Draw inspection fraud: How AI can scam Private & Hard Money Lenders

What if your next $30,000 draw funded a lie?

Hard money and private construction lenders operate in a fast-paced, high-stakes world. Draw inspections are a critical trust checkpoint, one of the few moments where lenders can confirm progress and release funds. 

But in the age of AI, that “progress” can be convincingly fabricated.

Freely available generative AI tools now make it disturbingly easy to create fake images of home renovations, cosmetic upgrades, and even structural improvements. With a few taps, a borrower or contractor can produce false visual evidence of work that’s never been done, triggering a draw and draining funds.

In this post, we’ll show just how easy it is, and test your eye on fake AI-generated draw inspections.

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The new face of draw fraud: manufactured progress with AI

Real estate fraud isn’t new, but the attack surface has evolved.

According to the American Association of Private Lenders (AAPL), most fraud attempts were typically clerical—discrepancies in documents, rushed closings, or strange wire requests. These are frustrating but relatively easy to catch with experience.

Today, generative AI fakes can fool even seasoned professionals. They don’t raise alarms because signs are not as easy to spot as a typo. And they’re created in minutes.

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Can you spot which of these are real vs AI-generated?

Watch each video below and click the button underneath each to check your answer.

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Sample 1

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Sample 2

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Sample 3

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Sample 4

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Sample 5

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Sample 6

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Sample 7

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Sample 8

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How fake construction photos are created in minutes

Anyone with a smartphone and access to OpenAI’s ChatGPT or Google Gemini can create convincing fraudulent media. Here's how it works:

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This process takes less than 10 minutes and costs virtually nothing. No expensive Photoshop license or design skills required. No technical know-how. And the telltale signs that this is generated by AI, become fewer and harder to spot with every product update. 

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Taking a real image can also produce fake video walkthroughs. Here's how a single image can be used to fake different video walkthroughs showing different stages of completion.

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Why traditional draw inspections can’t detect AI fraud

This kind of visual fraud is already happening, but it’s often under the radar. The industry is familiar with "misleading" images; photos of the same wall or cabinet from different angles, drywall documented only on one wall instead of four, or shots from a completed project recycled across multiple homes.

But today with AI, misleading images can be manufactured.

Self-initiated borrower inspections, while convenient, are vulnerable to abuse if not secured. If your platform doesn’t verify image authenticity at capture, you may have already approved a draw based on an AI-faked image.

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Preventing draw inspection fraud with Truepic Vision

Truepic Vision is the purpose-built platform for securing draw inspections in the AI era. It’s designed to eliminate fraudulent progress photos while preserving the speed and simplicity your borrowers expect.

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Whether you’re financing a quick rehab or overseeing dozens of concurrent fix-and-flip projects, Truepic helps you scale without sacrificing certainty.

"Our customers love having control over the speed of the inspection process, and Truepic Vision gives us the ability to offer a quicker turnaround time without compromising integrity."
— Jacob Sherick, Senior Manager, Kiavi

Don’t wait until fraud drains your portfolio

The next borrower who misleads you won’t need to be malicious—they’ll just need to be curious enough to open an AI app.

If your draw process isn’t protected by Truepic Vision, it’s not protected at all. See Truepic Vision in action for draw inspections in the brief demo below, and contact us to learn more.