or walls to posts or foundations.

The maximum load soil can support without failure or excessive settlement.

Sewer, drain, and supply piping installed beneath the slab or ground level before the foundation pour.

A fixed reference point of known elevation used to control grades during construction.

The individuals who ultimately own or control a borrowing entity, which lenders must identify under customer due diligence rules.

A contractor's priced proposal; a bid is typically binding while an estimate is approximate.

A surety's guarantee that a bidder will enter the contract at its bid price if selected.

Short framing pieces installed between studs or joists for support, fire-stopping, or attachment points.

A pressurization test measuring whole-house air leakage, required by many energy codes.

Loose fiberglass or cellulose blown into attics and cavities for continuous coverage.

The architectural and engineering plans detailing design, dimensions, and technical specifications.

A survey establishing the legal property lines and corners of a parcel.

An individual circuit from the panel serving outlets, lights, or equipment.

The protective switch that interrupts a circuit under overload or fault.

A single non-structural layer of brick over framed walls, providing brick appearance without structural mass.

Short-term financing that covers a gap between transactions, such as between acquisition and construction or construction and permanent financing.

The loss of first lien position that can occur when construction visibly begins before the mortgage is recorded.

Bank Secrecy Act and anti-money-laundering requirements, including customer due diligence on construction borrowers and entities.

A lender's analysis of the builder's cost breakdown to confirm the budget is complete, realistic, and sufficient to finish the project.

A revolving facility allowing a builder to finance multiple projects under one master agreement, with sub-limits per house or lot.

Property coverage protecting a structure under construction against fire, wind, theft, and vandalism until completion.

The complete barrier of walls, roof, windows, and foundation separating conditioned from unconditioned space.

Municipal inspections at code-required stages (footing, framing, rough MEP, final) authorizing work to proceed.

The primary permit authorizing construction of a structure per approved plans.

The GC's process of awarding subcontracts and locking material prices after contract signing.

The carcass construction (plywood or particleboard) versus the visible door and drawer fronts.

Built-in storage units in kitchens and baths, in stock, semi-custom, or custom grades.

The quarterly financial report banks file with regulators, including construction loan balances used to benchmark lending activity.

A post-closing return trip to fix warranty items.

The supervisory rating system (Capital, Assets, Management, Earnings, Liquidity, Sensitivity) regulators use to score bank health.

A projecting structure supported at only one end, such as a bumped-out floor or balcony.

Tufted floor covering over cushion padding, stretched and tacked at edges.

Trim framing door and window openings.

Covenants, conditions, and restrictions governing a community, including architectural and construction standards.

Current Expected Credit Losses — the accounting standard requiring lenders to reserve for lifetime expected losses at origination.

The document issued for projects (like remodels) that don't require a certificate of occupancy.

The document evidencing a party's coverage, limits, and effective dates — collected and tracked by lenders.

The government certificate confirming a building complies with codes and may be occupied — a standard final-draw condition.

The unbroken documentation linking a draw request to its inspection, photos, approvals, and disbursement — the backbone of a defensible loan file.

A documented modification to the contract's scope, price, or schedule, signed by both parties.

An accessible fitting allowing drain lines to be cleared of blockages.

Removing trees, stumps, brush, and debris from the building site before grading.

The completion package: warranties, manuals, lien waivers, as-builts, and final inspections.

Shelving and organizer installations completing bedroom and storage spaces.

A provision penalizing underinsurance by reducing claim payments if coverage is below a required percentage of value.

The lender's formal offer stating loan amount, rate, term, and conditions that must be satisfied before and during funding.

Mechanically densifying soil or fill so it can support loads without settling.

A recently sold, similar property used as a benchmark in the sales comparison approach.

A required project completion deadline in the loan agreement; missing it can constitute default even if payments are current.

Funds withheld at closing or conversion to cover minor unfinished items, released when the work is verified complete.

A guarantor's promise that the project will be finished, protecting the lender from an abandoned half-built asset.

The risk from overexposure to one asset class or geography; regulators apply guidance thresholds to construction and CRE concentrations.

Concrete masonry units used for structural walls — the dominant exterior wall system in Florida homes.

Piping carrying moisture removed by the evaporator coil safely out of the structure.

The outdoor coil and compressor assembly releasing heat absorbed from indoors.

A waiver effective only once the associated payment actually clears — safer for the party signing it.

The term many states (including Florida) use for a mechanic's lien arising from unpaid construction work.

A short-term loan funding the construction of a building, disbursed in draws against verified progress rather than in a lump sum.

The systems and processes lenders use to manage the full lifecycle of a construction loan — budgets, draw schedules, disbursements, compliance, and reporting.

A professional managing the project on the owner's behalf, sometimes at-risk with a guaranteed price.

