Draw Mortgage

Definition

• A payment, made periodically, to a construction contractor or subcontractor as work progresses. A draw is part of a construction mortgage.

Notes
See Progress Advance Mortgage (PAM).

Synonyms
draw loan, advanced as needed, progress draw construction mortgage, progress draw mortgage

Acronyms
DM

Related Terms and Acronyms

• Commercial Loan — Definition,
  • A loan taken out by a business.
• Construction Loan — Definition,
  • A short-term interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
• Contractor — Definition,
  • One who constructs or oversees construction of a house or a large renovation.
  • Someone that agrees to furnish materials or perform services at a specified price.
• Custom Builder — Definition,
  • A contractor that constructs or remodels houses based on plans submitted by the client.
• General Contractor — Definition,
  • The person or company that performs work on a construction project, hires subcontractors and suppliers, or both.
• Interim Financing — Definition,
  • The availability of funds on a daily basis to assist a developer with financing for a construction project between advances made by the lender of the construction loan.
• Land Draw — Definition,
  • A construction loan backed by the value of the land.
• Subcontractor — Definition,
  • A person or company that does specialty work for a general contractor.