Residential Construction Draw Guidelines

Construction Draws with GenX Capital

At GenX Capital, we strive to provide clarity and transparency for you, and also for our network of capital partners. These
institutional and individual investors appreciate (and sometimes require) that we utilize neutral third-party vendors to
objectively manage construction draws. If you have any questions about this program, please contact your relationship
manager.

Draw Requests: Required Documents

These documents must be submitted by the lender and/or the construction inspection vendor for every new draw request.

• Budget – All draws should specifically reference the line items in the construction budget that is outlined in
the loan documents.

• Draw request form

• Lien waiver – Required if the borrower is not the general contractor. Must be signed and must specify the
minimal amount, which should match the amount of the draw request.

• Borrower wire instructions – Including name of bank, domestic routing number, name of account, and
account number.

• Lender wire instructions – If requesting reimbursement for inspection fees, must include name of bank,
domestic routing number, name of account, and account number.

• Receipts and invoices – For the inspection report and/or items paid for.

• Inspection report – Completed by the construction inspector.

• Title date down endorsement – Insuring the new funded amount. (If applicable*)

* If there is a disbursement clause in the construction loan agreement, a title endorsement will be required on every draw.

Approved Inspection Vendors

Before your borrower has requested the first construction draw, you should select a GenX Capital-approved inspection provider.
Preferred inspection providers:

05/28/2019
While offering solid inspection services, Trinity enables the lender to facilitate the inspection and send all relevant documents
to GenX Capital. Land Gorilla’s full-service option requires little or no lender involvement in the draw process.

Other GenX Capital-approved inspection providers include CIS, Buildzig, Granite, CFSI, and NVMS.

Each provider has different strengths and processes. Please discuss options with your relationship manager or member of
the GenX Capital servicing team prior to the first draw.

Inspection Pricing*

Units on Property Trinity Land Gorilla

1 $100.00 - $155.00 $100.00 - $125.00

2 $160.00 - $205.00 $125.00
3 $185.00 - $235.00 $175.00
4 $210.00 - $285.00 $200.00

GenX Capital Fees

GenX Capital charges a fee for every construction draw.

$30.00 - Wire Fee

*Pricing as of May 30, 2019, subject to change without notice. Inspection pricing can vary by state, budget, and the property itself.

Other Guidelines

Construction Draw Reimbursements

Generally, construction is reimbursed in arrears. However, under certain circumstances, GenX Capital will fund a draw for
specific line items if both of these conditions are met:

1. Paid invoices, receipts, or photos justify a higher amount than the credit given in the inspection report. In
addition, the lien waiver will have to reflect the higher amount.

2. Any “Lender Request” remark in an inspection report is fully backed up by invoices, receipts, and photos.

Stored Materials, Deposits, and Prepaid Items

Stored materials on site will not be reimbursed until the improvement or work has been made to the property. In
circumstances of deposits for custom-made items—such as cabinets, countertops, doors, and windows—GenX Capital
may allow the borrower and contractor to receive monies for the deposit items as long as a paid invoice is provided and
that line item is in the budget.

Work Order Changes

All work order changes that affect the project and/or budget must be approved by GenX Capital before work starts, and must
clearly specify one of the following:

1. Reduction of “Scope of Work” or decrease/change in materials

2. Increase in “Scope of Work” or change in materials

3. “Scope of Work” changes not allowed after 25% or greater of a line item has been reimbursed

05/28/2019
Title Date Down Endorsement
If there is a disbursement clause in the construction loan agreement, a title endorsement will be required on every draw.
Certain insurance policies will only insure up to the loan value; this endorsement modifies the policy and effective date
with an increase in coverage. It is the borrower’s responsibility to pay for the endorsement fee. The lender will coordinate
with the title company to order and obtain the endorsement. Draws will not be released until endorsement has been
provided to GenX Capital.

Borrower Contribution
Sometimes, the approved “Scope of Work” budget amount is higher than the construction reserve amount that was
pre-determined at the close of the loan. If the borrower contribution is more than 10% of the budget, we will deduct the
borrower contribution on a pro-rata basis from every draw until completion of the project. Any borrower funding less
than 10% of the total will be deducted in its entirety from the first draw.

Remaining Construction Reserve Balance

Any remaining balance after 100% completion of the project will be sent out in the final draw (in most cases). However, if
the project has been completed and the borrower has already been fully reimbursed, and there are still remaining funds
in the reserves, the balance will be applied as a principal paydown on the loan. Borrower consent (in writing) is required
before applying the funds.

Loan Maturity & Delinquent Status

• Loans that reach maturity are not eligible to receive construction draws until an extension agreement has
been executed.

• Loans that are not performing will not receive construction draws until all outstanding payment(s) have been
received and applied. The lender/servicer can provide proof of payment received if not immediately available
from the sub-servicer.

05/28/2019
Construction Draw Process for Trinity Inspection
Trinity provides draw inspection services, but you will remain the primary point of contact. You will continue to work
directly with the borrower and send required documents directly to GenX Capital. Generally, this process will take five to
seven business days if all documents are received and Trinity is able to schedule the inspection in a timely manner.

Lender selects Trinity Inspection as preferred service

Selection vendor prior to the sale of the loan to GenX Capital. The
1 lender sets up an account with Trinity.

Draw Request Borrower reaches out to the lender for a draw request
2

Lender contacts Trinity to order an inspection. Lender

coordinates with the borrower to gather required
Inspection Request documents and emails them to GenX underwriter
3 noting the address of the property in the subject line.
Email subject line example: 1234 Main St – Draw Request

Trinity contacts borrower to schedule an inspection

Scheduling (within 1 to 3 business days, depending on availability).
4

Inspection Report Lender sends the completed inspection report with all other
required documents to: GenX underwriter
5

GenX Capital provides an approval decision

Approval within 2 business days.
6

Once GenX Capital receives and approves the complete draw

Disbursement package, the distribution will be wired and lender will receive
an email with the draw summary. This typically takes 1 to 2
7 business days.
Inspection Fees
Generally, inspection fees range from $100 to $475 per inspection for one to eight units (see Trinity pricing). Inspections are
based on the amount of total construction budget and number of units being inspected.

05/28/2019
Construction Draw Process for Land Gorilla
Land Gorilla provides full-service construction monitoring. When selecting Land Gorilla, please only choose the
full-service option. Land Gorilla will be the point of contact for all draws, and they work directly with the borrower
and GenX Capital.

Lender selects Land Gorilla prior to the sale of the loan

Selection to GenX Capital and registers. GenX Capital will onboard the
1 loan with Land Gorilla.

Land Gorilla will reach out to the borrower to notify them

Transition that their loan has been transitioned and they will be the
2 main point of contact for draws.

Inspection Request The borrower orders an inspection directly from Land Gorilla;
an inspector will call to schedule a project visit.
3

GenX Capital receives the inspection report along with

Inspection Report additional documentation (lien releases, invoices, receipts,
4 wire instructions) from Land Gorilla.

Approval GenX Capital provides an approval decision within 2 business

days and notifies Land Gorilla, who notifies the borrower.
5

GenX Capital processes the draw request then wires

Disbursement funds to the borrower. A draw summary email is sent
6 to Land Gorilla.

Inspection Fees
Generally, inspection fees range from $125 to $250 per inspection for one to four units (see pricing matrix), and are based
on the amount of construction budget, square footage, etc.

These fees will apply in addition to the inspection fee:

• $650 – Administration fee (one-time fee per loan/project)
• $75 – Lender setup fee (one-time fee)

05/28/2019