VA One-Time Close Draws: The Inspection-Approval-Lien Chain Explained
The Chain Nobody Skips
If you're deep enough into VA one-time close construction financing to be reading this, you've probably already heard the term "draw schedule" thrown around loosely. What doesn't get explained clearly enough is the actual chain of custody on that money, and it's a fixed sequence with no shortcuts: phase completion, lender-ordered inspection, borrower written approval, lien releases, then disbursement.
Why The Inspection Comes Before Anything Else
The lender doesn't take the builder's word that a phase is finished. An independent inspection gets ordered to verify the work matches what was scoped for that draw. This isn't a formality, it's the checkpoint that protects both the lender's collateral position and your equity in the property. No inspection, no draw moves forward, regardless of how far along the builder says they are.
Your Signature Is The Second Gate
After inspection confirms the phase is done, you review and approve in writing. This is the part that surprises a lot of first-time VA construction borrowers, like the archetype of a veteran we'll call Scarlett, who assumed the builder had more control over draw timing than she did. She didn't realize her written sign-off was a required gate until she saw the schedule laid out. It isn't optional and it isn't a rubber stamp; it's your checkpoint in the process.
Lien Releases: The Part People Forget
Here's the piece that gets skipped in casual explanations. Funds don't release just because you approved the phase. Lien releases have to be provided at each draw too. This is what stops a subcontractor from later filing a claim against the property for unpaid work on a phase that was already funded. Per VA guidance:
"Typical VA one-time close builds fund through staged draws of roughly 15-35% each, released after lender-ordered inspection and with lien releases provided at each draw."
How Many Draws Should You Expect
Most builds run four to six draws total, each generally staged somewhere in that 15 to 35 percent range depending on the phase and the builder's contract structure. That's the baseline. Some lenders add their own documentation requirements on top of VA minimums, so the exact number and process can vary by lender. Ask for specifics before your contract is signed.
The One Move That Prevents Mid-Build Disputes
Get the projected draw calendar in writing before breaking ground. Not a verbal estimate, an actual document showing expected draw count, rough percentages, and what triggers each release. That single step removes most of the confusion that derails builds partway through.
If you're navigating a VA construction build and want the draw process laid out clearly before you sign, call 843-569-7283. I'm Jason Sharon with Home Loans Inc.
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