Architectural Document & Cost Reviews

When a lender or equity investor commits capital to a multifamily construction or rehabilitation project, they are making a bet that the project will be built as proposed — on time, on budget, and in compliance with the requirements of the financing. An Architectural Document & Cost Review is how they verify that bet before they close.

NAC’s Architectural Document and Cost Reviews are conducted by a licensed architect with 21 years of experience in construction, real estate development, and building assessment. That credential is not incidental — it is the foundation of the service. Reviewing a construction budget for cost reasonableness, evaluating a contractor’s qualifications, assessing whether a project schedule is achievable, or identifying gaps in the contract documents requires the kind of technical judgment that only comes from deep architectural and construction experience. NAC brings that judgment to every engagement.

We perform Architectural Document and Cost Reviews for LIHTC equity investors, construction lenders, and permanent lenders on new construction and rehabilitation transactions nationwide — under HUD, Fannie Mae, Freddie Mac, USDA RD, and State LIHTC QAP requirements. Every review is tailored to the specific protocol, the specific transaction, and the specific risk profile of the client commissioning it.

What We Review

A thorough Architectural Document and Cost Review touches every component of the project that affects cost, schedule, quality, and compliance. NAC’s reviews typically include the following:

Plans and Specifications We review the architectural and engineering drawings and specifications for completeness, coordination, and compliance with the applicable building code, accessibility requirements, and program-specific design standards. For LIHTC transactions, this includes verification that the plans reflect the amenities, unit mix, and accessibility features required by the state QAP and the partnership agreement. For HUD, Fannie Mae, and Freddie Mac transactions, it includes confirmation that the design meets the applicable agency design standards. For properties where construction monitoring will continue after closing, see NAC’s Construction Progress Monitoring services.

Schedule of Values Analysis The Schedule of Values is the contractor’s line-item breakdown of the construction budget. NAC analyzes the SOV for cost reasonableness — evaluating whether the line-item costs are consistent with current market conditions for the project type, location, and scope. We identify line items that appear over- or under-funded, flag lump-sum entries that lack sufficient detail for monitoring purposes, and assess whether the overall budget is adequate to complete the scope of work as designed. An unreasonable SOV is one of the most common — and most costly — problems in construction lending, and it is almost always identifiable before closing if someone is looking carefully.

AIA Contract Review The construction contract defines the rights and obligations of the owner and contractor and establishes the framework for every decision made during the construction process. NAC reviews the AIA contract documents for completeness, identifies provisions that may create risk for the lender or investor, and confirms that the contract terms are consistent with the financing documents and the project scope. We flag missing provisions, problematic change order language, inadequate notice requirements, and other contract terms that have a history of generating disputes.

Bond and Insurance Review Performance and payment bonds protect the lender and owner if the contractor fails to complete the project or fails to pay subcontractors and suppliers. NAC reviews the bonding and insurance documents to confirm that coverage is adequate for the project scope, that the bonding company meets the required rating thresholds, and that the bond form is appropriate for the transaction. Inadequate bonding is a risk that surfaces repeatedly in distressed construction projects — it is far easier to address before closing than after.

Contractor Qualification Review Not every contractor is equipped to successfully complete every project. NAC evaluates the general contractor’s relevant experience, financial capacity, and organizational structure relative to the demands of the proposed project. For LIHTC and affordable housing transactions in particular — where the regulatory requirements, compliance obligations, and reporting demands are more complex than standard commercial construction — contractor qualification is a meaningful risk factor that deserves careful evaluation.

Schedule Feasibility Review A construction schedule that isn’t achievable isn’t a schedule — it’s a source of future disputes, cost overruns, and tax credit delivery risk. NAC reviews the proposed construction schedule for feasibility, assessing whether the sequencing is logical, whether the durations are realistic for the scope and project type, and whether the schedule accounts for known risks like weather, long-lead procurement items, and regulatory approvals. For LIHTC transactions where credit delivery deadlines are fixed, schedule risk is directly tied to financial risk, and it deserves to be underwritten explicitly.

Survey Review When a survey is provided as part of the due diligence package, NAC reviews it in the context of the project scope — confirming that the site boundaries, easements, encroachments, and access conditions are consistent with what the plans and budget assume. Survey issues that are invisible in the documents often become expensive problems in the field.

LIHTC Transactions

For LIHTC new construction and rehabilitation transactions, the Architectural Document and Cost Review serves a specific and critical function — it gives the equity investor an independent assessment of whether the project can be built as proposed for the money in the budget, and whether the completed project will deliver the credits that have been underwritten.

NAC understands the LIHTC transaction from the inside. We know what state QAPs require, how LIHTC rehabilitation scopes are structured, what reasonable costs look like for affordable housing construction in different markets, and where the risks tend to concentrate in LIHTC deals. Our reviews are written for equity investors and lenders who need to make informed decisions — not to tell developers what they want to hear.

For syndicated LIHTC transactions, NAC’s reviews address the specific concerns of the equity investor — credit delivery risk, scope compliance, accessibility requirements, and construction cost reasonableness — in a format that supports the investor’s internal underwriting and approval process.  For LIHTC transactions in flood-prone or high-hazard markets, NAC also offers Property Resilience Assessments that can be bundled with the ADCR scope.

Fannie Mae and Freddie Mac Transactions

For Fannie Mae and Freddie Mac new construction and substantial rehabilitation transactions, NAC prepares Architectural Reviews that meet the specific requirements of each agency. Our reviews confirm that the project design meets applicable agency standards, that the construction budget is reasonable and complete, and that the contractor and project team are qualified to deliver the project as proposed.

HUD Transactions

For HUD-assisted new construction and substantial rehabilitation transactions, NAC’s Architectural Document and Cost Reviews are prepared in accordance with HUD MAP requirements. Our reviews evaluate contractor qualifications, construction cost reasonableness, contract terms, and schedule feasibility in the format and with the level of detail that HUD MAP lenders require.

Services Available

• Architectural Document and Cost Reviews — LIHTC / State QAP
• Architectural Document and Cost Reviews — HUD
• Architectural Document and Cost Reviews — Fannie Mae
• Architectural Document and Cost Reviews — Freddie Mac
• Architectural Document and Cost Reviews — USDA RD

Not sure which review your transaction requires? Contact NAC to discuss your specific protocol and scope.