Overview
Construction debt is the most operationally intense product in CRE. The draw schedule, lien-waiver mechanic, completion-guaranty burn-off, and takeout structure each shape sponsor experience and cost over the build cycle. This hub aggregates the construction handbook, draw schedule template, sibling Q&As, and glossary terms.
Why this matters
Construction loans fund incrementally, 12 to 30 monthly draws, with mini-credit-events at every cycle. Operational intensity is not optional; sponsors with thin staffing experience delays at every monthly draw.
Three layers of guaranty exposure (completion, carry, standard non-recourse carve-outs) typically remain in place through substantial completion. Burn-off mechanics control how long personal exposure lasts.
How to use this hub
Start with the construction handbook for the framework. Use the draw schedule template before closing to design the line-item structure. Drop into the Q&A library for specific clauses or mechanics. Reach the glossary for terminology like lien waiver, retainage, and HVCRE.
Pillar guide
Sponsor-side tool
Sibling Q&As
How should a sponsor design the draw schedule on a CRE construction loan?
Design a CRE construction draw schedule that minimizes carry, aligns with the GC's billing cycle, and survives lender inspector scrutiny, line-item logic.
What is the difference between conditional and unconditional lien waivers on a CRE construction draw?
Conditional lien waivers are exchanged for the current draw and become effective only when payment clears; unconditional waivers are unconditional.
How does a completion guaranty burn off on a CRE construction loan?
Completion guaranty: burns off at substantial completion, typically defined as certificate of occupancy issued, lien-free completion certificate delivered by the architect, and the GC's final waivers received.
What is the HVCRE exemption and how does a sponsor qualify on a construction loan?
HVCRE rules require banks to hold higher capital against high-volatility CRE construction loans unless the loan qualifies for the HVCRE-ADC exemption, meeting.
What is the difference between a mini-perm, a construction-to-perm, and a two-close permanent takeout?
Mini-perm: a 12- to 36-month extension at the construction lender at construction-loan pricing while the project stabilizes.
Glossary
Construction financing from the first draw to repayment
Financing for commercial development, with attention to the budget, draw process, guarantees and permanent loan or sale.
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