Unlike an existing home loan, your construction funds are disbursed during the construction phase as the construction of your new home progresses. These payments are called draws or disbursements. Lenders will disburse construction funds based on the amount of work that as been completed on your project.

If, for example, your construction budget is $100,000 and your project is 10% completed (as indicated by a third-party inspector), you will be eligible for a disbursement of $10,000 for that portion of the project.