# How Rehab Draws Work on a Fix and Flip Loan | KREC

*How rehab draws work on fix and flip loans: draw schedules, inspections, timing, and how to keep your contractor paid between draws.*

## How Rehab Draws Work: Inspections, Timing and Paying Your Contractor

Rehab money usually arrives after the work, not before. Here's how draws work and how to keep your project and your contractor moving.

Short answer

On most fix-and-flip loans, the rehab budget is held back at closing and released in draws. You complete a phase, request a draw, an inspector confirms the work, and the lender reimburses that phase. Because funds follow finished work, you'll need cash or contractor terms to cover each phase before it's paid.

Key points

- Rehab funds are held back and released in phases.
- Each draw follows an inspection of finished work.
- Plan cash for the first phase before the first draw.

### The draw cycle

1. Complete a phase of work from your approved scope.
2. Request a draw with photos, invoices and lien waivers where required.
3. An inspector visits and confirms what's done.
4. The lender releases funds for the completed work.

**Draw schedule: $60,000 rehab budget, illustrative**

|  | Amount |
| --- | --- |
| Draw 1: demolition and rough-in | $15,000 |
| Draw 2: mechanicals, roof and windows | $15,000 |
| Draw 3: drywall, kitchen and baths | $20,000 |
| Draw 4: flooring, paint and punch list | $10,000 |
| **Total rehab budget** | **$60,000** |

### Keeping your contractor paid

Because draws reimburse finished work, someone has to front each phase. The options are your own cash, a contractor willing to wait for the draw, or smaller phases with more frequent draws. Agree on this in writing before work starts.

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### Draw mistakes that slow projects down

- A scope of work too vague for an inspector to verify
- Changing the plan without telling the lender
- Missing lien waivers or invoices
- Requesting a draw before a phase is truly complete

For how the draw budget fits into the overall loan, see [fix-and-flip financing](https://keyrealestatecapital.com/blog/fix-and-flip-loans).

### Frequently asked questions

#### How long does a rehab draw take?

It varies by lender and inspector availability, but a complete request with photos and invoices moves fastest. Ask your lender for their typical turnaround.

#### Can I get rehab money up front?

Most fix-and-flip loans release rehab funds after work is completed and inspected. Some lenders advance part of the first phase, so ask.

#### Do I pay interest on undrawn rehab funds?

It depends. Some loans charge interest only on drawn funds; others charge on the full loan amount from day one.

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## Article Metadata
- **Headline:** How Rehab Draws Work: Inspections, Timing and Paying Your Contractor
- **Published:** 2026-10-27
- **Author:** Key Real Estate Capital

## Frequently Asked Questions

### How long does a rehab draw take?

It varies by lender and inspector availability, but a complete request with photos and invoices moves fastest. Ask your lender for their typical turnaround.

### Can I get rehab money up front?

Most fix-and-flip loans release rehab funds after work is completed and inspected. Some lenders advance part of the first phase, so ask.

### Do I pay interest on undrawn rehab funds?

It depends. Some loans charge interest only on drawn funds; others charge on the full loan amount from day one.

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