New Construction Mortgage Florida
Construction loans finance your new Florida home build — without using the builder's preferred lender. As your independent Florida mortgage broker, we shop for the best rate the builder's lender won't offer you.
A construction loan finances building a new Florida home or a major rebuild, funding the project in draws as work is completed, then converting to a permanent mortgage at completion. A construction-to-permanent structure covers both the build and the end loan in one closing. NMLS# 1859012.
Don't Use the Builder's Preferred Lender
Florida's builder-affiliated lenders offer incentives: closing cost credits, appliance upgrades, rate buydowns — to steer you toward their preferred lender. The problem is those incentives often cost more in lifetime interest than they save upfront.
Official resource: CFPB: Mortgage Resources.
As an independent Florida mortgage broker, Mortgage Capital isn't tied to any builder. We shop dozens of lenders and routinely find rates 0.25–0.75% below the builder's lender. That adds up to thousands in savings a year. We also handle the extended rate locks (60–90 days) that new construction closings need.
We're active in every major Florida builder market. That includes Palm Beach County's communities in Westlake, Avenir, and Arden; Broward County's new developments; St. Lucie County's Tradition and Riverland; and Martin County's new builds in Palm City and Hobe Sound.
Dig Deeper Into Florida Construction Loans
Explore the details that shape your construction loan — current rate drivers, the requirements you and your project need to meet, a step-by-step path to qualifying, and an honest look at the trade-offs.
Get a Builder Loan Comparison
We'll show you exactly how much you save using an independent FL mortgage broker vs. the builder's lender.
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.
Construction Loan Requirements in Florida
Construction loans qualify both you and your project. Beyond the usual credit and income checks, the lender vets your builder, reviews detailed plans and a fixed budget, and appraises the home based on its completed value. Strong preparation here keeps the build on track.
For the official rules behind this, review the CFPB's Owning a Home guide.
What You Need to Qualify
A construction loan underwrites the borrower and the project together. You bring qualifying credit and income; the project brings approved plans, a fixed budget, and a vetted builder.
Most Florida construction programs land in a similar range. Your exact terms depend on the lender, the project scope, and your credit.
Your Builder and Plans
The lender reviews your builder's license, insurance, and track record, then approves them for the project. A signed construction contract with a fixed price and timeline anchors the loan.
You also submit complete plans, specifications, and a line-item budget. The lender uses these to set the draw schedule, releasing funds as the builder completes each milestone.
Appraising a Home That Isn't Built
A construction appraisal values the home based on the approved plans and the finished result, not the empty lot. That completed value sets your maximum loan and your loan-to-value.
Because the loan is sized on the finished home, accurate plans and a realistic budget protect you from coming up short mid-build. Review the numbers with us before you break ground.
Construction Loan Requirements: FAQ
You need qualifying credit, typically a score of 680 or higher, around 20% down, and a vetted project: an approved licensed builder, detailed plans, a fixed budget, and a signed construction contract. The home is appraised on its completed value.
Yes. The lender reviews your builder's license, insurance, and track record, then approves them for the project. A signed construction contract with a fixed price and timeline anchors the loan and the draw schedule.
A construction appraisal values the home based on the approved plans and the finished result, not the empty lot. That completed value sets your maximum loan, so accurate plans and a realistic budget are essential to avoid coming up short mid-build.
How to Qualify for a Construction Loan in Florida
Qualifying for a construction loan means getting both you and your project ready. You assemble an approved builder, complete plans, and a fixed budget, then bring qualifying credit and your down payment. Here is the path from blueprint to closing and your first draw.
Line Up Your Builder and Plans
Start with a licensed, insured builder the lender can approve. Get a signed construction contract with a fixed price and a realistic timeline, since these anchor your loan.
Assemble complete plans, specifications, and a line-item budget. The more detailed and accurate these are, the smoother the appraisal and draw schedule will be.
Prep Your Credit and Down Payment
Check your credit and aim for a score of 680 or higher. Pay down revolving balances and avoid new debt while your project is underwritten.
Set aside roughly 20% of the project cost for the down payment, plus a contingency cushion. A buffer protects you if costs rise during the build.
Close and Start Building
The lender orders a completed-value appraisal, approves your builder, and sets the draw schedule. With a single-close construction-to-permanent loan, you lock the permanent rate at the same time.
After closing, funds release in stages as the builder hits milestones, and you pay interest only on what is drawn. When the home is finished, the loan converts to your permanent mortgage. Reach out to map your build, or compare against a renovation loan.
Construction Loan How to Qualify: FAQ
Line up a licensed, lender-approved builder with a signed fixed-price contract and detailed plans, then bring qualifying credit around 680 or higher and roughly 20% down. The lender orders a completed-value appraisal and sets a draw schedule for the build.
Yes. The lender approves your builder as part of underwriting, reviewing their license, insurance, and track record. A signed construction contract with a fixed price and timeline is required before the loan can close and the draw schedule can be set.
