Construction draws, maturity dates, and where builder files get stuck

A construction loan doesn’t fund at once. Money is released in stages against work completed. You request a draw, an inspector verifies percent complete, the lender releases funds, and you pay subs. Repeat until the house is finished.

The mechanic is sound. The problem is turnaround. A draw process that takes weeks instead of days means subs waiting on money, and subs who wait go work for someone else. That shows up as schedule slippage, which shows up as carrying cost.

Every construction loan has a maturity or a conversion date. That date, not the day the house is finished, is the real deadline. Everything else (whether a spec sells in time, whether a takeout is arranged, whether you have leverage), is measured against it.

The builders who get squeezed are almost never surprised by the maturity date. They just started thinking about it too close to it.

Duplex-to-fourplex infill and small build-to-rent projects fall in a genuine gap: too small for a bank’s commercial desk to bother with, and too unusual (ground-up, multiple doors), for a typical rental lender’s box. Developers in this range often assume no one will look at the deal. It’s a real gap, not a reflection of the project.