Private Construction Loan

[Isaac Atwood]

Hello all,

Recently I purchased a 3 family fixer upper for $77k, which had an after repair appraised value of $130k.

Due to the sellers circumstances they required a < 1 month turnaround between contract signing and closing. This made conventional financing impractical, and I was instead extended a $96,700 construction loan by a local investor. I placed 10% down on the initial purchase, and with fees (etc) the construction loan available to me is $26,000.

During closing, my lawyer recommended that I make repairs and pay for them, then request a release of the loan money. I've done this and am at the tail end of repairs for this purchase. I'm looking for guidance on how to request a release of the $26,000 that is currently being held as a construction loan - either towards the loan principal or in cash. I am currently paying 12.5% P+I towards the entire loan balance ($96,700 - $1099/month).

Any guidance would be appreciated. 

My state is NY and the location is Binghamton, if this is helpful.