Frequently Asked Questions About Construction Loans

Who is my primary contact during the construction process?
Once your loan is approved, a Construction Loan Administrator (CLA) will be assigned to manage the draw process. The CLA is available to answer any questions you many have, and will aid you and your builder in the scheduling of inspections and the disbursement of funds.

What is the draw schedule?
The draw schedule details the amount of funds available to be disbursed and the necessary requirements to be met throughout the construction process.

How does the draw process work?
Upon request of an advance of funds, we will order an inspection. Upon verification of work completed, we will disburse funds in accordance with the draw schedule.

What is the standard method of disbursing funds?
We will deposit funds into your Sandy Spring Bank checking account. For any other method of disbursement you will be charged a $15 fee per advance.

What is required prior to the first draw?
Prior to the disbursement of funds, you will need to provide a copy of the building permit, wall check survey, well log (if applicable), and hazard/builders risk insurance.

Can funds be re-advanced?
No. You may make principal reductions at any time, but those funds will not be re-advanced later.

What if my home is not complete and my loan has matured?
You will receive a notice 45 days prior to maturity. At that time, if construction is not completed a loan extension may be required. Contact your CLA for terms and conditions.

What if the scope of my project changes during construction?
Notify your CLA immediately if there are changes to your contract, cost, plans, or specifications.

How are payments calculated?
Payments are interest only based on the outstanding balance, and are due monthly. A bill is mailed to you 15 days before the payment is due. Payments may be deducted automatically from your Sandy Spring checking account or an account at another financial institution.

My current home is additional collateral on the loan. When I sell my current home, how does the lien get released?
When your current home goes under contract, have the settlement attorney contact your CLA and provide lien release information. Your CLA and settlement attorney will coordinate releasing the lien.