Can you take pay from your hard money loan during construction?

[Sarah Lorenz]

We are looking at a new construction project, a single spec house with a hard money loan. Can we take pay out of the loan since we are acting as the general contractors? I think I read/heard discussion of this on BP, but I can't find record of it, and I'm wondering how that is structured. 

[J Scott]

I would talk to your lender about it.  Did he ask for a cost breakdown of the project?  Is there a line-item for GC costs?  Did you disclose that you'd be the GC and that you'd be taking payment as the GC?

As long as you disclosed, and as long as your lender is okay with it, I see no problem with it...

But, if you're doing this behind your lender's back, that's an issue (in my opinion)...