When does an acquisition loan typically get drawn down?

An acquisition loan is typically drawn down at the closing of the transaction. This is the moment when the buyer officially takes ownership of the property. The funds from the acquisition loan are released to facilitate this transfer, allowing the buyer to pay the seller and complete the purchase.

During the underwriting process, the lender assesses the risk and evaluates the borrower's financial stability and the property’s value, but no funds are exchanged at that stage. Drawing down funds on Day 1 is a misinterpretation; funds are not available until the deal is finalized at closing. Finally, drawing funds at the completion of the project pertains to funding for construction or renovations rather than acquisition, where the primary goal is to purchase the property itself. Thus, the correct point when the acquisition loan is drawn down is indeed at the closing of the transaction.