Can draw inspection fees be included in closing costs?

Three ways the fee is collected.

Lenders handle draw inspection fees in one of three ways, and all three are common.

1. At closing. The lender estimates the number of inspections, multiplies by the per-inspection fee, and collects the total as a closing cost. Simple to administer, and the borrower knows the full cost up front. The lender holds the funds and pays each inspection as it occurs.
2. Per draw. Each inspection fee is deducted from the draw it supports. The borrower pays as the project progresses, and an unexpected re-inspection is simply added to the next draw.
3. Invoiced separately. The fee is billed to the borrower outside the loan. Least common for residential, more common on commercial projects where the borrower's own construction manager is coordinating.

Which one a lender uses is policy. What that policy has to respect is disclosure law and the loan documents.

Consumer-purpose loans and the Loan Estimate.

If the construction loan is a consumer-purpose, closed-end loan secured by real property, the TILA-RESPA integrated disclosures apply. Regulation Z's Loan Estimate rules at 12 CFR § 1026.37 require loan costs to be itemized, and the Bureau's official interpretations address inspection and handling fees for the staged disbursement of construction loan proceeds specifically: they are loan costs, and the way they are disclosed depends on whether they are collected at or before consummation or afterward. The CFPB's Loan Estimate explainer walks a borrower through the same sections. The practical consequence is that a lender cannot treat the inspection fee as an afterthought. It needs to be estimated, placed correctly on the disclosure, and reconciled on the Closing Disclosure.

Business-purpose construction loans, including most spec, investor and commercial lending, are outside those disclosure rules. There, the commitment letter and loan agreement govern.

Why it matters for lenders.

Inconsistent handling is the risk. One branch collecting at closing and another deducting per draw, or a fee disclosed as an estimate that bears no relationship to the inspection policy, invites both compliance findings and borrower disputes. Set the method in policy, match the disclosure to it, and confirm the treatment with compliance counsel for each loan program.

How RAZE handles it.

A published per-inspection rate makes the closing-cost math straightforward. The RAZE Rate Card prices a standard single-family residential draw inspection at $125 when RAZE sends the inspector and $25 per request with your own, at any U.S. address, so the estimate is the expected number of inspections times a known fee. RAZE invoices the lender monthly; the lender chooses whether to collect at closing, per draw or separately.