Escrowed renovation funds, inspection-based draws, interest-only payments during construction, then sell or refinance — how the Luminate Bank Interim Renovation Loan works.
How Does an Interim Construction Loan Work? | The 2 Mortgage Guys
Escrowed renovation funds, inspection-based draws, interest-only payments during construction, then sell or refinance — how the Luminate Bank Interim Renovation Loan works.
How Does an Interim Construction Loan Work?
From Closing to Payoff
At a Glance
The Draw Process Step by Step
What Gets Financed Into the Loan
Keep Exploring
Frequently Asked Questions
Map Your Draw Schedule and Exit Plan
After your loan closes, renovation funds are placed into an escrow account. Contractors are paid through scheduled construction draws as work progresses and inspections are completed. The loan is interest-only during construction, and once the project is finished, you'll typically sell the property or refinance into a permanent mortgage.
The interim construction process starts at closing: acquisition funds and renovation dollars are combined in one short-term note. Renovation money does not go directly to you — it is escrowed and released through draws as your general contractor completes work and passes inspections.
During the 12-month interest-only period, your payments cover interest on disbursed funds. You are not paying down principal like a 30-year mortgage. This keeps carrying costs lower while the property is under construction.
When renovations finish — within the 15-month construction window — you execute your exit: sell the property or refinance into permanent financing. Ryan and Steve map this timeline with you before you close.
How renovation dollars move from escrow to your contractor.
Eligible renovation costs beyond labor and materials.
Related Luminate Bank Interim Renovation Loan guides and renovation programs to compare before you apply.
Ryan & Steve will walk through escrow draws, interest-only payments, and your refinance-or-sale strategy before you commit to an interim construction loan.
All loans are subject to credit and property approval. Luminate Bank Interim Renovation Loan program guidelines, LTV limits, loan amounts, and pricing are subject to change without notice and may not be available in all areas. This is not an offer to enter into an agreement. Information is for educational purposes only and is not a commitment to lend.