June 16, 2016

Construction – Progress Draw Mortgage


A Construction or Progress Draw mortgage advances funds in intervals as the house is being built. Depending on the lender, there are are typically 3-4 draws at predetermined milestones of the project (some lenders also allow an additional, up front Land Draw to help purchase the property as part of the same financing). An appraisal is required at each stage to validate progress before funds will be released. Interest is paid on funds advanced.

Draw Schedule – example

While milestones vary from lender to lender, below is one example:


1st draw – Backfill
project 16% complete, includes excavation, foundation, and backfill


2nd draw – Lock-up
project 40% complete, includes doors windows, framing, seething, roof, rough plumbing and electrical, insulation, rough heating


3rd draw – Drywall
project 70% complete, includes basement floor, drywall, heating, exterior finishing


4th draw Completion
project 100% complete, including floor coverings finished carpentry, painting, landscaping


Typical Documentation Requirements:

  • Standard income verification (ex. job letter, income confirmation)
  • Proof of down payment or equity
  • Cost estimates, including copies of all quotes (if self-build)
  • Signed contract with builder
  • Offer to purchase for land or proof of title
  • Full appraisal (the lender may want to order the appraisal directly)
  • Building plans / specifications
  • Fire Insurance Certificate
  • Third party warranty information, if applicable

Do you have a dream home or development project in mind?

Let’s chat today! Call me (Tim) at 250.550.8272 or use the contact form on this page.


“Tim… helped us secure an extremely difficult mortgage. He was with us every step of the way and now our dreams of owning a large piece of land and building our own house have come true! Thank you Tim!” – M&K Higgs, Vernon, BC