Common use of Limitations on Advances Clause in Contracts

Limitations on Advances. Lender will only make Advances for the acquisition of Lots and other costs and expenses specified in the Approved Budget, and then only (i) in the case of soft costs payable to Affiliates of Borrower, for those soft costs that are specifically approved by Lender, (ii) in the case of soft costs payable to Persons other than Affiliates of Borrower, for work performed, services rendered or materials furnished, and (iii) in the case of hard costs, for work performed, services rendered or materials furnished. Advances for payment of construction costs will only be made after actual commencement of construction of the Home and may not exceed the aggregate of (a) the costs of labor, materials and services incorporated into the Project in a manner acceptable to Lender not to exceed the Approved Budget, plus (b) if approved by Lender, the purchase price of uninstalled materials to be used in the construction of the Home that are stored on the Lot or in the Home not to exceed the Approved Budget, or elsewhere with the written consent of and in a manner acceptable to Lender, and less (c) any Retainage, if applicable, and less (d) all prior Advances for payment of costs of labor, materials and services for the construction of the Home. Lender shall have no obligation: (i) to make any Advance for a line item in excess of the sums for such line item in the Approved Budget, (ii) to consider an Advance Request unless and until Borrower has complied with this Agreement, and (iii) to make any Advance which would cause the aggregate of all Advances to be greater than the amount of the Maximum Commitment. If the aggregate amount of Advances for any Home is insufficient to pay for all labor and materials necessary to complete the construction of the Home, Borrower shall pay all excess costs immediately with funds from sources other than the Loan.