Quote:
Originally Posted by Vlajos
Not to nit pick too much, but the Construction Lenders don't disburse all the funds into escrow at closing. That would be a colossal waste of money in terms of interest carrying costs. The Developer would not want that either. The Bank (or Bank syndication) disburse (to escrow at the title company) on a draw by draw basis, while monitoring construction. The Lender very likely requires all equity (or mezzanine financing potentially) be disbursed prior to their funds though.
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^ Really?
This would suggest that lenders could still back out mid-construction and leave a project hanging. Even with a contractual obligation, it's certainly possible.
Wouldn't that create a lot of uncertainty?