Draw Inspections: Fees, Timing, and What Holds Up a Draw

On a build or a heavy rehab, money is released against completed work. Before each release someone verifies the work is actually there. That verification is the draw inspection, and it is the step that most often decides whether your schedule holds.

The mechanics of the schedule itself are in construction loan draw schedules; this page is about the inspection that sits between you and each payment.

What the inspector is confirming

Not quality, and not code compliance. That is the building inspector's job and a different visit entirely. The draw inspector confirms percentage of completion: that the line items you have billed for are done to the stage you say they are.

What it costs and who pays

A per-draw fee, paid by the borrower, usually deducted from the draw itself rather than billed separately. It is a third-party cost, not a lender margin line. See points and origination fees for how to separate the two on any quote.

The practical consequence: more draws means more inspection fees. Five draws cost more in inspections than three. Against that, fewer draws means carrying more of the work on your own cash between releases. That trade is worth deciding deliberately at closing rather than discovering at draw three.

The four things that stall a draw

• Billing ahead of the work. The most common cause. If you bill 60% and the inspector finds 45%, the draw funds at 45% and you have a gap to cover.
• Unreleased liens. A subcontractor who has not signed off can hold up the release even when the work is finished.
• Scope drift. Work that is not on the approved budget does not draw against it, however necessary it turned out to be.
• Scheduling. The inspection has to be booked, attended, and reported. That is real calendar time, and it repeats every draw.

How to keep draws moving

Bill slightly behind where you actually are. Keep lien releases current as you go rather than at the end. Ask for the inspection as the work closes out, not after. And build the inspection cycle into your build schedule from the start, because a build financed on our ground-up terms runs 12 to 24 months and every stalled draw eats into that.

Size the build itself in the construction loan calculator.

Terms are set in underwriting. Not a commitment to lend.