On a new construction home, the buyer pays for the appraisal. The lender orders it to protect its own collateral, then passes the cost through as a closing-cost line item on your loan — typically $400 to $700 for a standard single-family build, with complex designs or high-cost markets pushing past $1,000. Builder closing-cost credits often erase the expense in practice, but the contract puts the fee on you.
Why the Fee Lands on the Buyer
Your lender requires an appraisal to confirm the finished home will be worth enough to secure the loan and keep the loan-to-value ratio in range. Because the appraisal protects the lender’s collateral, you might expect the lender to absorb the cost. It doesn’t. The charge flows through to you as part of your loan fees.
Federal law also controls who gets to pick the appraiser. The Valuation Independence Rule, part of the Truth in Lending Act, makes it illegal for anyone with a financial interest in the transaction — the builder, the real estate agent, or the loan officer — to pressure or influence the appraiser’s conclusions.1Office of the Law Revision Counsel. 15 USC 1639e – Appraisal Independence Requirements The lender selects the appraiser, often through a third-party appraisal management company, and you pay the resulting fee.
How Much a New Construction Appraisal Costs
A standard appraisal on an existing home runs roughly $350 to $425. New construction costs more because the appraiser works from architectural plans, building specifications, and plot maps rather than a finished house. The report is written “subject to completion,” estimating what the home will be worth once built on the designated lot.2Fannie Mae. Requirements for Verifying Completion and Postponed Improvements The appraiser analyzes blueprints, verifies specs, and often makes multiple site visits.
For a straightforward single-family new build, expect $400 to $700. Larger or more complex homes, and homes in major metros or remote rural areas, can run $800 to $1,200 or more. A 4,000-square-foot custom build with unusual features costs more to appraise than a 1,500-square-foot production home in a subdivision.
Loan type matters too. VA appraisals follow a state-by-state fee schedule and add $50 for proposed or under-construction properties.3Veterans Benefits Administration. VA Appraisal Fee Schedules and Timeliness Requirements FHA appraisals carry higher fees because of stricter inspection requirements. If you don’t pay the appraisal fee, the lender can’t move the loan forward; there is no workaround.
How Builder Credits Can Cover Your Appraisal Fee
Many builders offer closing-cost credits as a sales incentive, and those credits can zero out the appraisal expense at closing. The mechanics are simple: the lender still charges you for the appraisal, but at the closing table the builder’s credit offsets that charge along with other closing costs. The credit is usually written into the purchase contract as a “Closing Cost Contribution” or “Settlement Credit.”
Most builders tie these credits to using their in-house or “preferred” lender. The arrangement is legal, but the builder must give you a written disclosure explaining the business relationship with the lender, and the builder can’t require you to use that lender as a condition of the sale.4Consumer Financial Protection Bureau. 12 CFR 1024.15 – Affiliated Business Arrangements You keep the right to choose your own lender, though you may lose the credit by walking away from the preferred one.
Federal rules also cap how much a builder or seller can contribute. For conventional loans backed by Fannie Mae, the cap depends on your down payment:5Fannie Mae. Interested Party Contributions (IPCs)
- Under 10% down (LTV above 90%): up to 3% of the sale price.
- Between 10% and 25% down (LTV 75.01%–90%): up to 6%.
- 25% or more down (LTV 75% or less): up to 9%.
FHA loans cap seller contributions at 6% of the sale price regardless of down payment. Appraisal fees are a small fraction of total closing costs, so most builder credit packages absorb them easily. Verify the exact credit amount and what it covers on your Loan Estimate so you can see the appraisal fee treated as expected.6Consumer Financial Protection Bureau. Loan Estimate Explainer
Extra Appraisal Costs on Construction-to-Permanent Loans
If you’re building with a construction-to-permanent loan — sometimes called a “one-time close” or “single-close” loan — you’ll pay for at least two rounds of appraisal work. The first is the “subject to completion” appraisal based on your plans and specs, which the lender uses to approve the loan before any ground is broken.
