Who performs draw inspections on an FHA 203(k) loan?

Standard 203(k): the consultant inspects.

HUD's Handbook 4000.1 requires a 203(k) Consultant on every Standard 203(k), the rule Mortgagee Letter 2024-13 set. After closing, the rehabilitation money sits in an escrow account and is released in draws. When the borrower asks for a draw, the consultant inspects the work for completion and quality of workmanship and signs the draw request before the lender pays. The consultant also prepares change orders when the scope changes and keeps the lender informed of progress, as HUD's consultant fact sheet describes. HUD's consultant fee schedule, now in the handbook, caps the fee for each draw inspection, and Mortgagee Letter 2026-06 (June 23, 2026) left the number of Standard 203(k) draws unchanged.

Limited 203(k): a consultant is optional.

The Limited 203(k) covers smaller, non-structural repairs. The handbook says it does not require a 203(k) Consultant, though a consultant may be used. Since Mortgagee Letter 2026-06, a Limited 203(k) allows up to four draw requests per contractor, including the initial and final draws. The same letter says the lender is not required to inspect completed work but may, and it limits how many third-party inspections the lender may charge to the borrower. When no consultant is used, the lender's procedures decide who confirms the work is done and what evidence each release needs.

Why it matters for lenders.

The program, not the vendor, decides who signs off. On a Standard 203(k), the lender relies on the consultant's inspection and HUD's forms; a separate inspection does not replace them. On a Limited 203(k) without a consultant, the lender's own policy carries that weight. HUD changes these rules through mortgagee letters, so check Handbook 4000.1 and the latest letters before writing procedure. For 203(k) and HomeStyle side by side, see renovation loan draw inspections.

How RAZE handles it.

RAZE is not a HUD 203(k) Consultant and does not stand in for one on a Standard 203(k). Draw inspections for FHA 203(k) loans are an upcoming RAZE service and not yet available; to ask about them, Talk to Sales. For a lender's other renovation and construction loans, where its policy calls for a third-party draw inspection, a RAZE draw inspection reports percent complete for each draw sheet line, with photos linked to the lines they support and GPS coordinates and date and time stamps on every photo. The inspector documents the work; the lender decides what to release. See what a draw inspector looks for.