Project Review
Project Review is usually done concurrently with the underwriter’s review of Borrower’s income, assets, credit and liabilities. This process involves a highly training project review specialist experienced with reviewing building plan, the construction budget, appraisal report and completing an analysis to ensure that there are no missing budget items and that the project can be completed for the amount budgeted.
You and the builder will find great value is the lender identifying and adjusting for any budget deficiencies before construction begins. Once the budget is set and the loan has funded, any changes will need to be paid out-of-pocket by the owner or builder, not added to the loan amount.
If a Builder has left out a few bath fixtures or an interior door, light switches or some molding, you may end up in a dispute with the builder that unnecessarily added tension. Even the lender’s review may miss some smaller items, but it is the large items they are likely to catch; cabinets, flooring, roofing materials and windows among others.
Again, once the loan documents have been signed and the loan recorded, the loan amount can very rarely be changed. Whenever possible a loan contingency line item should be added to the budget, specifically designed to cover those few items that get missed and yet can be paid for through a loan draw not the borrower out-of-pocket.