Most people know that a home inspector inspects homes for buyers and sellers. Less-familiar inspections are the draw inspection. This type of inspection is provided for residential and commercial projects as part of a construction loan for banks and other financial institutions.
For those who have never heard the term draw inspection, here is a quick overview: The draw inspection is one type of inspection that is frequently performed by a home inspector. While not as common as residential home inspections for buyers or sellers, the draw inspection is completed for the benefit of a lender. When banks, credit unions, etc., make construction loans, they need to confirm that funds are being paid out and that work is being completed in a timely manner.
To protect themselves and their investor’s money, these financial institutions will contract with appraisal or inspection firms to give (usually on a month-to-month basis) updates on the progress of the project. It works like this:
The builder turns paperwork into the lender stating what work has been completed and requesting the funds that he/she expects to have “released” to the company account.
The draw inspector is called in, on the bank’s behalf, as an impartial party to see that said work was actually completed by the builder.
The draw inspector will assess the progress and take photos of various systems and components: footings, foundation, power hookups, landscaping, siding, roofing, trusses, floors, etc.
Really, if you can name it, and the bank has budgeted for it, then the inspector will most likely be asked to look at it during one or more of the draw inspections that takes place over the (usually several) months that the home is being built from the ground up.