FHA construction loan closing cost estimator
First: a complete hypothetical worksheet on a $500,000 build ($100K land + $400K construction), organized like your Loan Estimate — every fee deliberately over-estimated. Then enter your own project cost and watch the same math scale. This is an educational estimate for an FHA one-time-close construction loan — clearly not a quote or a Loan Estimate.
Jim Blackburn · NMLS #1072866 · 7× Scotsman Guide Top Producer · $500M+ closed · (954) 993-1625
The mortgage insurance you should know about
Reviewed by Jim Blackburn, NMLS #1072866.
Upfront MIP — 1.75%
FHA's upfront mortgage insurance premium is 1.75% of your base loan amount, charged once — and it can be FINANCED into the loan, so it need not be cash out of pocket at closing.
Annual MIP — paid over time
FHA loans also carry an annual mortgage insurance premium, paid monthly as part of your payment. It is separate from the one-time upfront premium and is not a closing cost — we walk you through how it fits your monthly budget before you commit.
Seller/builder credit — up to 6%
On an FHA loan, a seller or builder can contribute up to 6% of the price toward your closing costs and prepaids (up to actual charges, never cash back) — which can absorb much of the worksheet below.
A complete hypothetical example — $500,000 build
$100,000 land + $400,000 construction in Florida — a genuinely nice home. Below is what a closing-cost worksheet can look like, organized the way your Loan Estimate organizes it. Every figure is hypothetical and deliberately on the generous side — your real numbers come on your real Loan Estimate.
| Section A — Origination & Lender Charges | Hypothetical |
|---|---|
| Underwriting fee | $1,495 |
| Processing fee | $995 |
| Document preparation | $495 |
| Section B — Services You Cannot Shop For | Hypothetical |
|---|---|
| Construction appraisal (as-completed value) | $1,200 |
| Final completion inspection | $350 |
| Draw inspections (5 × $150) | $750 |
| Credit report | $120 |
| Flood certification | $25 |
| Tax service fee | $85 |
| FHA upfront mortgage insurance premium (UFMIP — 1.75% of the base loan, typically FINANCED into the loan, not cash) | $8,444 |
| Section C — Services You Can Shop For | Hypothetical |
|---|---|
| Title insurance (owner's + lender's) | $3,000 |
| Settlement / closing fee | $795 |
| Survey | $650 |
| Pest inspection | $150 |
| Section E — Florida Taxes & Government Fees | Hypothetical |
|---|---|
| Documentary stamps on the note (0.35%) | $1,750 |
| Intangible tax (0.20%) | $1,000 |
| Recording fees | $350 |
| Section F — Prepaids & Escrows | Hypothetical |
|---|---|
| First year homeowner's insurance | $2,400 |
| Property tax escrow deposit | $1,200 |
| Builder's risk coverage (construction period) | $1,800 |
| Total hypothetical closing costs + prepaids | $27,054 |
| Less: UFMIP financed into the loan | − $8,444 |
| Cash-relevant total | $18,610 |
| Builder/seller credit at 6% of $500,000 | $30,000 |
| Result: the 6% credit MORE than covers every cost above — credits can cover closing costs and prepaids up to actual charges (never cash back) | ✓ Covered |
Fully hypothetical illustration on a fictional property — deliberately over-estimated, not a quote, not an offer, and excluding financing costs that vary by scenario. Your actual figures appear on your Loan Estimate.
Enter any total project cost — see the hypothetical math
Land plus construction, any number you're imagining. This scales the same over-estimated hypothetical worksheet to your figure and shows what a 6% builder/seller credit does to it. Estimates only — never a quote. For your real figures, review your Loan Estimate with our team; reviewed by Jim Blackburn, NMLS #1072866.
FHA mortgage insurance premiums and loan limits are set by the U.S. Department of Housing and Urban Development and are subject to change. Every figure on this page is a hypothetical, deliberately over-estimated illustration — not a quote, not a Loan Estimate, and not an offer. Your actual costs appear on your official Loan Estimate. Jim Blackburn, NMLS #1072866. This page is educational and is not a commitment to lend or a guarantee of approval.