A contingency line item on your budget allows you to have a flexible balance for unexpected needs.
Contingency is a special line item in the system and as such your Lender may have special requirements before it can be drawn from. In order to capture more granular data on how budgets are used, many Lenders do not allow the contingency line items to be drawn from directly. Our platform does not allow this by default. (This may vary by customer, so please check with your Lender.)
If your Lender allows you to draw directly from you contingency lines, then you may request these funds during your draws directly (More on this below). However, as most Lenders do not allow this, you should plan to reallocate those funds during your draw request, moving contingency dollars into the specific line item(s) where those dollars are to be, or have been used.
In some cases, your lender may have requested that the contingency line item be set up as a typical "hard cost" line item allowing you to draw directly without having to re-allocate. If this is the case, your project won't show a contingency other than the budget line item, and no granular data will be collected on how it was used. The reason for being set up this way is to simplify the draw process.