Who pays for a draw inspection?

Who orders, who pays, who the inspector works for.

Three different questions, and they have three different answers.

Who orders. The lender, or the construction loan administrator or fund-control agent acting for the lender. Keeping the order on the lender's side is what preserves independence: the inspector is verifying the borrower's claim, so the borrower should not be choosing or directing the inspector.

Who pays. Usually the borrower, as a cost of the loan. The fee is disclosed in the loan documents and collected in one of three ways: as part of the closing costs, deducted from each draw as it is funded, or invoiced per inspection. Some lenders absorb the fee for certain products or portfolios. There is no single rule; lender policy and the applicable disclosure requirements decide. For a consumer-purpose loan the fee appears on the Loan Estimate among the loan costs.

Who the inspector works for. The lender. Even when the borrower pays, the report is the lender's evidence, and the inspector's scope comes from the lender's criteria.

Why the separation matters.

Draw inspections exist because the party asking for money should not be the party confirming the work is done. If the borrower or builder selects, schedules and pays the inspector directly, that independence erodes, and the report is weaker evidence in a dispute or an exam. Bank supervisors expect construction disbursements to be supported by controls the lender runs; the OCC's Commercial Real Estate Lending booklet lists site inspection among them, and the NCUA's examiner guide tells credit unions to control and manage disbursements so funds are applied to the project as agreed. Who writes the check is secondary; who controls the order and the scope is what counts.

Why it matters for lenders.

Two practical points. First, say it plainly in the construction loan agreement: the lender orders inspections, the borrower bears the cost, and here is how and when it is collected. Second, disclose consistently. For consumer-purpose loans, the fee has to show up where the rules say it shows up; see can draw inspection fees be included in closing costs. For business-purpose loans, the fee schedule in the commitment letter does the work.

How RAZE handles it.

RAZE invoices the institution, not the borrower, and the lender decides how the cost flows through to the loan. Residential pricing is published on the RAZE Rate Card: $125 per single-family inspection when RAZE sends the inspector, or $25 per request with your own, so the amount a lender passes through or absorbs is known before the first order. Orders are placed in the Ordering Engine by the lender's team, and reports are delivered to the lender, which keeps the independence of the inspection intact whoever ends up paying for it.