What are Construction Draw Inspections?
A construction draw inspection is a process in which DSS reviews the progress of a construction project in order to verify that the work has been completed as specified in the construction loan agreement. These inspections are typically required by lenders as a condition of releasing funds, also known as “draws,” to the borrower to pay for the work.
There are several important steps that are taken during a construction draw inspection:
1. Review project documents: The first step in a construction draw inspection is to review the project documents, including the construction loan agreement and the construction plans and specifications. This helps to ensure that the work being inspected meets the requirements of the loan agreement.
2. Visit the construction site: The next step is to visit the construction site to observe the work that has been completed. The inspector should verify that the work meets the requirements of the construction plans and specifications and that it is of good quality.
3. Review the project schedule: The inspector should also review the project schedule to ensure that the work is being completed on time. Delays can impact the project budget and may require additional funding from the lender.
4. Review the project budget: The inspector should also review the project budget to ensure that the costs of the work being completed are in line with the budget and that the borrower is not overspending.
Construction draw inspections are required by lenders in order to verify that the work being completed on a construction project meets the requirements of the loan agreement and that the project is on track to be completed on time and within budget. These inspections help lenders to manage risk on construction projects and to make informed decisions about releasing funds to the borrower.