Ready to build your dream home?

Review our FAQs so that you can be empowered to make the right decisions for yourself, your lifestyle, and your goals.

Construction Loan Customer Portal FAQs

What to look for when choosing a home builder.

• They work with you directly and answer your questions thoroughly.
• They perform third-party inspections throughout the process.
• They've been in business for a while.
• They offer or are willing to provide good references.
• They care about the quality of materials used.

What are home builder red flags?

• They refuse to sign a contract or ask you to sign a confusing or unclear contract. A legitimate contractor will present you with a clear and concise contract that protects you and them.
• The estimate is too good to be true. This is often a sign of a scam or that they are using poor-quality materials.
• The contractor is okay with cutting corners - not following building code, using inferior materials, or rushing the job.
• The home builder has poor reviews or complaints online, with the Better Business Bureau, or Contractor's State Licensing Board.
• They ask you to handle the permits. A good contractor will know which permits are required and take care of them without any prompting.
• The builder has no proof of insurance or expects you to be liable if a problem occurs.
• They don't provide a list of their subcontractors.
• They ask for a big upfront payment.
• They ask you to pay in cash up-front.

Homebuilding and Remodeling Guide

• Guide to Homebuilding and Remodeling from the Minnesota Attorney General

A Guide to Hiring a Residential Building Contractor

• A Guide to Hiring a Residential Building Contractor from the MN Department of Labor & Industry

Draw FAQs

What is a draw, how many draws can I take, and how often can I take a draw?

• A draw is a portion of the construction loan funds that are paid to the builder at certain points during the construction of the home. 
• Star Bank implements an upfront fee for the first four draws. Any subsequent draws incur an additional charge of $175 to the borrower. It is important to note that the initial draw made at the time of closing is excluded from the count of those initial four draws.
• Star Bank's preferred draw practice is to facilitate monthly draws that are substantial in size.

What is the draw process?

Star Bank will initiate wire transfers to the designated title company, which will subsequently disburse the checks based on the provided draw request. The following steps outline the process:

1. Star Bank will verify the signature of both the builder and borrower(s) on the Star Bank Disbursement Request form. Builder documents will not be accepted.
2. Star Bank will thoroughly examine the invoices and lien waivers submitted by the builder.
3. Lien waivers received from the title company for previous draws will be reviewed, ensuring a comprehensive assessment of the property's clear tract status.
4. Conduct an inspection of the property.
5. Only after the completion of all the aforementioned steps will Star Bank proceed to wire the funds accordingly.

Do I need to fill out a draw form for every draw?

• Yes, in order to ensure compliance and proper documentation, it is mandatory for all involved parties to sign the Star Bank Disbursement Form for each draw. Additionally, we will conduct a verbal verification via phone call with borrowers prior to the disbursement of funds, leaving no room for exceptions.

What is the turn-around time on a draw?

• Upon obtaining ALL signatures, a thorough tract check, and complete lien waivers/invoices, we aim to provide funding within an average timeframe of 24-48 business hours. It is important to note that this timeframe may be subject to weather conditions, as site inspections are necessary for each location.

Other FAQs

What is a sworn construction statement?

• The sworn construction statement lists all the disbursements made for specific categories. Star Bank's priority is to ensure that expenses remain within the estimated costs, thereby maintaining the integrity of the loan amount agreed upon at closing. The loan amount cannot be adjusted after the loan is closed.

Can the sworn be changed?

• Yes, changes can be made to the sworn. While we are open to reasonable modifications, we must also adhere to the loan's budgetary constraints.

What happens if a change order is requested?

• Our top priority is to keep the build within the limits of the agreed-upon budget. In the event that a change order is requested and it surpasses the original budget, it is expected that the borrower will promptly cover the resulting deficit as per Star Bank's policy. The bank will conduct a thorough review of all change orders, and it is mandatory for each change order to be duly signed.

What Title Companies can I use?

• Star Bank has established partnerships with the following Title Companies: 
  • Stewart Title
  • Bankers Title
  • Land Title
  • Trademark Title
• These trusted entities possess dedicated draw departments, which we have identified as the most effective and streamlined for our builders and customers.

What does it mean that Star Bank only funds trailing advances?

• Star Bank exclusively provides funding for trailing advances, which are contingent upon the completion of work or the delivery of supplies. In the event of a pre-order, the title company assumes responsibility for directly disbursing payments to the company or subcontractors involved.

How do I request reimbursement for something I paid for?

• Star Bank requires documented proof of payment, delivery, and/or lien waiver.
• It is essential that any purchases made by the borrower are explicitly included in the sworn statement. 
• Star Bank does not cover expenses for personal items.

Can Star Bank pay me and I will pay the subcontractors?

• Star Bank can facilitate payments directly to you, provided that you furnish proof of payment, invoices, lien waivers from the vendors, and verification of the completed work.

How much cash can I take at close?

• If needed, Star Bank will fund at close money for plans, permits, surveys, and specs.

What is an early start?

• An early start refers to the beginning of construction prior to the closing of the construction loan.
• Work that is allowed before the closing includes: survey staking of the lot, silt fencing, and soil borings.
• Work that is not allowed before the closing includes, but is not limited to: material, equipment, or supply delivery to the property; tree removal or trimming; moving of dirt; tearing down of buildings; and no dumpsters on the property.
• For more information, review our Early Start Pdf

Why am I getting so many pre-screened credit and insurance offers after beginning the loan process?

• After applying for credit, customers may notice an influx of pre-screened or pre-approved credit or insurance offers. The credit reporting agencies generate lead lists and sell them to companies. If you fit the company's ideal criteria, you may receive sale solicitations.
• At Star Bank, we value our customers and are committed to ensuring transparency and protecting their privacy. We have put together a flyer to offer more details on pre-screened offers and how to opt out if you prefer not to receive them.
• Pre-Approved Offers Pdf