A single-close loan that funds construction and automatically converts to a permanent mortgage at completion, avoiding a second closing.

An unallocated budget line (typically 5–10% of hard costs) reserved for unforeseen costs like price escalations, delays, or design changes.

The engineered chain of connections transferring wind and seismic forces from roof to foundation.

Planned grooves or breaks in stucco or concrete that direct where shrinkage cracks occur.

Valuation based on land value plus depreciated replacement cost of improvements — especially relevant for new construction.

A line-item schedule of all project costs by trade or phase, submitted by the builder and used as the baseline for draw funding.

A contract paying actual costs plus a fee, placing overrun risk on the owner.

The estimated remaining cost to finish the project; if it exceeds undisbursed funds, the loan is out of balance.

Work surfaces of granite, quartz, laminate, or solid surface installed on cabinets.

Policy language adapting homeowner or property coverage to a structure while it's being built.

A geographic area where a lender cannot reliably source timely inspections, creating draw delays and portfolio risk.

A shallow unfinished space between the ground and first floor providing access to plumbing and mechanicals.

The sequence of dependent tasks determining minimum project duration; delays here delay everything.

A loan rated special mention, substandard, doubtful, or loss by examiners or internal review, requiring heightened monitoring.

Decorative trim at the wall-ceiling joint.

Balancing earthwork by moving soil from high areas (cut) to low areas (fill) to reach design grades.

The superintendent's dated record of weather, crews, deliveries, and events — valuable evidence in disputes.

The accuracy, completeness, and consistency of loan data across systems — a prerequisite for reliable reporting and audits.

The permanent weight of the structure itself and fixed components.

Removing construction waste throughout and after the build, leaving the site ready for occupancy.

A supplemental policy reducing the effective deductible on a primary policy, used with large hurricane deductibles.

The borrower's voluntary transfer of the property to the lender to avoid foreclosure.

A security instrument used in many states where a trustee holds title until the loan is repaid.

The bending of a structural member under load, limited by code to prevent bounce and finish cracking.

Insurance for income or interest losses caused by covered damage that pushes back the completion date.

Removing equipment and temporary facilities as the project closes out.

Loss in value from physical deterioration, functional obsolescence, or external factors, deducted in the cost approach.

The tested wind pressure rating of windows and doors, matched to the site's wind zone.

An appraisal performed without a site visit, using public records, MLS data, and third-party information.

Payment of draw funds directly to the borrower, who then pays contractors — simpler but higher risk of fund diversion.

State taxes (notably in Florida) on notes and mortgages, calculated on the loan amount and payable at recording.

Knobs, levers, hinges, and locksets installed at trim-out.

Vertical pipes carrying water from gutters to the ground or drainage, away from the foundation.

The soil absorption area where septic effluent is dispersed and treated.

The full sequence from draw request submission through inspection, review, approval, and fund release; cycle speed directly affects builder cash flow.

The release of loan funds to a borrower or contractor at a verified stage of construction, typically contingent on a completed inspection report.

An administrative charge assessed by the lender for processing each draw request.

How often draws may be requested (weekly, monthly, or per milestone), set by the loan agreement and affecting builder cash flow.

A site visit by a qualified inspector to verify construction progress before a lender releases draw funds, producing photo-documented evidence tied to the draw request.

A borrower or builder's formal application for a portion of construction loan funds, itemized against the approved budget and supported by progress documentation.

The pre-agreed plan dividing a construction loan into stages, defining when funds are released as milestones are completed.

Metal flashing at roof edges directing water into gutters and protecting the fascia.

An exterior-only inspection appraisal, used where interior access is unnecessary or unavailable.

The milestone when roof underlayment, windows, and wraps make the structure weathertight — a common draw stage.

Gypsum board panels forming interior walls and ceilings, taped and finished for paint.

A loan underwritten on the property's debt service coverage ratio — rental income relative to debt payments — rather than borrower income.

The system of trunks and branches distributing conditioned air to rooms and returning it to the air handler.

The rented container for construction waste, a recurring site cost.

Drain-waste-vent piping carrying wastewater out and venting sewer gases through the roof.

A legal right to use another's land for a specific purpose, such as utilities or access, that survives ownership changes.

The roof edge overhanging the wall, comprising soffit and fascia.

The age a property appears to be based on condition and updates, as opposed to its chronological age.

Exterior insulation and finish system — synthetic stucco over foam board, requiring careful drainage detailing.

Lighting, switches, and outlets installed at trim-out.

The load center distributing power through breakers to branch circuits.

Running cable and installing boxes for outlets, switches, and fixtures before drywall.

A surveyor's document recording a building's elevation relative to flood levels, used for flood insurance rating.

