A draw request on a construction loan should be accompanied by all of the following EXCEPT:

• A. Change orders
• B. Inspection reports
• C. Lien releases from subcontractors
• D. Expenses from similar contracts

Answer: (D)

In a construction loan, the draw request is funded only when there is verified progress and proper documentation tying the funds to the specific project. The goal is to confirm that work actually completed, changes have been authorized, and there are no outstanding claims against the project.

Change orders are essential because they show any approved modifications to the original scope, price, or schedule. This ensures the lender is paying for work that the borrower and contractor have agreed to and that the disbursement aligns with the updated plan.

Inspection reports provide an independent or lender-required check that the claimed progress matches what has been built. They help verify that the work specified for the draw is physically present and acceptable for payment.

Lien releases from subcontractors are important to protect the lender from future claims. When funds are disbursed, having lien waivers ensures that those who supplied labor or materials for the current draw are releasing their potential lien rights for the amounts paid, reducing the lender’s risk of liens against the project.

Expenses from similar contracts do not demonstrate progress on the current project or relate to the specific work being funded. They don’t prove that the current draw corresponds to work completed in this construction, so they are not required with a draw request.