What is a title update on a construction draw?

How a title update works.

When a construction loan closes, the lender's title policy insures its lien as of that day. Each later draw adds money, and the lender wants the same protection for it. Before an advance, the title agent searches the record from the last date covered to the present. If nothing new has been recorded, the insurer issues an endorsement that brings the coverage date forward. The American Land Title Association publishes standard forms for this, including a disbursement endorsement (ALTA 33) issued with each advance under a construction loan policy. Which form applies, and what it covers, is set by the title insurer and the state.

The NCUA's examiner's guide describes the same step from the lender's side: certifying that no intervening liens have arisen since the last advance or title certification, a certification it calls a date-down endorsement to the title policy.

Why it matters for lenders.

A draw inspection and a title update answer two different questions before the same wire. The inspection shows whether the work being paid for is on site. The title update shows whether anyone has recorded a claim against the property since the last advance, such as an unpaid subcontractor's mechanic's lien, which state law can let take priority over later advances. The NCUA guide makes that point, and the FDIC's construction and land development procedures check that disbursements are made only after management reviews written inspection reports, requisite lien searches and title updates.

Lien waivers are the third piece: they release claims for work already paid. See what a lien waiver is for a construction draw. The title update fee is one of the lines on a draw, covered in construction loan draw fees. How often to date down, and on which loans, is the lender's policy and the title insurer's requirement; confirm the details with your title company and counsel.

How RAZE handles it.

RAZE does not search title or issue endorsements; that work stays with the lender's title agent or insurer. RAZE supplies the inspection side of the same draw: the lender orders from the Ordering Engine, and the report carries dated, GPS-stamped photos linked to the draw sheet line items they support, so the file shows what was on site and when, beside the title update for the same advance. The lender decides what funds.