A flat exterior view of each side of the structure showing finishes and heights.

A structure or improvement extending onto neighboring property or into an easement or setback.

An amendment expanding or modifying title policy coverage, such as pending disbursement or survey endorsements.

A real-wood veneer over a stable plywood core, more moisture-tolerant than solid wood.

Manufactured structural wood products (LVL, PSL, glulam) offering greater strength and consistency than sawn lumber.

The borrower's required cash or land contribution to the project, typically injected before loan funds are advanced.

Measures like silt fences and swales that prevent soil runoff during construction, often required by permit.

Professional liability coverage for negligent acts or mistakes by service providers such as inspectors, architects, and engineers.

Funds held by the lender or a third party for taxes, insurance, or completion items, disbursed when conditions are met.

A value estimate permitted instead of a full appraisal for certain lower-risk or lower-balance transactions.

The indoor coil where refrigerant absorbs heat from passing air, cooling the airstream.

Digging for foundations, basements, utilities, or other below-grade work.

A recurring report flagging loans that violate policy thresholds, such as out-of-balance budgets or missed completion dates.

Clay-heavy soil that swells when wet and shrinks when dry, requiring special foundation design.

The estimated marketing period a property would have required to sell at the appraised value.

A charge for extending the construction loan maturity when the project runs past the original term.

The sealed sill assembly at exterior doors blocking water and air infiltration.

Value loss from factors outside the property, like a neighboring landfill or declining market.

An inspector's rejection requiring corrections and re-inspection before work continues.

The body of law (ECOA, Fair Housing Act) prohibiting discrimination in any aspect of credit, including construction lending decisions.

The horizontal board at the roof edge where gutters attach, protecting rafter ends.

An analysis of whether a proposed project's projected value and absorption justify its cost.

Cement-sand-cellulose siding (e.g., Hardie board) resisting fire, pests, and rot with a wood-like appearance.

The last disbursement, typically conditioned on a certificate of occupancy, final inspection, final lien waivers, and completed punch list.

A waiver releasing all lien rights on the project, typically required before the final draw.

Final contouring of the ground around the completed structure to direct water away from the foundation.

Framing members or materials that slow fire spread through concealed wall and floor cavities.

The initial disbursement, often covering permits, site work, or land payoff, and frequently subject to extra documentation requirements.

Short-term financing to acquire and renovate a property for resale, typically underwritten against ARV with a rehab draw component.

A contract at a set total price, placing cost overrun risk on the contractor.

The code measure of plumbing demand used to size supply and drain piping.

Metal or membrane pieces sealing roof and wall intersections, penetrations, and openings against water.

Flexible insulated ducting used for branch runs in residential systems.

A single-close loan feature allowing the permanent rate to be reduced if market rates fall before conversion.

The required check of whether improved property lies in a special flood hazard area, triggering mandatory flood insurance.

Coverage for flood damage, federally mandated for structures in special flood hazard areas securing regulated loans.

The federal mandate that structures in flood zones securing federally regulated loans carry flood coverage before disbursement on the structure.

The layer between subfloor and finish flooring providing smoothing, sound, or moisture control.

Below-grade concrete bases that spread the structure's load to the soil and anchor the foundation.

A contract clause excusing performance delays caused by events beyond the parties' control, such as hurricanes or supply disruptions.

The legal process by which a lender enforces its lien and sells the property after default.

A survey verifying foundation forms are correctly placed within setbacks before concrete is poured.

The lowermost structural element transferring the building's load to the ground through the footings.

Constructing the structural skeleton of walls, floors, and roof from wood or metal studs, beams, and joists.

A padded cost breakdown that overstates early-stage line items so the builder receives disproportionate funds early in the project.

Value loss from outdated or awkward design features, such as a five-bedroom home with one bathroom.

The misuse of draw proceeds for purposes other than the funded work — a core risk that inspections and title updates are designed to catch.

A disbursement method where a third party manages payments directly to contractors and suppliers to ensure funds reach the intended parties.

A fuel-fired or electric heating unit generating warm air distributed through ducts.

The triangular wall section between the edges of a dual-pitched roof.

A bar-chart schedule mapping task durations and dependencies over time.

Title protection for the period between closing and recording, when new matters could attach to title.

Natural gas or propane piping serving appliances, pressure-tested before concealment.

The professional responsible for managing the entire project: subcontractors, materials, schedule, budget, and code compliance.

Coverage for third-party bodily injury and property damage arising from the contractor's operations.

GPS coordinates and timestamp embedded in inspection photos, proving evidence was captured at the actual site at the stated time.

Ground-fault circuit interrupter protection shutting off power at tiny current leaks — required in wet areas.

A primary beam supporting other beams or joists, often at the center of a floor system.

