Is a draw inspection the same as an appraisal?

Value versus progress.

An appraisal answers "what is this property worth?" Cornell's legal dictionary defines it as the process by which an expert determines the value of a property. For a construction loan it is typically a plans-and-specs appraisal that produces an as-completed value from the drawings, the specifications and the cost breakdown. It is performed by a state-licensed or certified appraiser under USPAP, with federal oversight through the Appraisal Subcommittee, and it is required for most real-estate-secured loans.

A draw inspection answers "how much of the work is done?" It is performed during construction, usually once per draw request, by an inspector who compares visible progress with the budget and records percent complete by line item with photographs. It carries no opinion of value.

The confusion is understandable. Both involve a site visit, a report and a lender, yet the appraisal is about the finished asset and the draw inspection is about the money going out the door before the asset exists.

Where they meet.

At the end of the project the two converge. Lenders selling to the agencies typically need a certification that the improvements were completed according to the plans. Fannie Mae's Selling Guide describes that step as a completion report, often on Form 1004D, supported by visually verifiable exhibits that can be authenticated with metadata and the property's geocode. That is a valuation document, and it is distinct from the lender's final draw inspection, even though both may be ordered in the same week.

Why it matters for lenders.

Treating one as a substitute for the other leaves a gap. An appraisal does not tell you whether the third draw was earned. A stack of draw reports does not tell you whether the as-completed value still holds after change orders. Risk policies should name both, with who orders each, when, and what the file must contain.

How RAZE handles it.

RAZE is the progress-verification layer, not the valuation layer. Inspections are ordered and scoped in the Ordering Engine, captured in the Mobile App with GPS and time stamps on every photo, and delivered as line-item progress reports. Appraisals stay with the lender's appraisal management process. The two records sit side by side in the lender's construction loan administration workflow, each answering the question it was built for.