For construction of a new building or an addition, the 7(a) Lender obtains evidence of compliance with the NEHRP seismic provisions or an equivalent code. Where the construction component exceeds the SOP's threshold and no third-party or internal construction management with funds control is used, it obtains before construction a 100% performance bond and labour and materials payment bond from a Treasury-approved corporate surety naming only the Borrower as obligee, evidence of builder's risk and workers' compensation cover, final plans and specifications, and a fixed-price contract with a licensed contractor barring material changes without lender and surety consent. It verifies any Borrower injection before disbursement, evidence of ability to pay overruns before approving changes, interim and final inspections, code, zoning and permit compliance, completion to plans and lien waivers from all suppliers and contractors (liens with priority can cause repair or denial). Do-it-yourself construction or installation is allowed only where the Borrower is experienced and licensed, the cost is no more than two unaffiliated bids or an independent estimate, and no profit is earned, all documented.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.