Leveling and shaping the land to establish proper drainage and a stable base for the foundation.

Moisture-resistant panels used behind tile in wet areas.

Finished, above-grade living space measured to exterior walls — the standard size metric in residential appraisal.

New construction starting from a vacant or cleared lot, as opposed to renovation of an existing structure.

The safety system connecting electrical components to earth and to each other to clear faults.

The cementitious or epoxy filler between tiles, sealed against staining.

A block wall cell filled with concrete and rebar to create reinforced vertical columns within the wall.

A cost-plus contract capped at a maximum, blending transparency with price protection.

An uncommitted credit facility where the lender reviews and approves each project individually before advancing funds.

Channels along roof edges collecting rainwater and directing it to downspouts.

Code-required railings at stairs and elevated areas, with height and load requirements.

Fastening drywall panels to framing — the first phase of the drywall scope.

Direct construction costs — labor, materials, equipment, and site work — that physically build the project.

Towel bars, paper holders, and door stops — final punch-out items.

Solid or engineered wood flooring, nailed, glued, or floated.

A beam spanning over a door or window opening, carrying loads around the opening.

A system that both heats and cools by moving heat between indoors and outdoors — the standard Florida configuration.

The legally permissible, physically possible, financially feasible use that produces the highest property value.

A roof with all sides sloping down to the walls — more wind-resistant than gable roofs and favored by insurers.

The Home Mortgage Disclosure Act, requiring lenders to collect and report data on mortgage applications, including many construction-perm loans.

An agreement in which one party assumes liability for certain risks and agrees not to hold the other responsible.

A portion of a draw or the total loan retained by the lender until specific conditions are met, such as final inspection or lien releases.

Site improvements such as grading, roads, drainage, and utilities that prepare raw land for vertical construction.

An exterior water faucet, required to be frost-proof in freezing climates.

A weather-resistive barrier over sheathing that blocks water while letting vapor escape.

A percentage-of-value deductible applying to named-storm damage, common in Gulf and Atlantic coastal policies.

Deployable opening protection (panels, accordions, roll-downs) satisfying windborne debris requirements.

Metal connectors tying the roof to walls and walls to foundation, resisting wind uplift — required in high-wind zones.

Heating, ventilation, and air conditioning — the mechanical systems controlling indoor climate.

The indoor unit containing blower, coil, and filter that circulates conditioned air through ducts.

The outdoor unit component pressurizing refrigerant to reject heat and cool the building.

Installing ductwork, refrigerant lines, and equipment placement before walls are closed.

An engineered floor joist with flanges and a web, lighter and straighter than dimensional lumber.

Charges levied by local governments on new development to fund roads, schools, utilities, and other public infrastructure.

Laminated-glass windows rated to resist windborne debris, required or credited in Florida wind zones.

Valuation based on the income a property can generate, primarily used for rental and commercial properties.

A contract provision shifting responsibility for losses or claims from one party to another.

The per-inspection charge for progress verification, paid by the borrower directly or netted from draw proceeds.

The standardized document recording site conditions, percent complete by line item, photos, and inspector observations for a draw decision.

Materials that resist heat transfer through walls, roofs, and floors, improving efficiency and comfort.

Loan funds set aside at closing to cover interest payments during construction, so the borrower isn't making payments out of pocket mid-build.

The construction phase during which the borrower pays only interest on funds actually disbursed, not principal.

Pre-hung or slab doors installed after drywall, in hollow-core, solid-core, or panel styles.

Fencing, cameras, and material controls protecting against theft — a rising cost line in budgets.

A horizontal framing member supporting a floor or ceiling.

An enclosure where wiring connections are made, required to remain accessible.

The CFPB disclosure regime (Loan Estimate and Closing Disclosure) designed to make loan terms transparent before consummation.

A photographic layer over fiberboard core simulating wood or stone at low cost.

The value of borrower-owned land counted toward the equity requirement in a construction loan.

A method deriving land value by subtracting development costs and profit from projected completed value.

Modifying and beautifying outdoor areas with plants, sod, paths, and other features after finished grading — the last exterior line in most budgets and a common final-draw item.

The wait between ordering and delivery of materials — critical for windows, trusses, and appliances.

The highest drywall finish standard, with a skim coat over the entire surface for critical lighting.

The order in which claims against a property are paid; construction lenders record before work starts to keep first position.

A signed document in which a contractor or supplier gives up lien rights, usually in exchange for payment.

A pump station raising wastewater where gravity flow to the sewer isn't possible.

A draw method funding against percent complete of individual budget lines, offering finer control than milestone draws.

A structural member spanning openings in masonry walls, precast or poured in place.

The likely price under a forced or accelerated sale, typically well below market value.

