Construction Cost Estimates

Direct Construction Costs 

Direct construction costs for a multifamily project can be placed into several groups, including: 

• Land improvements, including:

  • Unusual land improvements

  • Other land improvements

• Structure costs, including:

  • Main building

  • Accessory building

  • Garages

• Builder/contractor fees, including:

  • General requirements

  • Builder's general overhead costs

  • Builder's profit (see BSPRA)

  • Bond premium

  • Other fees

Architectural Fees and Financing Costs 

Non-direct construction expenses include architectural fees for design and supervision, as well as financing costs. Financing costs and carrying charges for a project include: 

• Taxes

• Builder's risk insurance

• FHA mortgage insurance premium (MIP)

• FHA exam fee

• Financing fee

• Legal fee & application fee

• Permanent placement fee

• HUD-eligible bond financing fees

• AMPO (N.P. Only)

• Title & recording

Legal, Organization, and Audit Fees

Other kinds of expenses in the construction process can consist of legal, organizational, and audit fees. These include: 

• Borrower legal fees

• Organizational costs

• Cost certification audit fee

• 3rd party HUD multifamily appraisal

• 3rd party market study

• 3rd Party - Environmental assessment (Phase I, VIA, Noise)

• 3rd Party - Arch / Cost

• 3rd Party - Energy audit

• 3rd Party - Instrustive testing

• 3rd Party - Other / LEAD consultant

• 3rd Party - PCNA / PIR / other

Other Related Costs

• Consultant fee (N.P. only)

• Contingency reserve (Sec 202 or rehab only)

• Tenant relocation expenses (rehab only)

• FF&E (furnitures, fixtures, and equipment)

Replacement Cost Estimate

An estimated replacement cost can be calculated by examining factors including the warranted price of the fully improved land, the as-is property value (for rehabs), and off-site factors (if needed, for rehabs). 

Download Our Replacement and Construction Cost Estimate

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In this article:

1. Construction Cost Estimates
2. Direct Construction Costs 
3. Architectural Fees and Financing Costs 
4. Legal, Organization, and Audit Fees
5. Other Related Costs
6. Replacement Cost Estimate
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8. Get Financing