The Content Of The Article:

If for the purchase of a completed property the amount borrowed from the bank is released immediately upon signing of the notarial deed, the situation is quite different for a construction project. What are the conditions for making the funds available? Explanations.

Principle of provision of funds for a construction project

As with any real estate acquisition where a loan is used, the terms and conditions for the funds to be made available by the financing organization are specified in the credit offer and its specific conditions.
For a construction, the amount lent is gradually released by the bank, that is to say by step according to the progress of works. However, some rules applicable to the disbursement of funds depend on the precise nature of the project, but also on the banking organization.

Provision of funds for construction by a developer

For the construction of a single house by a developer, the bank makes the various payments, either directly to the builder or to the borrower by giving him the regulations by check payable to the professional.
To do this, it requires for each operation mandate of the borrower, but also presentation by this one the manufacturer's bill of lading, and where appropriate the certificate of completion of the work.
In all cases, the following payment levels must be respected: 35% of the total price at the completion of the foundations, 70% at the out-of-water stage, 95% at the end of the works, and the balance on delivery.

Provision of funds for a construction carried out by the borrower

For a single house where the borrower realizes the construction himself, the funds are paid to him by check or bank transfer, by providing supporting invoices specifying the nature of the materials purchased, as well as their costs.
If he also solicits contractors, he must then send to the bank the invoices corresponding to the work carried out, bearing the mention "Good to pay for the sum of...", so that it makes the payments.


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