Construction Loan Disbursing Agreement printable pdf download

FORM 3A.30 CONSTRUCTION LOAN DISBURSING AGREEMENT

This Construction Loan Disbursing Agreement (the Agreement), entered into as of [date] by and among [name of title

company] (Company), [name] (Owner), [name] (Contractor), and [bank] (Lender).

WHEREAS, Lender has agreed to make a certain $___ construction loan (the Loan) to Owner to be evidenced by a

promissory note of even date herewith in the principal amount of $___ (the Note), which Note is secured by a certain Deed

of Trust and Security Agreement from Owner to [name of trustee] for the benefit of Lender of even date herewith (the

“Deed of Trust”); and

WHEREAS, in connection with such loan, Owner and Lender have entered into a certain Construction Loan

Agreement of even date herewith (the Construction Loan Agreement); and

WHEREAS, Lender, Owner and Company have agreed that Company shall be Owner’s agent for the purpose of

receiving certain funds and disbursing the same in accordance herewith; and

WHEREAS, the parties hereto wish to provide for the disbursement of funds and for the insuring of Lender against any

lien imposed by law for labor, services and material furnished to improve the Real Estate (as hereinafter defined) over the

lien of the Deed of Trust.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the sufficiency of

which are expressly acknowledged, the parties hereto consent and agree as follows:

Definition of Terms. The following terms shall have the following meanings:

“Application for Payment” shall mean a certified application for payment from Contractor to Architect in the

form of Exhibit A hereto, incorporated herein by reference.

“Architect” means [name of firm], or its permitted successors and assigns.

“Architect Contract” means that certain Standard Form of Agreement between Owner and Architect, by and

between Architect and Owner, dated ____.

“Construction Contract” means that certain Standard Form of Agreement between Owner and Contractor, by

and between Owner and Contractor, dated ____.

“Draw Request” means a Payment Request executed by the Owner and Inspecting Architect in the form of

Exhibit B hereto, counter-executed by Company to Lender, requesting payments pursuant to the Construction

Loan Agreement, Construction Contract, Architect Contract, and this Agreement.

“Escrow Deposits” means funds and amounts paid to Company by Lender, Owner, and Company for deposit

in the Escrow Fund pursuant to this Agreement, which are anticipated to include the amounts set forth in

Schedule I [omitted] and which are expected to consist of (i) Lender Disbursements made by Lender to

Company up to the Loan Principal amount of $___ shown on Schedule I [omitted] hereof; (ii) interest earned

on the Escrow Account; and (iii) additional sums, if any, paid by Owner to Lender pursuant to paragraph 6 of

this Agreement.

“Escrow Fund” means the account established by Company to receive Escrow Deposits pursuant to this

Agreement and the account from which payments to payees are made pursuant to this Agreement.

“General Conditions” means those certain General Conditions of the Contract for Construction (AIA A201).

“Inspecting Architect” means [name of firm], or its permitted successors or assigns.

“Lender Disbursements” means all payments made by Lender to the Escrow Fund established by Company

for the account of Owner.

“Payment Request” means a request by the Owner and the Inspecting Architect to Company that Company

issue a Draw Request to Lender, in the form of Exhibit B hereto, incorporated herein by reference.

“Real Estate” means real estate and improvements thereon secured by the Deed of Trust, described more

fully in Exhibit C hereto [omitted], incorporated herein by reference.

Any terms not defined herein shall have the meaning set forth in the Construction Loan Agreement.

Deposits into Escrow Fund by Lender and Owner

Subject to the terms and conditions of this Agreement Lender covenants and agrees to make Lender

Disbursements to the Escrow Fund maintained by Company up to the Loan principal amount for deposit in

the Escrow Fund and for the account of Owner; provided, however, that Lender shall not be required to make

any payments in violation of any state or federal banking law or supervisory regulation, and further provided

that Lender’s obligation to make Lender Disbursements shall in all instances be subject to and governed by

the Construction Loan Agreement. Lender’s obligation to make Lender Disbursements shall be further

subject to the following:

As set forth in the Construction Loan Agreement, as a condition to making any Lender Disbursement,

Lender shall have received a Draw Request from Company at least ten (10) full business days prior to

the requested disbursement date;

Construction Loan Disbursing Agreement

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