Construction Glossary
Construction Glossary
Plain-language definitions of the terms you'll hear most often.
4 min read
Draw: a scheduled release of construction loan funds tied to phase completion.
Lien waiver: a signed document from a contractor or subcontractor confirming they've been paid for work to date and won't file a lien.
Soft costs: non-construction project costs like permits, design fees, surveys, and loan fees.
Hard costs: actual construction costs — labor and materials.
LTV (Loan-to-Value): loan amount ÷ appraised value of the finished home.
LTC (Loan-to-Cost): loan amount ÷ total cost to build.
Construction-to-Permanent (C2P): a single loan that funds the build and then converts to a long-term mortgage.
Punch list: the final list of small items the builder must fix before closeout.
Certificate of Occupancy (CO): the local government's sign-off that the home is safe to live in.
Contingency: budgeted reserve for surprises during construction, typically 5–10%.
Educational content only. NBLOCK Consulting does not provide legal, financial, lending, tax, insurance, or construction advice. Requirements vary by state, county, lender, and project — always confirm with the appropriate licensed professional.
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