So...we have a loan officer that wants to use the Construction Cost Calculation method of determining the insurable value of a house to be constructed in a SFHA. He will be using the building costs that are estimated by the borrower. All of these costs are documented in the loan file.

Is it really as simple as that? Or should we be considering something else? I can't find anything that says how the Construction Cost Calculation method should be calculated - I've looked in the Interagency Questions and Answers and on FEMA's website and documents.

BTW - we do have an appraisal that we could use to determine ACV but it is higher than using this method.

Thanks!!

I always used Marshall and Swift cost calcs. The appraisal (on new construction) should be RCV...there shouldn't be any depreciation as of yet to calculate an ACV.