Certificate of Occupancy CO

Who issues it and what it proves.

The building department that issued the permit issues the certificate of occupancy, after the final inspections it requires: building, electrical, plumbing, mechanical and, in many jurisdictions, fire and site. The certificate says the structure complies with the code it was permitted under and may be occupied for its intended use. It does not say the house matches the plans the lender approved, that the punch list is done, or that the contractor has been paid; those are the lender's checks.

A temporary certificate of occupancy allows occupancy while listed items are finished and carries its own expiration date. Lenders treat it as a condition met in part, not in full.

Where the draw inspection fits.

The final draw inspection confirms the certificate has been issued, usually by photographing it or recording its number, and documents the rest of the final stage: punch list items, site cleanup, appliances and fixtures in place, the house matching the approved plans. What is the difference between a draw inspection and a final inspection? separates the lender's final inspection from the municipality's.

Why it matters for lenders.

Agency and secondary-market guides require the lender to verify that the improvements are complete before a construction loan converts or is delivered, and the certificate of occupancy is the standard piece of evidence that the work is complete and legal to occupy. Fannie Mae's Selling Guide sets the completion-verification requirement, and the VA Lenders Handbook describes construction inspections through to the final one. Converting a loan, or funding the last draw, without the certificate leaves the lender holding a house that cannot be lived in.

How RAZE handles it.

A RAZE final inspection documents the certificate, the completed line items and any open punch items with photos tied to each line. The release of the final draw and any holdback stays with the lender.