Lenders, let’s be frank for a moment: Do you know the true construction draw process turn times on your construction loans?
Even seasoned construction lenders are not immune to these risks. Lenders who have originated construction loans for years can still miss things that could potentially be disastrous. To help you cover your bases, we have compiled three risks for lenders to look out for: one is obvious, one is less so, and the last is a hidden risk.
Contractor acceptance is a key component to construction lending, but unfortunately it is often overlooked or neglected. Lenders must understand the concept and process of contractor acceptance to successfully build and maintain an acceptance process. This includes understanding the benefits of these programs, the different types of referrals requested, important red-flags that may be encountered, the importance of a risk management policy, as well as an important tool that can help streamline a contractor acceptance workflow.