Special Commitment Clauses

Date Down, Pending Disbursements Construction Loan

Consider the following language for insuring a construction loan, where you contemplate date down endorsements at the time of each draw

Pending disbursement of the full proceeds of the loan secured by the mortgage or deed of trust set forth under Schedule A hereof, this policy insures only to the extent of the amount actually disbursed but increases as each disbursement is made, in good faith, and without knowledge of any defect in, or objections to, the title, up the face amount of the policy.

Prior to each disbursement of the proceeds of the loan, the title must be continued down to such time for possible liens or objections intervening between the date hereof and the date of such disbursement.

Once in a while the lender asks for a bit more. Something like:

At the time of each disbursement, a title down date shall be performed on the property and a Pending Disbursement Down Date Endorsement may be issued showing any changes in title to the secured property and stating the total amount of the proceeds of the construction loan advanced by the lender at the date the endorsement is issued.