HUD 221(d)(4) Replacement & Construction Cost Estimates
Before beginning the HUD multifamily construction loan process, it's important to know how much your project will cost to build (construction cost), and how much it will take to replace (replacement cost).
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 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).
