Third party account to disperse payments to contractor?

[Reece Teramoto]

For a particular lender that I'm working with, they are requiring me to pay rehab funds at closing so that there's a better paper trail of the funds. However, my current issue is figuring out how to disperse the funds to the contractor at regular draws. 

I'm currently working with a title company that's willing to accept extra funds for rehab at closing, then immediately pay those out to an account, such as the contractor. This is fine if I plan to pay the contractor in full upfront, but since this will be my first time working with this particular contractor, I'd rather pay in 25% draws. 

The title company isn't able to hold onto any funds after closing, so I'm wondering if there are any options for sending those funds to some other holding account (which can't be in my personal name per lender requirements). Has anyone done this before or does anyone have ideas?

Here's how the money needs to flow--

Prior to closing: Purchase price + rehab costs paid to Title Company X

At closing: Title Company X distributes purchase price to seller, distributes rehab costs to account Y. "Account Y" can be any account that isn't my personal account.

In the above, what are my options for "Account Y" besides just having it be the contractor's account? Maybe some account set up by my property manager / agent to hold the funds and distribute them to the contractor in draws? Ideally I'd also like to not pay too much to have the money held. 

Hopefully I've explained things clearly!