Construction Loans in Florida

The building contract is not the full project cost. Include site preparation, permits, professional fees, financing costs and a reserve for changes. In Florida, ask the builder about flood-zone work, wind requirements, drainage and utility connections that affect your specific site.

Loan-to-cost (LTC) compares the loan with eligible project costs. Loan-to-value (LTV) compares it with the lender’s accepted property value, often based on the completed plans. Both tests can limit financing; a higher budget does not guarantee a higher loan.

Organize your figures with our Construction Budget & Draw Planner before requesting a project review.

A commitment reserves financing for an approved project. It does not put the full amount in your account at closing. Match the builder’s payment schedule to the lender’s release conditions before signing the contract.

1. Request the draw

   The designated party submits the approved form, invoices and progress details. Confirm whether deposits or stored materials qualify and whether your equity must be used first.

2. Verify the work

   The lender reviews progress, often through an inspection, plus any required title or lien documents. A funding inspection does not replace municipal inspections or guarantee workmanship.

3. Approve and release

   The lender authorizes eligible funds under the loan agreement. Ask who receives them, how long processing normally takes and what can delay payment.

4. Update the remaining budget

   Reconcile paid costs and funds left to finish. Obtain approval for change orders or reallocations before relying on additional financing.

Retainage is a portion held back until specified conditions are met. Confirm the amount, release requirements and who carries that cost. Neither the loan commitment nor a submitted draw request guarantees immediate payment.

Resolve payment timing before work starts

• Ask whether the builder will accept payment after the approved draw is released.
• Confirm whether the lender can pay the builder directly and whether that fits the contract.
• Hold sufficient approved liquid reserves for unavoidable timing gaps.

Direct payment alone does not accelerate a draw or waive inspection requirements.

Borrower approval does not approve the builder. Submit the proposed contractor before committing to a financing timetable, and confirm the lender accepts the contract type.

Already own the land? Ask how the lender values it, treats existing debt and credits eligible equity. If you intend to manage construction yourself, use our owner-builder financing guide; ordinary builder-led programs may not accept that arrangement.

Finishing the house and satisfying the loan’s completion conditions are separate milestones. Confirm the deadline and required evidence in writing before the first draw.

A single closing does not eliminate conversion conditions, and a planned refinance is not an approval. Fannie Mae’s construction-to-permanent guidance describes requirements for loans delivered to Fannie Mae; other programs may differ.

Compare the construction phase and the permanent mortgage together. Some programs use interest-only payments during construction, commonly based on funds advanced; the loan documents control. As draws accumulate, payments can increase even if the rate stays the same.

• Rate and lock: Is the construction rate fixed or variable? When is the permanent rate set, and what happens if the lock expires?
• Fees: Compare origination, appraisal, draw, inspection, title-update and conversion charges, plus applicable APR disclosures.
• Cash carrying costs: Include taxes, insurance, current housing payments and any required interest reserve.
• Overruns: Identify who supplies extra equity and whether changes require a new appraisal or budget approval.
• Extensions: Confirm maturity, extension availability, fees and revised terms. An extension is not automatic.

For a home built to rent or sell, start with investment-property construction financing. The spec-home guide addresses builds intended for sale before a buyer is secured.

Start with the location, ownership, proposed use, plans, builder, budget and timeline. Tell us what is complete and what remains pending. We can then compare lender requirements and explain which gaps need resolution before an application proceeds.

If the project improves an existing home, compare renovation mortgage options. If only the parcel is ready, begin with the land financing review.