About budget line item types

Hard Costs

• These line items affect the Construction Progress and Construction Progress Funded bars tracking your project health:

  • Construction Progress is the overall inspection progress % complete for all hard costs on the project.

  • Construction Progress Funded is the % funded for all hard cost budget items on the project.

• You can enable retainage in any percentage amount, with the default being 10%, for any hard-cost line item. Learn more about enabling retainage on a project here.

• Inspectors see hard cost line items and AIA line items to perform inspection requests. Learn more about the inspector experience here.

• You can toggle on the Inspection Driven Availability toggle in Organization Settings for Inspection progress % to determine draw availability for hard cost line items. Learn more about modifying project settings here.

  • When Inspection Driven Availability is not enabled, funds are not released by inspection progress. Funds on the line item

• Builders that you’ve adjusted to have Scoped Access will only see hard cost line items. Learn more about editing builder financial access level here.

Soft Costs

• These line items are fully available upon project activation to draw on and cannot be inspected.

  • This availability is always visible to the borrower.

  • This availability is not visible to the builder assigned scoped access or no-financial access. To add visibility to the builder, toggle on Full Financial Access in the People tab. Learn more about editing builder financial access level here.

• You can enter any cost that does not depend on inspections to release availability as soft costs, for example, permits and taxes.

Land Costs

• You can use this budget item type to account for lot and land purchases as part of the construction project.

• These budget items are immediately available to draw without an inspection.

Closing Costs

• These line items are automatically funded with a closing draw at activation.

  • Closing cost line items can be edited to a different line item type, renamed, and have funds reallocated into them. However, funds cannot be moved from this line item type beyond the amount that has already been funded.

There are two kinds of Reserve Cost line items:

• Interest Reserve

  • These line items represent a pool of funds to pay for interest accrued on a construction project to be funded out of the loan.

  • These line items can be funded either through a draw or a transaction under the Activity tab. Learn more about the activity tab here.

  • Borrowers can see the balance for these line items but cannot request a draw on them unless the toggle Allow Borrowers and Contractor Reserve/Fee Draw Requests is enabled in Project Settings.

• Contingency

  • Borrowers and builders can see the line item but cannot request a draw on it by default unless the toggle Allow Borrowers and Contractor Reserve/Fee Draw Requests is enabled in Project Settings. Learn more about modifying project settings here.

  • We recommend that you reallocate these funds to the appropriate line items in order to create an audit trail for the full budget. As a lender, you can do this within a draw request or from the Adjust Budget screen.

  • Your Contingency Utilized bar in the Overview tab of Manage Draw tracks the progress of contingency funds.

Fees

• You can fund and report on fee line items as a lender.

• Borrowers can see a fee line item balance, but cannot request a draw unless the toggle Allow Borrowers and Contractor Reserve/Fee Draw Requests is enabled in Project Settings. Learn more about modifying project settings here.

• Fee subtypes

  • Inspection Fees:

    • Fees that are uniquely collected for inspections.

    • If you’d like to enable automatic inspection fee deduction when a third-party inspection is completed, you can set up an Inspection Rate in the Edit Financials section. Learn more about editing loan financials here.

      • If a value is populated in the Included Inspection section, no automatic inspection fee deduction will occur until the amount of completed inspections is greater than the included inspection value.

      • The inspection rate is the amount the inspection fee line item will be reduced by when an inspection is completed.

  • Custom Fee/General Fee subtype

    • We recommend using Custom Fee or General Fee subtypes to account for any non-inspection fees.

AIA

• These line items capture the full AIA contract value.

• Your draw availability on these line items is based on inspection progress if Inspection Driven Availability is enabled in Project Settings. If inspection-driven availability is not enabled, draw availability is not impacted by inspection progress. Learn more about modifying project settings here.

• You are required to Enable Itemized Hard Cost Draws as a project setting on projects with AIA line items.

• Lenders and borrowers are asked to complete AIA G702 line items when requesting a draw, which include:

  • Net Change by Change Orders (G702, Line 2)

  • Total Retainage (G702, Line 5)

  • Current Payment Due (G702, Line 8)

• When a budget has an AIA line item, the borrower or builder is able to submit a draw that mirrors the AIA pay app. The line item has a pop-out that prompts the borrower or builder to enter the items as outlined on the pay app. The builder or borrower can also upload a copy of the pay app.