Understanding Progress Advance Inspections
What is a Progress Advance Inspection?
A Progress Advance Inspection (also known as a construction draw inspection or progress draw appraisal) is a site inspection and report prepared during the construction or renovation of a property. It determines the percentage of completion of a residential or commercial project and confirms whether the work completed justifies the next advance of construction funds from a lender.
These inspections are typically required by banks, credit unions, mortgage brokers, and private lenders to protect against overpayment and ensure funds are released in step with actual progress on site.
Key Objectives of a Progress Advance Inspection
Verify that construction is progressing in accordance with plans and timelines.
Confirm that funds already advanced have been used appropriately.
Estimate the value of completed work and determine how much of the total construction is complete.
Provide a recommendation to the lender for the release of the next draw based on progress.
What is Included in a Progress Advance Inspection?
Site Visit & Visual Inspection – Physical review of the property to assess current stage of construction.
Photographs of Completed Work – Interior and exterior images to support the percentage of completion.
Percentage Complete Estimate – A breakdown of progress for major components (foundation, framing, exterior, interior, mechanical, finishes, etc.).
Comparison to Construction Schedule or Budget – Evaluation of progress relative to expected timelines or submitted cost breakdowns.
Verification of Building Stage Milestones – Examples:
Footings & foundation complete
Lock-up stage (roof, doors, windows installed)
Insulation and drywall in place
Interior finishing underway
Substantial completion (move-in ready)
Draw Recommendation – A recommendation to the lender indicating whether a funding advance is supported and if so, what percentage or amount.
When is a Progress Advance Inspection Needed?
New home construction
Major renovations or additions
Modular or prefabricated home placements
Commercial or mixed-use construction projects
Custom home builds on private or leased land
What is NOT Included in a Progress Advance Inspection?
Detailed Building Code or Safety Inspection – Not a replacement for municipal inspections.
Valuation of the Finished Property – This is not a full market value appraisal unless requested.
Verification of Material Quality or Workmanship – The report confirms completion, not quality assurance.
Cost Audits or Contractor Reviews – It does not verify actual invoices or financial records.
Why is a Progress Advance Inspection Important?
Protects Lenders & Clients – Ensures that funds are disbursed appropriately and not ahead of schedule.
Prevents Overpayment – Reduces risk of financial exposure if work is delayed or incomplete.
Supports Transparent Communication – Keeps borrowers, lenders, and builders aligned on construction status.
Essential for Draw-Based Financing – Required at key milestones in lender-managed construction loans.
A professionally conducted progress advance inspection provides trusted, objective documentation of construction status, ensuring that projects are built—and funded—on solid ground.