Once construction finishes, the appraiser returns to confirm the home matches the original plans and documents the result on Fannie Mae Form 1004D, the Appraisal Update and Completion Report.2Fannie Mae. Requirements for Verifying Completion and Postponed Improvements That completion inspection typically costs $150 to $300 on top of the original appraisal fee, and you pay it.
When a Second Full Appraisal Is Required
If construction takes longer than 12 months from the date of the original appraisal, Fannie Mae requires an entirely new appraisal, not just an update. The original report expires and can’t be extended.7Fannie Mae. Appraisal Age and Use Requirements That can roughly double your appraisal costs, so delays carry a real cash penalty. Single-close construction-to-permanent loans may have a limited exception; confirm the details with your lender early.
Even inside 12 months, an appraisal more than four months old requires an update: an exterior inspection with a market analysis confirming the value hasn’t declined.7Fannie Mae. Appraisal Age and Use Requirements If the update shows the value has dropped, the lender has to order a completely new report.
Change Orders During the Build
Upgrades or changes you make during construction — adding a garage bay, finishing a basement, swapping materials — can shift the home’s value from what the original appraisal projected. Most lenders require you to report change orders because they can affect your loan-to-value ratio. If the modifications are significant, the lender may order an updated appraisal at your expense before releasing further construction draws.
FHA and VA Appraisal Rules
Government-backed loans add documentation and sometimes inspections, but the buyer still pays in every case.
FHA
FHA requires more paperwork than conventional loans on new construction, including a Warranty of Completion (HUD Form 92544) from the builder and the builder’s certification of plans and specs.8HUD. Mortgagee Letter 2020-36 Depending on how far along construction is when the appraisal is ordered, FHA may require up to three inspections at the footing, framing, and final completion stages. FHA appraisals are valid for 180 days from the effective date, extendable to one year through an update.9HUD. FHA Implements Revised Appraisal Validity Period Guidance Past one year, you need a new appraisal.
VA
VA loans use a fee schedule set by the Department of Veterans Affairs, with maximums that vary by state and county, plus the $50 add-on for proposed or under-construction properties.3Veterans Benefits Administration. VA Appraisal Fee Schedules and Timeliness Requirements The appraisal produces a Notice of Value, and the builder must hold a valid VA builder identification number before that notice can be issued. One borrower protection worth knowing: the VA bars late fees from being charged to the veteran if a billing delay occurs between the lender and the appraiser.
When You Actually Pay
Timing depends on the lender. Many collect the appraisal fee upfront by credit card or electronic transfer when the appraisal is ordered, which ensures the appraiser gets paid whether or not the loan closes. If you pay early, the fee may show on your Closing Disclosure as a “Paid Outside of Closing” (POC) item — collected already, not due again at the table.
If the lender doesn’t collect it in advance, it appears as a line item on your Closing Disclosure, which must be delivered to you at least three business days before closing.10eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions If builder credits are in play, you’ll see the appraisal charge in one column and the offsetting credit in another.
Your Copy of the Report and What to Do if the Value Comes In Low
Even though the lender orders the appraisal, you’re entitled to a free copy. Under Regulation B, which implements the Equal Credit Opportunity Act, the lender must give you every appraisal and written valuation developed in connection with your loan application, promptly after completion or at least three business days before closing, whichever comes first.11Consumer Financial Protection Bureau. 12 CFR 1002.14 – Rules on Providing Appraisals and Other Valuations You get the copy whether the loan is approved or not and whether you close or not.
If the appraised value comes in below the contract price, or you believe the report contains errors or missed comparable sales, you can ask your lender to submit a Reconsideration of Value request. Federal interagency guidance allows lenders to initiate that process based on specific, verifiable information you provide, such as comparable properties that weren’t considered, incorrect property details, or unsupported valuation methods.12Federal Register. Interagency Guidance on Reconsiderations of Value of Residential Real Estate Valuations A general feeling that the home is worth more won’t move the needle. The appraiser independently decides whether to adjust. Reconsideration itself usually carries no extra fee, but if the lender decides a brand-new appraisal is needed, that one is on you.