What is a construction draw inspection?

What the inspection covers.

A draw inspection answers one question: does the work on site support the money being requested? The inspector compares visible progress against the approved budget and the current draw request, then records three things. First, a percent complete for each budget line item, such as foundation, framing or roofing. Second, photographs that tie the observation to the property and the date. Third, exceptions: work claimed but not visible, materials stored on site, or conditions a reviewer should know about.

The inspector does not approve the draw. The report is evidence. The lender's draw reviewer or construction loan administrator reads it against the request and decides whether to fund in full, fund in part, or hold.

Why it matters for lenders.

Construction loans are funded in stages, and every stage is a chance for the collateral and the balance to drift apart. Bank regulators treat on-site verification as a basic disbursement control. The OCC's Commercial Real Estate Lending booklet lists site inspections among the controls it expects around construction advances, alongside budget monitoring and lien searches before disbursement, and the FDIC's examination manual for construction and land development lending treats inspection and disbursement procedures as core parts of a bank's monitoring program.

The evidence that monitoring works is public too. The FDIC's study of nearly 30,000 multiple-draw construction loans, later published in the Journal of Finance, found that negative inspection reports are followed by more denied draw requests, and that more frequent inspection is associated with fewer defaults. Tulane University's summary of the research puts it plainly: loans with more on-site inspections are less likely to default.

A draw inspection is also the record. When an examiner, an internal auditor or a workout team asks why a draw was funded, the inspection report, its photos and its timestamps are what answer the question.

How RAZE handles it.

RAZE runs the inspection layer beside the construction loan administration system a lender already uses. A request is created in the Ordering Engine with the property, the schedule and the required deliverables, then routed either to the lender's own inspectors (Direct Request) or to RAZE Marketplace coverage. The assigned inspector completes guided capture in the Mobile App: required photos, structured observations and completion criteria, all tied to the request. The report lands in the Inspector Portal in one format, whoever performed the visit. RAZE documents; the lender decides.