Construction Loans in Florida
Whether you are building on your own lot, buying land to build, or taking on a major renovation, construction financing pays for the work in stages and then becomes your long-term mortgage. We help you choose the structure that fits the project and keep it on schedule.
Financing that follows the build
A construction loan funds a project in stages, called draws, as work is completed and inspected, rather than paying a lump sum at closing. During construction you typically pay interest on the amount drawn so far. When the home is finished, the loan converts to, or is replaced by, a permanent mortgage.
The lender is underwriting three things at once: you, the builder, and the finished home. Plans, a detailed budget, a construction contract, permits, and an as-completed appraisal all become part of the file. Florida adds its own considerations, from building code and wind-load requirements to flood-zone elevation and insurance during construction.
Four common ways to finance a build or renovation
Construction-to-permanent (single close)
One application and one closing covers both construction and the permanent mortgage, with terms set up front. The loan converts automatically when the home is complete.
Two-time close
A short-term construction loan, then a separate mortgage when the home is finished. More flexibility on the final loan, but two sets of closing costs and requalification.
Renovation loans
For buying or refinancing a home that needs work. FHA 203(k) is for owner-occupants; Fannie Mae HomeStyle can also serve second homes and investment properties.
Investor ground-up construction
Business-purpose financing for building to sell or rent, underwritten on the project, budget, and your experience.
Structure that protects the project
One closing option
A single-close loan can lock in the permanent loan terms before construction begins and avoid a second closing.
Land can count
If you already own the lot, its value may help satisfy part of the equity requirement, depending on the program.
Interest on what is drawn
During construction, interest is typically charged only on funds that have been disbursed.
Build to Florida standards
Plans, permits, and inspections tie the financing to code-compliant construction suited to Florida's climate.
Protected disbursements
Draws are released against completed, inspected work, which helps keep the budget and builder accountable.
A clear budget up front
Lenders require a detailed cost breakdown and often a contingency, which helps you plan for overruns.
What goes into a construction file
Requirements vary by program and lender. These are the common building blocks.
- Borrower
- Credit, income, assets, and reserves, the same as a purchase, plus funds for any costs above the loan amount.
- Builder
- License, insurance, experience, and references. Many lenders approve the builder as part of the loan.
- Plans and budget
- Construction plans, specifications, a fixed-price or cost-plus contract, a line-item budget, and a contingency reserve.
- Land
- Lot ownership or purchase contract, survey, title, zoning, and permit status.
- Valuation
- An appraisal based on the as-completed value of the home, using plans and specifications.
- Florida items
- Building permits, flood-zone and elevation requirements, and builder's risk insurance during construction.
What to gather
Start collecting these as soon as you are serious about building.
Lot deed or land purchase contract, and a recent survey
Construction plans and specifications
Signed construction contract and itemized budget
Builder's license, insurance certificates, and references
Your income, asset, and credit documents
Permit applications or approvals, and flood-zone information
From plans to keys
Project review
We talk through the land, the build or renovation, your timeline, and whether you will live in the home.
Choose the structure
Compare single-close, two-time close, renovation, or investor financing.
Builder and budget review
The lender reviews the builder, contract, plans, and itemized budget.
Appraisal and approval
An as-completed appraisal and full underwriting lead to loan approval.
Closing and draws
After closing, funds are released in draws as inspected work is completed.
Completion and conversion
A final inspection confirms completion, and the loan converts to, or is replaced by, the permanent mortgage.
Single-close vs. two-time close
The two most common structures for building a home you will live in.
| Feature | Single-close construction-to-permanent | Two-time close |
|---|---|---|
| Closings | One | Two |
| Permanent loan terms | Set at the start | Set at the second closing |
| Closing costs | One set | Two sets |
| Requalification | Only if specified changes occur | Required for the permanent loan |
| Rate flexibility | Less, terms set up front | More, but exposed to rate changes |
| Best fit | Buyers who want certainty | Buyers who want flexibility on the final loan |
Construction Loans FAQs
What is a construction-to-permanent loan?
It combines construction financing and the long-term mortgage in one loan with one closing. Under Fannie Mae’s single-closing guidelines, the loan converts to the permanent mortgage when construction is complete.
How long can construction take?
It depends on the program. For Fannie Mae single-closing loans, no single construction period may exceed 12 months, and the total may not exceed 18 months. Other programs set their own limits.
Can I be my own builder?
Most lenders require a licensed, insured builder they approve. Owner-builder financing is limited and lender-specific.
Can I finance a renovation instead of a new build?
Yes. Renovation programs such as FHA 203(k) for owner-occupants and Fannie Mae HomeStyle for broader occupancy types finance the purchase or refinance and the improvements together.
Does owning my lot help?
Often. Depending on the program, equity in a lot you already own may count toward the required contribution.
Can investors get construction loans?
Yes, through business-purpose programs underwritten on the project, budget, exit plan, and experience. See our fix and flip and private money pages for related options.
Plan your build with the right financing
Share your lot, plans, builder, and timeline. We will help you compare construction structures and prepare a complete file.
Important disclosures
Mortgage by Julia is not affiliated with or endorsed by the U.S. government, the U.S. Department of Housing and Urban Development, the Federal Housing Administration, the U.S. Department of Veterans Affairs, the U.S. Department of Agriculture, or any other government agency.
Programs, rates and requirements are subject to change and borrower qualification. This is not a commitment to lend.