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Estimate of Replacement & Construction Costs

Replacement and Construction Costs for HUD 221(d)(4) Loan Projects Everything you need to know about replacement and construction costs for multifamily projects using HUD 221(d)(4) financing.

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
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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 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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          TO LEARN MORE ABOUT HUD 221(D)(4) LOAN OPTIONS, FILL OUT THE FORM BELOW AND A HUD LOAN EXPERT WILL GET IN TOUCH.

          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

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HUD 221(d)(4) Loans

HUD 221(d)(4) Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, OpportunityZones Help and Groundbreaker.

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