A new construction mortgage draw schedule is the timetable that releases your loan money to the builder in stages as each phase of the home passes inspection, not in one lump sum at closing. That one fact shapes everything else: when your builder gets paid, how much interest you owe each month, and how a failed inspection can stall a job. This explainer walks through how draws work on a Valley build, which loan structures use them, what you pay while the house goes up, and the math on a sample Augusta County project. Duane Buziak builds the schedule with buyers before the first shovel hits the ground, because most draw problems are planning problems.
Why Draw Schedules Matter on Valley Lots in Augusta and Rockingham Counties
Suppose you own a two-acre lot in Fort Defiance in Augusta County, or you are under contract on a Bridgewater-area lot in Rockingham County. You have a builder, a plan, and a contract price. The bank account the builder expects to draw from does not exist yet, because the house it is meant to pay for does not exist yet. A draw schedule solves that by tying each release of money to finished work.
Valley building activity is tracked publicly. The U.S. Census Bureau publishes monthly permit counts by county through its Building Permits Survey, and it is worth checking the Augusta and Rockingham figures before you assume builders in your area have open schedules.
Here are the terms you will see in your loan documents:
- Draw: a release of loan funds to the builder for completed work.
- Draw request: the builder’s written ask for that release, tied to a phase of the contract.
- Draw inspection: a third-party check that the work is actually done.
- Retainage: a slice of each payment held back until the job is finished, as leverage for completion.
- Interest-only period: the build phase, when you pay interest only on the amount drawn so far.
- Construction-to-permanent (single-close) loan: one closing that covers the build and then converts to a standard mortgage.
- End loan: the permanent mortgage that remains after construction ends.
The common misconception is that the builder receives the full loan at closing. The builder does not. Funds follow completed work, which protects you from paying for a house that is half finished and protects the lien position of whoever is financing it.
This article is written by Duane Buziak, NMLS #1110647, Coast2Coast Mortgage LLC NMLS #376205, an independent mortgage broker serving the Shenandoah Valley and Blue Ridge corridor.
A Typical New Construction Mortgage Draw Schedule, Foundation to Final Inspection
Each draw runs through the same cycle, though the exact sequence and timing vary by program and by the party servicing the construction account:
- The builder finishes a phase and submits a draw request.
- An inspector or appraiser visits the site and confirms the work matches the request.
- Lien waivers are collected from the builder and major subcontractors, and the title company updates its search to confirm no new liens have been filed.
- Funds are released to the builder, usually by check or wire.
The percentages below are an illustrative example only. Your real schedule comes from your builder contract and your loan documents.
- Site and foundation: 20%
- Framing: 25%
- Mechanical rough-ins (plumbing, electrical, HVAC): 20%
- Drywall and interior: 20%
- Final completion and certificate of occupancy: 15%
The back-loaded final draw is deliberate. It is the builder’s incentive to finish punch-list items and pass the final inspection.
Where schedules stall
Four problems cause most delays:
- Failed inspections: a framing issue or missing permit sign-off holds the draw until it is corrected and reinspected.
- Missing lien waivers: one subcontractor who has not signed can freeze a release.
- Weather: a wet spring in the Valley can push foundation and site work back by weeks.
- Change orders: upgrades you add midstream, such as a bigger garage or a different kitchen, fall outside the approved budget and usually must be paid in cash or through a revised loan.
A contingency reserve softens all of this. Many buyers set aside a cushion on top of the contract price so overruns and change orders do not force a stop in work.
One more check matters for smaller builders. The builder’s payment schedule to subcontractors and suppliers must line up with the loan’s draw schedule. If the contract has the builder paying for framing lumber upfront and the loan only releases money after framing is complete, a small Valley builder can run into a cash-flow gap even though the project is healthy. Compare the two documents before you sign either.
Loan Programs That Use Draws: USDA, VA, FHA and Conventional Options
Draw-based financing shows up in four main program families. Rules differ by participating lender, so Duane Buziak confirms each program’s current terms as of October 2026 before recommending one.
USDA
USDA zero down is accurate: eligible buyers can finance a home with $0 down. For construction, USDA guaranteed financing is typically structured as a single-close construction-to-permanent loan, and individual lenders set their own overlays. The property must sit in an eligible area. Check the specific address on the USDA property eligibility map, then confirm that your household income falls under the limit for your county. Income limits are published by household size and differ by county, so verify the current figures for Rockingham, Augusta, Shenandoah, Warren, Page, and Frederick on the USDA site as of October 2026 rather than relying on a number from memory.
VA
VA-guaranteed loans can be used for new construction, but many providers choose not to offer construction-to-perm VA products. Eligible veterans should review the program basics at VA.gov home loans and expect that finding a willing provider is the real hurdle.
FHA
FHA One-Time Close is a single-close construction-to-permanent option with a low minimum down payment, 3.5% on the permanent loan for eligible borrowers. Underwriting standards, builder requirements, and mortgage insurance apply.
Conventional and jumbo
Conventional construction-to-perm loans are available for buyers with stronger credit and more down payment. The 2026 conforming loan limit is $806,500, and the high-cost limit is $1,249,125, per the Federal Housing Finance Agency. Larger builds above those thresholds move into jumbo financing.
Because Duane Buziak is a broker, not tied to one company’s menu, he can compare these structures side by side. NoTouch Credit Pull lets him review a buyer’s likely options before any hard inquiry touches their credit.
