Does draw inspection software guarantee compliance?

What software can do.

Draw inspection software makes a lender's controls easier to follow and easier to show:

• Consistent capture. Required photos and questions travel with every order, so each inspection collects what the policy asks for.
• A dated record. Photos carry location and time data, and status changes are logged with who made them.
• One standard. Internal inspectors and outside vendors deliver the same report, so files read alike.
• Retrieval. The order, the report and the review history can be pulled up when an auditor or examiner asks.

What stays with the lender.

Software records controls; it does not choose or apply them. The FDIC's construction and land development core analysis procedures ask whether inspectors are qualified and independent of the lending function, whether reports are detailed enough to support disbursements, and whether funds go out only after management reviews written inspection reports, lien searches and title updates. Each of those is a decision the lender makes and documents. The same holds for inspection frequency, the review of each report, the funding decision and a retention schedule set with counsel.

Using a vendor does not move the duty either. The federal banking agencies' Interagency Guidance on Third-Party Relationships (OCC Bulletin 2023-17, June 2023) makes clear that relying on a third party does not diminish a bank's responsibility to operate safely and soundly and to comply with applicable laws. The software provider is itself a third-party relationship to manage.

How to read a vendor's compliance claim.

A vendor that promises compliance as an outcome is describing something only the lender's program can produce. Ask what the software records instead: which evidence is required before an inspection can be submitted, what data each photo carries, whether status changes and rejections keep a history, and how a file is exported for review. The draw inspection software buyer's guide lists the features to require.

Why it matters for lenders.

Examiners read the loan file, not the vendor's brochure. A written policy is only as strong as the record behind each advance, whatever tools produced it; see how examiners review construction loan monitoring. Credit unions and private lenders answer to different rules than banks, and procedures change over time, so confirm current requirements with compliance counsel.

How RAZE handles it.

RAZE is built to support audit and exam review. RAZE does not make a lender compliant, and it does not approve or fund draws: the policy and every decision stay the lender's. Lenders set the required questions and photos for each order. Photos carry GPS coordinates and date and time stamps and link to the draw sheet line items they support, every status change stays on the record with who made it, and a rejected inspection keeps the reviewer's reason. RAZE integrates with existing construction loan administration (CLA) workflows and runs beside the LOS and core a lender already uses.