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Ground-up construction loans in Miami and South Florida
Financing to build from the ground up, lot included: new homes, townhomes, duplexes, tear-down rebuilds and small apartment buildings. Experienced builders can borrow up to 90% of the total project cost.
Construction loan terms
| Experienced builders | up to 90% of cost |
| Standard | up to 85% of cost |
| Limit on finished value | 70 to 75% |
| Lot cost financed | up to 70% |
| First-time builders | programs available |
| Smallest loan | $75,000 |
Builders with fewer recent projects, and smaller markets, are usually limited to 80% of cost.
Two limits decide the loan
Loan-to-cost measures the loan against what you spend on the lot and the build. Loan-to-value measures it against what the finished property will be worth. A construction loan has to fit inside both.
- The lot: up to 70% of what you paid can be financed.
- The whole project: normally up to 85% of cost.
- Experienced builders in major markets: up to 90% of cost.
- Less active builders and smaller markets: usually up to 80% of cost.
- Always: no more than 70 to 75% of the finished value.
Example
| Infill lot | $300,000 |
| Construction budget | $600,000 |
| Total cost | $900,000 |
| Finished value | $1,300,000 |
| 85% of cost | $765,000 |
| 90% of cost, experienced builder | $810,000 |
| 75% of finished value, the ceiling | $975,000 |
Who qualifies
Your record sets your leverage. Builders with completed projects get the most. First-time builders are not shut out: we have programs for them too.
Building in South Florida
- Hurricane code. New homes in Miami-Dade and Broward are built to the High-Velocity Hurricane Zone standards, with approved roofing, impact windows and doors. Price them into the budget from the start.
- Flood elevation. In a FEMA flood zone the lowest floor has to sit at or above the base flood elevation plus any extra height the city requires, which affects fill, foundations and design.
- City permits. Miami-Dade has 34 cities, Broward 31, and unincorporated areas are permitted by the county. Review times vary widely. Plan the schedule, and the loan term, around a realistic permit date.
- Zoning. Confirm what the lot allows before you design. In the City of Miami, the Miami 21 code sets what can be built on each lot, and many neighborhoods near the urban core allow duplexes or townhomes.
- Historic districts. Miami Beach has large historic districts, including the Art Deco district in South Beach, and the City of Miami has districts such as Morningside, Buena Vista East and Spring Garden. Coral Gables reviews the design of almost every exterior change. Exterior work in a historic district needs approval from the city’s historic preservation board as well as a building permit.
From construction loan to rental loan
Many investors build to keep. When the property is finished and leased, a DSCR rental loan pays off the construction loan and replaces it with long-term debt.
Finishing a stalled build
A construction completion loan lends against the project as it stands today and adds what is needed to finish it.
Documents we ask for
- Loan application and personal financial statement
- A line-item construction budget with a clear scope of work. Draws are paid against it
- Plans, drawings, survey with flood elevation, and permit status
- Your general contractor’s details, insurance and recent completed projects
- Your own projects from the last 2 years, with settlement statements
- Two months of bank statements showing reserves
- Insurance and title contacts
The full list is in our hard money loan document checklist.
Construction loans: common questions
Normally up to 85% of the total project cost, and up to 90% for experienced builders in major markets. The loan must also stay within 70 to 75% of the finished value.
Yes. Up to 70% of the lot cost can be financed, as long as the total loan stays inside the loan-to-cost limit.
Yes. Build with a construction loan, then refinance into a DSCR rental loan once the home is leased.
Yes, we have first-time builder programs. Leverage rises with a record of completed projects.
Yes. A construction completion loan is based on the current as-is value plus the cost to finish.
Have a lot and a set of plans?
Send the address, the price and what you plan to do with the property. We will reply with the leverage and pricing that fit your deal.