A recorded notice of pending litigation affecting the property, clouding title until resolved.

The variable weight of occupants, furniture, and movable contents a structure must support.

A wall carrying structural weight from above, which cannot be removed without engineered support.

The requirement that undisbursed loan funds plus borrower equity always be sufficient to complete the project; shortfalls must be cured by the borrower.

An ongoing borrower obligation in the loan agreement — such as maintaining insurance or completing by a set date — whose breach can trigger default.

The complete collection of documents supporting a loan: application, underwriting, appraisal, closing docs, draws, and servicing records.

The ongoing management of a loan after closing: billing, payment processing, escrow, draw administration, and borrower communication.

The account holding undisbursed construction loan funds, drawn down as the lender approves each draw.

The ratio of the loan amount to the total project cost; lenders use LTC to size loans and set required borrower equity.

The ratio of the loan amount to the appraised value of the property, a core measure of lender risk exposure.

A product with extended delivery time that must be ordered early to protect the schedule.

The party designated to receive insurance proceeds, typically the lender for property coverage.

Financing for the purchase of land intended for future construction, often refinanced into the construction loan.

Glass with a low-emissivity coating reducing heat transfer and improving energy performance.

Data, security, audio, and doorbell wiring run separately from line-voltage circuits.

Laminated veneer lumber — layered engineered wood used for headers and beams.

Luxury vinyl plank — waterproof, wood-look vinyl flooring dominant in rentals and production homes.

A central distribution block feeding individual PEX lines to each fixture.

The engineering load calculation sizing HVAC equipment to the specific house rather than rules of thumb.

The most probable price a property should bring in a competitive, open market under fair sale conditions.

An inspection delivery model routing orders to a vetted network of independent inspectors rather than a fixed employee footprint.

Default occurring when the loan reaches maturity without payoff or conversion, even if all payments were made on time.

A statutory claim against property by contractors, subcontractors, or suppliers who furnished labor or materials and weren't paid.

Standing seam or panel roofing prized for wind resistance and longevity in coastal markets.

The enclosure housing the utility's electric meter on the service entrance.

A defined progress point (slab, dry-in, CO) used in scheduling and draw administration.

A draw schedule keyed to completion of defined construction stages (foundation, framing, dry-in) rather than percentage of budget lines.

A short permanent loan (typically 3–5 years) following construction, bridging to stabilization or long-term financing.

A ductless heat pump with wall-mounted indoor heads, used for additions and zoned spaces.

Bath glazing items typically installed in the final trim phase.

The startup phase of moving equipment, facilities, and crews onto the site.

A slab and thickened-edge footings poured in a single placement.

The recorded security instrument pledging real property as collateral for a loan.

The policy provision protecting the lender's interest and requiring notice before cancellation.

A builder's risk limitation excluding or restricting coverage for declared tropical storms and hurricanes.

The main structural post anchoring a stair railing at its ends and turns.

The recorded document (required in Florida) declaring construction has begun, setting lien priority and notice requirements.

In Florida, the notice a subcontractor or supplier must serve to preserve lien rights against the property owner.

The two liability policy triggers: coverage based on when the injury occurred versus when the claim is filed.

The spacing measurement between centers of framing members, e.g., studs at 16" OC.

The platform layer through which lenders request, route, track, and receive draw inspections from a fulfillment network.

Oriented strand board — engineered wood panels widely used for wall, roof, and floor sheathing.

Adherence to federal job-site safety standards covering falls, trenching, scaffolding, and PPE.

A property owner acting as their own general contractor, permitted with restrictions in most states.

A construction loan where the borrower acts as their own general contractor — higher risk and often subject to stricter draw controls.

The curved fitting under fixtures holding water that blocks sewer gas.

The final exterior seal coat protecting siding, trim, and joints from moisture intrusion.

A thin mortar coating over exposed concrete or masonry foundation walls for appearance and protection.

A waiver covering work or payment through a specific date or draw, preserving rights for later work.

A pricing model where the inspection cost is billed to the borrower without lender markup.

A surety's guarantee that subcontractors and suppliers will be paid, reducing lien exposure.

Self-adhering membrane underlayment providing a sealed secondary water barrier — a common Florida code and wind-mitigation upgrade.

A title policy provision limiting coverage to funds actually disbursed, increasing as draws are advanced.

Daily interest charged on outstanding loan balances, relevant when calculating payoff amounts or draw timing.

The inspector's assessment of how much of each budget line item is finished, used to calculate the maximum fundable draw amount.

A test of how quickly soil absorbs water, required for septic system design and permitting.

A surety's guarantee that the contractor will complete the project per contract; the surety steps in on default.

Official government authorizations for construction activities, ensuring code and zoning compliance.

