If you haven't heard enough irony....

Yesterday I closed on a construction loan to build my homestead. During the closing I was told that before we could request a draw, we have to have bought and installed the items for which we wish to get the money. For example, to get reimbursed for windows, I have to purchase and install the windows with other funds. So basically, since I do not have the money to prebuy everything, I now need a loan so I can use my construction loan. The bank said, its not a big deal....  general contractors a lot of times have a line of credit. Well guess what. Mine does not. Additionally, my general is doing this build for next to nothing, so I can't possibly ask him to bankroll this project for me. In what galaxy is this normal? It certainly wasn't normal the first time I built a house. Perhaps this is the  "new normal" everyone's been talking about.

That seems crazy!

Definitely crazy. They even send a bank employee to the build site to verify the item is installed before they will cut a check.

That's completely bonkers. What the hell kind of sense does that make?

Trying to develop a creative strategy.... Thinking of having my general bring my loan draw schedule and proof of approved loan to the lumber company to see if they will give a 30 to 60 day credit period.

My Not for profit was once investigated by the state for not spending the money they hadn’t given us.  

Is there another bank you could deal with instead?
I just took on debt to buy a car ( sigh) but I was able to lower my rate by having a loan already in my pocket.

What does your general contractor tell you?

You got a loan so why expect the general contractor to bankroll this?

What does your banker say you can use the money for?

Yeah, construction loans are kind of funny.

They do not pay out a lump sum upfront but rather disperse in stages as qualifying stages of construction happen. The bank has an interest in making sure they won't be out a chunk of money if the loan is not actually spent appropriately so the requirements appear to reflect that.

Hi Timothy,

Indeed. I knew someone who received a $35,000.00 lump sum loan in about 1984.  Maybe 1/2 of it made it into his house.

The best part of Permies is the people we meet and the shared goals we all have.

Cherish the people your meet here. They "get" you. And they have your back.

Not too many people outside of here will appreciate your wanting to add rainwater catchment to your house, or will understand your desire to add a vermicomposting outdoor toilet. I, for one, am glad to have people in my life that don't think I'm insane for wanting nice things like worm farms.

I feel supported by my friends today.