Draw Processing

Last updated: December 11, 2024

This guide details how Draw Processing works for your OfferMarket Fix and Rent loan. To ensure a smooth experience with your draw processing, please review this guide and let us know if you have any questions or concerns.

Construction Holdback

Your Fix and Rent loan has the following components:

• Initial advance -- this is the amount that was wired to the title company or attorney on your settlement date, net of lender fees. If your loan was a purchase transaction, we often refer to this as the "purchase component" of your loan.
• Construction holdback -- this is the amount that is reserved to be disbursed based on your verifiable progress against your Scope of Work. We often refer to this as the "rehab component" of your loan.

Construction Holdback Rate

For most Fix and Rent loans, the construction holdback is 100% of your rehab budget as confirmed in your Scope of Work. In certain scenarios (i.e. your preference or loan limits based on ARV and LTC) our construction holdback may be less than your rehab budget in your Scope of Work.

For example, let's say you have a $100,000 rehab budget but your loan to after-repair value ("LTARV") is at our program limit (typically 70%) with a construction holdback of $90,000. In this scenario, your construction holdback rate is 90% (construction holdback ÷ rehab budget).

Let's say you completed $10,000 worth of the rehab budget in your Scope of Work and you submit a draw request. We will review and then wire $9,000 ($10,000 x 90% construction holdback rate) less our draw fee.

By the time we have verified that your Scope of Work is 100% complete, you will have received $90,000 worth of draw reimbursements, less draw fees.

Post-Closing Email To Initiate Draw Processing

Once your loan is moved to FUNDED status, a member of our Post-Closing team will configure your loan file for draw processing. Your loan will be moved to DRAW status and you will receive an email containing the following instructions:

Subject: Loan File | {Subject Property Address}

You have a rehab component of your loan ("construction holdback") in the amount of ${Construction Holdback} available which we fund to you based on completed work against your Scope of Work.

Draw Requests

To request a draw, email this thread. We will then reply with a draw-specific % completed form that you fill out to let us know the % completed of specific line items in your Scope of Work.

Be sure to click the 'SUBMIT' button!

Once the % completed form is submitted, we will send you a Truepic link (geo-location photo app). You or a member of your team can then take photos of the exterior (1 photo of each corner of the property) and interior (2 pictures of each room from opposing corners). Once your pictures are submitted via Truepic, our draws team will review and wire funds, typically within 1 business day.

Note: on your first draw request, we will also send you our Wire Authorization Form to confirm which bank account we should wire to. Be sure to enter the correct account holder name. If it is a business bank account, it should be the name of your business. If it isa. personal bank account, it should be your name.

SOW Revisions

If you would like to move funds from one section of your SOW to another, please email this thread and we will provide you with a link to edit your SOW. Once a SOW revision is requested, it needs to be submitted and approved in order to proceed with your next draw request.

Note:

• We strongly prefer revisions to be made to sections that currently have 0% completed
• When moving funds between sections, the total rehab budget must remain -- we cannot add to or reduce from the amount of this component of your loan

Step-by-step draw process

1. Email your loan file to request a draw (subject: 'Loan File | {Subject Property Address}') -- if there is any delay, feel free to text our client service line at 443-492-9941.
2. Complete the Draw-Specific % Completed Form that we email to you
3. Snap photos via Truepic app we email/text to you
4. Receive draw report and wire

Frequently Asked Questions

How long does the draw process take?

From draw request to receipt of your draw wire it typically takes 1-2 business days though it is possible for the process to be completed same day.

Do I need to provide invoices or receipts?

For hard costs (i.e. labor and materials) -- invoices are not required and rarely requested by our draw review team. For soft costs (i.e. plans, permits) -- invoices or receipts are required.

For completed progress that is visually unverifiable (i.e. plumbing work that we cannot see because the drywall was already installed), we will ask for invoices or receipts.

What is the fee per draw?

The draw fee is $300 which includes wire fee.

Is there a limit to the amount funded per draw?

No. There is no dollar limit per draw up to your remaining construction holdback. Some clients request one draw at the end of their rehab project and receive 100% of their construction holdback. Other clients request draws for low incremental project progress and low wire amounts.

Can I appeal a draw?

Yes. You will receive a draw report for each draw and you can email your Loan File email thread to raise any concerns about progress that may have been overlooked.