An individual's promise to repay a business entity's loan if the entity defaults, standard in builder lending.

Cross-linked polyethylene tubing, the dominant flexible water supply piping in new residential work.

A foundation of isolated piers supporting beams that carry the floor structure.

Deep columns driven or drilled to transfer loads through weak soil to firmer strata — common in coastal construction.

The complete permitted drawing package: site, floor, elevations, structural, MEP, and details.

An appraisal of a not-yet-built home based on plans, specifications, and the cost breakdown, producing an as-completed value.

The standard method of framing one story at a time, with each floor serving as a platform for the next.

A drawing showing the building's placement on the lot with setbacks, drives, and utilities.

The functional endpoints of the plumbing system: sinks, toilets, tubs, showers, and faucets.

Installing supply, drain, waste, and vent piping before walls and slabs are closed.

Porcelain is denser, less absorbent, and more durable; ceramic is easier to cut and cheaper.

Temporary sanitary facilities required on active job sites.

Ongoing surveillance of a construction loan book for stalled projects, out-of-balance loans, expiring insurance, and maturity risk.

Quality control review of closed loan files to catch documentation defects, data errors, and compliance exceptions.

A construction loan for a home with an executed purchase contract in place before or during construction.

The early notice many states require from subs and suppliers as a prerequisite to filing a lien.

Sealing and finishing interior surfaces — typically one prime coat and two finish coats.

A payment to a contractor for work completed to date, typically verified by inspection before release.

The office-side manager handling budgets, contracts, procurement, and client communication.

The borrower's written promise to repay the loan under stated terms — the debt itself, secured by the mortgage.

The list of minor defects and unfinished items to be corrected before final completion and payment.

The final phase of correcting punch list items before closing and occupancy.

Systematic re-review of a sample of loans or inspections to measure defect rates and process reliability.

Manufactured stone countertops of resin and ground quartz — durable and nonporous.

The measure of a material's resistance to heat flow; higher R-values insulate better.

A sloped roof framing member cut and installed on site, the traditional alternative to trusses.

The inclined trim along the gable end of a roof, sealing and finishing the roof edge.

Steel reinforcing bars embedded in concrete to provide tensile strength.

A court-appointed third party taking control of a troubled project to preserve or complete it.

Can or wafer lights installed flush in ceilings.

The appraiser's weighing of the approaches to value to arrive at a single final opinion.

The insulated copper lines connecting the outdoor condenser to the indoor coil.

The grilles delivering supply air into rooms, adjustable for direction and flow.

The Truth in Lending regulation governing consumer credit disclosures, right of rescission, and billing practices.

Financing for renovation of an existing structure, with a repair budget disbursed in draws against completed work.

The period over which improvements are expected to continue contributing value.

The cost to build a functionally equivalent structure at current prices, used in the cost approach and insurance.

Insurance paying to rebuild at current construction costs without deducting depreciation.

The cost to build an exact replica of a structure, including obsolete features — distinct from replacement cost.

A recorded restriction on how property may be used or built upon, enforceable by neighbors or associations.

A percentage of each contractor payment (commonly 5–10%) withheld until project completion to ensure work is finished and defects corrected.

Engineered basins that hold or slow stormwater runoff from developed land.

A draw against a revolving builder credit facility, repaid as homes sell and made available again for new starts.

Request for information — the formal question-and-answer process clarifying plans during construction.

The horizontal member at the roof peak where rafters meet; a ridge beam is structural, a ridge board is not.

A vent along the roof peak exhausting attic heat and moisture as part of the ventilation system.

A consumer's three-business-day right to cancel certain loans secured by their principal dwelling, such as refinances — it generally does not apply to purchase or initial construction financing.

Non-metallic sheathed cable, the standard residential wiring method.

The nailing pattern securing sheathing to trusses — re-nailing is a common wind mitigation upgrade.

The slope of a roof expressed as vertical rise per 12 inches of horizontal run.

Initial earthmoving that brings the site to approximate elevations before construction.

A regulatory examination of a bank's financial condition and risk management, in which construction lending practices receive close scrutiny.

Valuation by comparing the subject to recent sales of similar properties, with adjustments for differences.

A small heat-session room built with moisture- and heat-resistant materials — an upgrade line item that inspectors verify like any other finish.

The written definition of exactly what work a contract covers — the reference point for disputes and changes.

Flexible caulked joints at dissimilar materials accommodating movement while keeping water out.

A sealed roof deck layer that keeps water out if the roof covering blows off — a wind mitigation credit in Florida.

A cut-through view revealing internal construction from foundation to roof.

Seasonal energy efficiency ratio — the cooling efficiency rating of air conditioners; higher is more efficient.

An on-site wastewater system of tank and drain field for properties without sewer access.