Worked Example: A $285,000 Augusta County Build, Draw by Draw
Suppose a buyer builds a home in Augusta County with a total construction loan of $285,000. Interest-only payments during the build apply only to the drawn balance. The 7.00% rate below is hypothetical, and current rates will differ as of October 2026.
- Draw 1, site and foundation: $57,000 (20%). Balance $57,000. Monthly interest: $57,000 × 0.07 ÷ 12 = $332.50.
- Draw 2, framing: $71,250 (25%). Balance $128,250. Monthly interest: $748.13.
- Draw 3, mechanical rough-ins: $57,000 (20%). Balance $185,250. Monthly interest: $1,080.63.
- Draw 4, drywall and interior: $57,000 (20%). Balance $242,250. Monthly interest: $1,413.13.
- Draw 5, final completion: $42,750 (15%). Balance $285,000. Monthly interest: $1,662.50.
So the payment climbs from $332.50 to $1,662.50 across the build. It is not $1,662.50 from day one, a common misunderstanding. Payments are also not automatic draws: nothing releases until the request, inspection, and waivers are in.
The permanent phase: USDA versus FHA
Now compare the end loan on a $275,000 purchase. Assumptions: 30-year term, an illustrative 6.50% rate for both, the upfront USDA guarantee fee (1%) and FHA upfront MIP (1.75%) financed into the loan, USDA annual fee of 0.35%, FHA annual MIP of 0.55%. Taxes and insurance are excluded, and fees should be confirmed as of October 2026.
- USDA, $0 down: loan of $277,750 with the fee financed. Principal and interest: $1,755.57. Annual fee: $81.01 per month. Total: $1,836.58.
- FHA, 3.5% down ($9,625): base loan of $265,375, or $270,019 with the upfront MIP financed. Principal and interest: $1,706.70. Annual MIP: $121.63 per month. Total: $1,828.33.
The monthly difference is about $8, but the cash difference at closing is $9,625 in the FHA buyer’s pocket versus $0 for the USDA buyer. Closing costs can sometimes be handled through no-out-of-pocket closing options, depending on the program and seller or lender credits. Eligibility decides whether USDA is on the table at all.
Broker Access Compared With Other Providers on Construction Financing
The structural difference is shelf width. A single-company retail provider offers its own menu. Duane Buziak, as an independent broker, shops more than 500 wholesale lenders for the construction-to-perm structure that fits your lot, builder, and credit. His record supports that work: more than 1,400 five-star reviews, Scotsman Guide Top Originator recognition in 2025 and 2026, and $95.6M in solo production. Buyers can start with NoTouch Credit Pull, which previews options without a hard inquiry.
| Provider | Provider type | Construction-to-perm access | Pre-approval method |
|---|---|---|---|
| Duane Buziak | Independent mortgage broker | 500+ wholesale lenders compared for single-close construction financing | NoTouch Credit Pull, no hard inquiry to preview options |
| ALCOVA Mortgage, Staunton | Regional retail mortgage company | Confirm current construction programs with the provider | Confirm with the provider |
| Rocket Mortgage | National retail mortgage company | Confirm current construction programs with the provider | Confirm with the provider |
| Movement Mortgage | National retail mortgage company | Confirm current construction programs with the provider | Confirm with the provider |
Each of these companies publishes its own program details, and they change. Ask every provider you consider for its current construction-to-perm guidelines, minimum credit score, and draw inspection fees in writing, then compare them against what a broker can source across many lenders.
Draw Schedule FAQs for Valley Builders and Buyers
Details below are general and subject to program changes as of October 2026. Confirm county eligibility, fees, and timelines for your specific project.
Does Staunton allow construction-to-perm USDA financing?
USDA construction financing is typically single-close construction-to-perm, but it depends on the participating lender and the specific address. Check the property on the USDA eligibility map before planning around it.
How many draws does a Rockingham County build usually have?
Many schedules use four to six draws, often five, tied to foundation, framing, rough-ins, interior, and completion. Your builder contract and loan documents set the actual number.
Does Warren County qualify for USDA in 2026?
Eligibility is address-specific, not county-wide. Some Warren County locations qualify and others do not, so check your exact address on the USDA map and confirm the current income limit.
What happens if a Waynesboro inspection fails?
The draw is held until the builder corrects the issue and the work is reinspected. Later draws can be delayed too, which is why a contingency reserve and early builder communication matter.
Who pays for draw inspections in Frederick County?
Fees vary by program and provider. They are commonly charged to the borrower, sometimes per inspection, and should be disclosed in your loan estimate and construction documents before closing.
Can I act as my own general contractor in Page County?
Many programs require a licensed, experienced builder, and owner-builder loans are limited and stricter. Ask early, because this affects which loan structures are available to you.
Is interest due during construction in Shenandoah County?
Yes, typically on the drawn balance only. Interest-only payments rise as each draw is released, so your payment is smallest at the start of the build and largest after the final draw.
How long does a Winchester build take to reach the final draw?
Many new-home builds run roughly six to twelve months, but permits, weather, subcontractor availability, and inspections move that range. Your builder’s contract timeline should be the working number.
A Draw Schedule Is Only as Strong as the Plan Behind It
The buyers who finish a Valley build smoothly are the ones who matched the loan’s draw schedule to the builder’s contract, funded a contingency, and chose a loan structure before breaking ground. Duane Buziak can walk through those decisions with you, compare programs across hundreds of wholesale lenders, and use NoTouch Credit Pull to check your options without a hard inquiry.
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