5.3.3.5 Construction Costs

A. Costs of the work items (estimates) must be provided in the CNA e-Tool, except for LIHTC transactions.

B. When a General Contractor is hired, the costs in the CNA e-Tool should reflect the price proposal (bid) and the bids uploaded as attachments.

C. The Lender must ensure that the Needs Assessor has reviewed the General Contractor’s cost estimate with the assessor’s own independent cost estimate.

8 For example, the architect’s plans show new replacement windows on the building elevations drawings indicating location and style, along with a schedule that describe types, sizes and installation details, and in specifications prescribe material and thermal performance requirements. The Needs Assessor should show it as a work item in the Non-Critical Repairs list describing it as window replacement, and indicate Class of Work, location, type and quantity. The needs assessor may choose to list the replacement as multiple work items, distinguished by sizes, types or other significant distinction such as location and material.

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D. When a Project Architect and/or the General Contractor are involved, form HUD-2328 is not to be used to report the costs by the General Contractor for 223(f) transactions[9] . Instead of the HUD -2328, costs may be organized and reported in the CNA e-Tool as follows:

1. The contractor's price proposal (bid) should be captured in the CNA lists of repairs and alterations. The contractor’s bid should be expressed as a certain dollar amount per appropriate unit of measure of the associated Alternative of the Component to be repaired or replaced.[10]

2. Only the hard costs should be reflected in the CNA e-Tool Repairs lists. Soft costs, if any, should be separately itemized and reported. Soft costs include any architectural fees, General Contractors overhead, profit and general requirements, etc. See Appendix 5, Section A.5.12 for the 223(f) Repairs & Alterations Cost Worksheet[11] that properly organizes and reports the summary of costs.

3. The total cost of repairs and alterations that includes both the hard and soft costs should be reported on form HUD-92264-A, lines 7b and 10b.

4. No fees payable to identity of interest contractors are mortgageable. Justified and itemized general requirements are mortgageable.