The standard order of operations from site work through punch-out that inspections are measured against.

The point where utility power enters the building, including meter and main disconnect.

A contractual commitment to performance standards, such as delivering inspection reports within a set number of business days.

The minimum required distance between a structure and property lines, streets, or wetlands.

The permitted connection of a property's sewer line to the municipal main.

A braced or sheathed wall designed to resist lateral wind and seismic forces.

Structural panels (plywood or OSB) fastened to framing to add rigidity and provide a nailing base for exterior finishes.

Overlapping roof covering elements of asphalt, wood, metal, or slate providing weather protection.

Fabrication-level drawings (trusses, cabinets, steel) prepared by suppliers for approval.

The waterproof base and membrane system beneath tiled showers — a critical inspection point.

Waterproof flashing under a window or door sill directing intruding water back out.

A temporary sediment barrier installed downslope of disturbed soil to keep runoff out of drains and waterways.

A loan structure combining construction and permanent financing in one closing, locking terms before construction begins.

The value of the land alone, as if vacant and available for its highest and best use.

Preparatory groundwork before building begins: clearing, grading, excavation, temporary utilities, and access roads.

A reinforced concrete floor poured directly on prepared ground, serving as both foundation and floor — standard in Florida.

The finished underside of a roof overhang, often vented to allow attic airflow.

Builder's risk extension covering additional interest, fees, and re-permitting costs after an insured loss delays the project.

Non-construction project costs such as architecture, engineering, permits, legal fees, insurance, and financing charges.

An engineer's analysis of soil bearing capacity and conditions, informing foundation design.

The distance a structural member crosses between supports.

The principle that an owner implicitly warrants its plans and specifications are buildable, shifting design-defect risk off the contractor.

A construction loan for a home built on speculation, without a committed end buyer, underwritten primarily on the builder and market.

The written standards for materials, products, and workmanship that accompany the drawings.

Expanding foam that insulates and air-seals in one application; open-cell and closed-cell types.

An automatic fire suppression system, required in some residential and most commercial occupancies.

The horizontal steps (treads) and vertical boards between them (risers), governed by code dimensions.

A loan with no draw activity for an extended period — an early warning sign of a stalled or troubled project.

Metal roofing with raised interlocking seams and concealed fasteners.

The absolute deadline for construction defect claims, running from completion regardless of when the defect is discovered.

Cold-formed steel studs and track used instead of wood, common in commercial and coastal work.

A short foundation wall rising from the footing to support the floor structure above grade.

Thin natural or manufactured stone cladding applied for appearance at reduced weight and cost.

In some states, a claim served on the lender that traps undisbursed loan funds for unpaid subcontractors.

An official order halting construction due to violations, permit issues, or safety hazards.

Materials purchased and delivered to the site (or a bonded warehouse) but not yet installed; lenders vary on whether and how they fund them.

The permitted system of grading, drains, and basins controlling runoff from a developed site.

A cement-sand-lime plaster applied in layers over lath or block, the dominant Florida exterior finish.

A vertical framing member in a wall, typically spaced 16 or 24 inches on center.

A trade specialist (plumber, electrician, framer) hired by the GC for a defined scope.

The structural panel layer over floor joists that supports finish flooring.

An appraisal made subject to completion of proposed construction or repairs, with value conditioned on that completion.

Product data, samples, or shop drawings submitted for approval before ordering or installation.

A recorded agreement placing one lien behind another, such as a seller-held lot loan behind the construction mortgage.

An insurer's right to pursue the party responsible for a loss it paid; waivers of subrogation are common in construction contracts.

The stage when the project is usable for its intended purpose despite minor remaining items, triggering warranty and payment milestones.

The GC's on-site manager directing daily field operations and coordinating trades.

The two sides of air distribution: supply delivers conditioned air; return carries it back to the air handler.

The company issuing bonds that guarantee a contractor's performance or payment obligations.

Professional measurement and mapping of land, boundaries, and improvements for design, construction, and title purposes.

A shallow graded channel that directs stormwater away from structures.

Value contributed through the borrower's own labor; most lenders limit or exclude it from equity calculations because it's hard to verify.

The authoritative platform where official loan data lives; other tools must reconcile to it.

A permanent lender's binding agreement to pay off the construction loan at completion, reducing the construction lender's exit risk.

An on-demand unit heating water as it flows, eliminating standby tank losses.

Embedding tape and applying joint compound over seams and fasteners to create a seamless surface.

The precise field measurement of cabinets used to fabricate countertops.

Conditional permission to occupy while minor items are completed.

The utility-connected pole providing job-site electricity during construction.

Soil treatment applied before the slab pour to prevent subterranean termite intrusion, required in many southern jurisdictions.

