Construction Loans > Commercial Construction Loans and Soft Costs

Commercial Construction Loans and Soft Costs

Soft Costs Are the Non-Brick and Mortar Expenses

When underwriting a commercial construction loan, ther are four major categories of costs: the land cost, the hard costs, the soft costs, and the contingency reserve reserve.

The soft costs are the costs that you cannot visibly see. Soft costs include the architect's fees, the engineering reports and fees, the appraisal fee, the toxic report fee, any government fees - including the plan check fee, the cost of the building permit, any assessments, and any sewer and water hook-up fees - plus the financial costs, such as construction period interest and loan fees.

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