If land is being purchased with the loan, funds (up to your maximum allowable LTV/LTC) are distributed at the closing. The construction portion of the loan, however, is not disbursed at the loan closing. Instead, the funds are provided via draws. Once a portion of the construction work has been completed, the borrower submits a draw request. We send an inspector to verify the work. Draw funds are wired to you for completed work verified by the inspector.
For loans where the land is already owned by the borrower, funds towards the refinance or cash-out (up to your maximum allowable LTV) are distributed at the closing. Construction funds are distributed via draws.