Applied drywall surface patterns such as knockdown, orange peel, or smooth finish.

The cement-based adhesive mortar bonding tile to the substrate.

The operational, compliance, and reputational risk a lender assumes through outsourced service providers, subject to regulatory guidance.

Traditional stucco applied as scratch, brown, and finish coats over lath.

A reinforced concrete beam cast atop block walls that ties the wall together and anchors the roof structure.

Ceramic or porcelain tile set in thinset mortar over a suitable substrate.

Concrete or clay tile roofing common in Florida, heavy but durable and wind-resistant when properly attached.

Casting concrete wall panels flat on site and tilting them into place — common in commercial construction.

The title insurer's binding offer to issue a policy, listing requirements and exceptions to coverage.

A matter excluded from title coverage, such as easements, restrictions, or existing liens.

A policy protecting the lender or owner against defects in title, such as unknown liens or ownership disputes.

A title search refresh before each draw confirming no new liens have attached since the last disbursement.

Air conditioning capacity measurement; one ton equals 12,000 BTU/hour of cooling.

The horizontal members at the top and bottom of a framed wall to which studs attach.

The second plumbing phase completing in-wall piping through the roof vents, inspected before drywall.

A survey mapping elevations and features of the land, used for grading and drainage design.

The trim piece bridging different flooring materials at doorways.

The TILA-RESPA Integrated Disclosure rule governing loan estimates and closing disclosures on most consumer mortgage loans, including consumer construction loans.

Decorative moldings — baseboards, casing, crown — framing transitions and openings.

Prefabricated triangulated roof or floor structures that span long distances and transfer loads to exterior walls.

The elapsed time from inspection order to delivered report — a core service-level metric in draw operations.

A structure using a separate construction loan and permanent mortgage, requiring two closings and two sets of fees.

A check made payable jointly to the borrower and contractor, requiring both endorsements to reduce misapplication of funds.

Coverage sitting above primary liability limits, providing additional protection for large claims.

A waiver effective immediately upon signing regardless of payment status — safer for the paying party.

Water, sewer, electric, and gas services trenched and installed below grade during site work.

The water-resistant layer (felt or synthetic) installed over roof sheathing beneath the finish roofing.

The remaining loan balance not yet released; lenders monitor undisbursed funds against cost-to-complete to confirm the loan can finish the project.

The wind force that tries to lift the roof off a structure, resisted by straps and anchorage.

Uniform Standards of Professional Appraisal Practice — the ethical and performance rules governing appraisers.

A policy provision reducing or voiding coverage if the property is vacant beyond a stated period — a risk on stalled projects.

The internal angle where two roof planes meet, channeling concentrated water flow.

Systematic substitution of lower-cost methods or materials that preserve function and quality.

Bathroom cabinets integrating a sink with storage below.

A plastic membrane under the slab blocking ground moisture from migrating into the building.

Official permission to deviate from a specific zoning requirement, granted after a hearing process.

The oversight framework for third-party providers — inspectors, appraisers, title agents — covering due diligence, contracts, and performance monitoring.

Controlled introduction of outdoor air and exhaust of stale air for indoor air quality.

The building phase above the foundation — the structure itself — as distinguished from horizontal site development.

PVC exterior cladding valued for low cost and low maintenance.

A disbursement system where contractors submit vouchers for completed work, which are verified before payment is released.

Decorative wall paneling on the lower portion of a wall.

The post-completion period during which the builder must correct defects, commonly one year workmanship.

The internal roster of loans showing early signs of weakness, reviewed regularly by credit administration.

The tank or tankless appliance producing domestic hot water.

The utility device measuring water consumption for billing.

Pressurized piping (PEX, CPVC, or copper) delivering hot and cold water to fixtures.

The code-required drainage layer behind cladding — house wrap, felt, or integrated sheathing systems.

The flashing at the base of stucco walls letting trapped water drain out.

A drilled water source with casing and pump serving properties without municipal water.

The design pressure a structure must resist from wind, set by code based on location and exposure.

An inspection documenting wind-resistant features (straps, deck attachment, SWR) that earn insurance discounts.

Code-mapped areas where openings must be impact-rated or protected due to hurricane exposure.

The frame set into a block wall opening to which the window attaches.

Wind peril coverage, often separately deductible or separately written in coastal states like Florida.

Statutorily required coverage for employee injuries on the job; lenders verify contractors carry it.

Local regulations governing land use, density, and building types allowed on a parcel.

Interagency supervisory thresholds flagging banks whose construction loans exceed 100% of total risk-based capital, or whose total CRE exceeds 300% with rapid growth — triggering enhanced risk-management expectations.

Single-layer asphalt shingles cut into three tabs — the economy roofing option.