Funds release in stages called draws as the builder completes milestones, and you pay interest only on what is drawn. When the home is finished, a single-close loan converts automatically to your permanent mortgage with no second closing or fees.
Construction Loan Rates in Florida
Construction loan rates in Florida have two layers: the rate you pay while the home is being built and the permanent mortgage rate after it converts. A single-close construction-to-permanent loan lets you lock both in one transaction. Your number depends on credit, the project, and timing.
What Affects Your Construction Rate?
Construction pricing reflects the added risk of lending against a home that does not exist yet. The lender looks at your credit, the project budget, the builder, and the completed appraised value.
During the build, you typically pay interest only on the funds drawn so far. After completion, the loan converts to a permanent mortgage at the rate you locked, so the permanent rate is the one that follows you for decades.
Sample Permanent Payment by Rate
The table shows the permanent principal and interest on a $400,000 construction-to-permanent loan after the home is built. During construction you pay interest only on drawn funds, so your payment ramps up as the build progresses. These are illustrations only, not a rate quote.
| Sample Rate | Monthly P&I | Interest Over 30 Yrs |
|---|---|---|
| 6.625% | $2,561 | $522,000 |
| 7.125% | $2,695 | $570,000 |
| 7.625% | $2,832 | $620,000 |
| 8.125% | $2,972 | $670,000 |
Illustrative only. Based on a $400,000 permanent loan over 30 years; excludes property taxes, insurance, HOA dues, and the interest-only construction phase. Your actual rate and payment will differ. Call (561) 300-0380 for a personalized quote.
How Draws Shape Your Cost
During construction, the lender releases funds in stages called draws as the builder completes milestones. You pay interest only on the amount drawn so far, so early payments are small and grow as the home takes shape.
When the home is finished, a single-close loan converts to your permanent mortgage automatically, with no second closing or second set of fees. Estimate your finished payment on our mortgage payment calculator.
When to Lock Your Permanent Rate
A single-close construction-to-permanent loan can lock your permanent rate up front, protecting you from rate increases during a build that may take several months to a year.
Watch the broader market with our Florida mortgage rates page, and ask us about extended lock and float-down options suited to construction timelines.
Construction Loan Rates: FAQ
The construction phase usually carries a higher rate because the lender is funding a home that is not built yet. The permanent rate after conversion prices much like a conventional mortgage. A single-close loan lets you lock the permanent rate up front.
During the build, you typically pay interest only on the funds drawn so far. The lender releases money in stages as the builder hits milestones, so early payments are small and grow as the home progresses. Full principal and interest begins after conversion.
With a single-close construction-to-permanent loan, you can lock the permanent rate up front, which protects you from increases during a build that may run several months to a year. Ask about extended lock and float-down options suited to construction timelines.
Construction Loan Pros and Cons in Florida
Construction loans turn a blueprint into a home, but they ask more of you than a standard mortgage. The trade is clear. You get a custom build and, with single-close, one set of fees. That is balanced against a higher build-phase rate and a more hands-on process. Here is the honest balance sheet.
Construction Loan Advantages
The headline benefit is building exactly the home you want, financed from the ground up. A single-close construction-to-permanent loan wraps the build and the mortgage into one transaction. You get one set of closing costs.
Interest-only payments during the build keep early costs low. Locking the permanent rate up front protects you from increases while the home goes up.
Construction Loan Drawbacks
The construction phase carries a higher rate, and the process is more involved. Expect builder approval, detailed plans, a fixed budget, and inspections at each draw. Timelines can slip if weather or supply issues hit.
You also need a larger down payment, often around 20%, and a contingency cushion for overruns. The loan rewards careful planning and punishes a thin budget.
Who Should Choose a Construction Loan
Construction loans fit buyers who want a custom home and have a vetted builder. You also need to manage a more hands-on process with a solid budget. If you would rather buy existing, a standard purchase loan is simpler.
Considering a major remodel instead of a ground-up build? Compare with a renovation loan, then call us to map the right path for your project.
Construction Loan Pros and Cons: FAQ
You finance a custom home from the ground up. A single-close construction-to-permanent loan combines the build and the mortgage into one transaction. That means one set of fees. Interest-only payments during the build keep early costs low, and you can lock the permanent rate up front.
The construction phase carries a higher rate, and the process is more involved. Expect builder approval, detailed plans, a fixed budget, and draw inspections. You also need around 20% down plus a contingency reserve, and timelines can slip with weather or supply delays.
For buyers who want a custom home and have a vetted builder and a solid budget, a construction loan is worth the added effort. If you would rather buy an existing home, a standard purchase loan is simpler. The rate is also lower during the equivalent period.
Related Property & Purchase Programs
Florida borrowers comparing this program usually weigh it against Renovation Loans (203k), Manufactured Home Loans, Condo Loans, Second Home Loans, Land & Lot Loans, ADU Financing, Owner Financing, and Rent-to-Own Homes. We are brokers, so we price every one of them for you in a single application.