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(The
time at which the house is constructed.
During construction, money is disbursed
to the borrower(s) and builder to fund
the building process until completion)
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General Contractor Deposit Money -
Money payable to the builder (General
Contractor) before construction has
begun. This money is used as start-up
money and working capital for the
builder. Any deposit of this kind
may be available at initial closing.
If applicable, this deposit is shown
on the disbursement schedule. Not
all builders are eligible.
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Reimbursement for Borrower Deposit
- Money payable to reimburse the
borrower for any monies paid out of
pocket prior to the start of construction.
Not all borrowers are eligible for
reimbursement. Sufficient equity and
approval from the construction department
is required to obtain reimbursement.
Borrowers must provide sufficient
proof of deposits paid to Preferred Capital Mortgage Services
and/or contractors in order for reimbursement.
For example, canceled checks and paid
invoices.
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Draw Request - Upon completion
of the required draw items, either
the borrower or builder may order
an inspection via email at Construction@bankahb.com
or by phone at 877-226-5242 to request
funds.
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Inspections - A
property inspection occurs prior to
the release of funds. The original appraiser
or certified inspector performs periodic
inspections to determine that work
is progressing according to the disbursement
schedule. When the inspection is received,
the lender releases funds based on
the inspector's assessment. If the
items within the requested draw are
not completed, a partial disbursement
based on the inspector's recommendation
and the approval of the Construction
Department may be released.
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Draw Checks - Payment for work
completed based on an inspection report.
The checks are sent to the borrower(s)
and made co-payable to both the borrower(s)
and the builder. Our standard policy
is to send out these checks via overnight
courier. **Please note: The borrower's
account must be current in order for
the draw check to be disbursed.**
- Interest Only payments During
Construction - During the construction
phase, the borrower(s) are required
to make interest only payments to
American Home Bank based on the monthly
outstanding balance of their construction
loan. A borrower may elect to participate
in American Home Bank's "NO
INTEREST DURING CONSTRUCTION"
program prior to initial settlement.
Sufficient equity is required to set
up the no interest account. **Please
ask your loan officer for details.
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Lien Search - A title search performed
at each draw to insure the lender
that no liens have been placed on
the property since initial settlement.
This step is only required if applicable
in the borrower(s) particular state.
- Building Permit - We require
a building permit at the time of initial
closing. If a permit has not been
issued at that time, the borrower(s)
or builder are required to submit
it to as soon as it becomes available.
We will not disburse funds after settlement until a
building permit is received.
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