Builder & Developer Guide
New Construction Loans in Florida: The Builder's Guide
Northeast Florida is one of the most active new-build markets in the country, and ground-up construction loans are how most independent builders and infill developers finance their projects. These loans cover land plus 100% of vertical construction, draw down as you build, and underwrite to the completed appraised value. Here's how they work in Jacksonville.
Loan Structure
- Land: 75–80% of cost or appraised value funded at closing.
- Vertical construction: 100% of budgeted scope, held in escrow.
- LTV cap: 65–70% of completed (as-built) appraised value.
- Term: 12–24 months interest-only, extensions available.
- Interest: Charged only on funds drawn, not the full commitment.
Rates & Points
Florida construction loans typically price at 10.5%–13% interest-only with 2–3 points at origination. Experienced builders with completed projects on their resume earn meaningfully better pricing — track record matters more here than on a simple fix and flip.
Draw Schedule
Vertical funds are released across 5–10 milestone draws — commonly foundation, framing, dry-in, mechanical rough-in, drywall, finish, and certificate of occupancy. Each draw requires a third-party inspection and updated contractor/sub lien waivers. Plan working capital so subs are paid promptly between inspections; delayed payments to framers and mechanical subs are the most common cause of schedule slippage.
Qualification
- Credit: 680+ typical for best pricing.
- Experience: 2+ completed ground-up projects or licensed GC on file.
- Liquidity: 10–20% of project cost in verifiable reserves.
- Permits: Approved plans and pulled permits at or shortly after closing.
- Entity: LLC or corporation; personal guarantee usually required.
Exit Strategies
The two standard exits are sell at CO (build-to-sell, most common in Jacksonville's infill submarkets) or refinance into a long-term loan — typically a DSCR loan if the asset will be held as a rental, or conventional if you'll live in it. Lenders want to see your exit penciled out at application; underwriting the take-out is part of underwriting the construction loan.
Northeast Florida Submarkets That Work
Infill lots in Riverside, Murray Hill, Avondale, and Springfield support strong build-to-sell margins on single-family. Nocatee, Nassau County, and western St. Johns continue to absorb new subdivisions. Beach towns (Jacksonville Beach, Atlantic Beach, Ponte Vedra) support higher-end custom builds that finance cleanly when comps and builder experience line up.
New Construction Loan FAQs
What is a new construction loan?+
A short-term loan that funds ground-up construction of a residential or small commercial building. The lender finances a portion of the land plus the full vertical construction budget, released in draws as the project is built.
How much can I borrow for ground-up construction in Florida?+
Most Florida construction lenders fund up to 75–80% of land cost (or appraised land value), 100% of vertical construction, capped at 65–70% of the completed appraised value.
What are typical rates for new construction loans?+
Expect 10.5%–13% interest-only with 2–3 points. Rates depend on builder experience, leverage, project complexity, and submarket. Interest is typically charged only on funds drawn, not the full commitment.
How long are construction loan terms?+
Most programs offer 12–24 month terms with 6-month extension options. Build timelines in Northeast Florida average 8–14 months for single-family, longer for small multifamily or infill subdivisions.
Do I need to be a licensed builder?+
Not always — but you'll need either a Florida-licensed general contractor on the project or strong personal construction experience. Owner-builders are accepted by some lenders with lower leverage.
How are draws released during construction?+
Funds are released in 5–10 draws tied to construction milestones (foundation, framing, dry-in, mechanical rough-in, drywall, finish, CO). Each draw requires an inspection and updated lien waivers.
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