How do you show sweat equity so it doesn't appear the borrower actually needs to come in with cash? Borrower is building on land already owned. Our loan amount is $310,000 and we show the total payoffs as $369,800 per the total construction cost breakdown and the payoff of the land loan. The borrower is going to do $39,800 in sweat equity but the CD shows it as Cash to Close. We don't know how to show it so it reflects $0 on the CD since it isn't actual cold hard cash. Any help would be GREATLY appreciated.

Adjustments - Section L

Just curious what label you would put in Section L for the sweat equity?

Our system has that specific category under adjustments. I'm not sure I would reflect it in this particular scenario simply because work you are doing yourself on your own construction wouldn't typically be in the contract with the third party, but I digress.