Construction To Permanent Loan Florida

Various options for construction loans are available in Florida depending on the lender you select and your individual financial situation.

Population growth in Florida has been booming lately. Data from the most recent census show that Florida’s population has increased by 14 overall. 6% over the past ten years, almost twice as fast as the United States

The influx of thousands of people into Florida is pushing up housing costs. According to the Florida Realtors association, the statewide median sales price for existing single-family homes is $375,000, an increase of 23% from the previous year.

In order to finance the construction of new homes, many people have turned to construction loans due to the state’s rising real estate prices and growing demand. You might as well buy a lot and construct your custom dream home if you’re going to spend a lot of money on a house, don’t you think?

Construction loans, which differ slightly from conventional mortgages when you’re buying an existing home, are one of the first things someone looks into when they decide to build their new dream home.

You’ll quickly discover from your research that construction loans have various regulations and requirements. Avoid the nightmare scenario of committing to buy a lot but then having trouble getting a construction loan.

Fortunately, there are loan officers that specialize in construction loans. They’ve worked with underwriters for years, so they can help you navigate the application, pre-approval, and closing processes.

We can quickly connect you with several options tailored to your unique needs if you’re a home buyer looking for a construction loan specialist so you can make the best choice for you.

Benefits of a new a construction loan in Florida

Construction loans are a form of short-term financing used to pay for the full cost of constructing a home. Loans for construction can be used to pay for the purchase of land, working with an architect to create the plans, permit fees, as well as the labor and supplies required to complete the house.

The approval procedure for a borrower may be more difficult than for a conventional mortgage because construction loans aren’t secured by a finished house. Before approving the loan, your lender will probably want to become more involved in the process of learning about the construction timeline, budget, plans, and your own financial situation.

Another crucial point to keep in mind is that home construction loans aren’t given out in one lump sum. Instead, as the stages of the construction are finished, your lender will give you money in a series of installment payments.

A construction loan has the advantage that you typically only have to pay interest on the money as it is drawn. The principal payments won’t be due until the project is finished. At the conclusion of the construction process, your lender will likely have the option to convert your construction loan into a regular mortgage.

5 Top Florida construction loans

The TD Bank construction loan has some great benefits if you’re looking to build a house, with down payments as low as 20% for a loan up to $1,500,000.

We got in touch with a loan officer at TD Bank to learn more about the following aspects of the program:

  • 720-740 FICO score desired
  • 20% down required on loans up to 1.5M
  • 30% down required on loans up to 3M
  • One-time close
  • Primary or secondary homes are eligible
  • Fixed rate and ARMs are available
  • Purchased lot considered in the down payment
  • No pre-payment penalties
  • Interest rate locked before construction begins
  • If land has been owned for at least 6 months, we will lend up to 80% of the appraised value of the entire project.
  • If land has not been owned for at least 6 months, we will lend up to 80% of the land acquisition cost+cost of construction
  • No Condos or Co-Ops. No investment properties.
  • If you’re building something special in Florida, TD Bank allows you to use their loans for vacation properties but does require that 10% of the construction costs be held in reserve.

    Contact: Nicole Smith is the TD Bank’s construction loan specialist. You can text her at 904-944-9271.

    Regions Bank has a construction-to-permanent loan program for those looking to finance a new build.

    Since the website barely has any information, we contacted Regions Bank to find out more, and this is what we discovered:

  • 10% down up to $1,000,000 loan amount
  • Loans available up to $2,000,000 loan mount
  • May use lot purchase as a downpayment
  • One-time close with interest rate locked before construction begins
  • Primary home OR secondary home
  • 700 Minimum Credit Score Requirement
  • Mobile, Manufactured, or Modular Homes are not eligible
  • Not Eligible for VA or FHA programs
  • No prepayment penalty
  • Unfortunately, Regions Bank in Florida does not offer construction loans for owner-builder projects or commercial or investment properties.

    Use our form to quickly match with construction loan programs based on your unique circumstances when you’re ready to speak with a loan officer.

    Space Coast Credit Union

    The folks over at Space Coast Credit Union offer a home construction loan up to $650,000, so long as you have a minimum credit score of 650.

    In order to learn more about their program, we got in touch with Space Coast Credit Union:

  • One Loan: from Construction through Final Permanent Mortgage
  • One Application, One Closing and One Paperwork Filing
  • Up to 90% Financing Available
  • We Make the Payments to Your Builder at Key Points Throughout the Process
  • Automatic Modification to Traditional Home Loan at the End of Construction
  • Fast Pre-approval Decisions, Online or Over the Phone
  • No Intangible Tax
  • SCCU Member Service for the Life of the Loan
  • SCCU Interest Rate Guarantee
  • No application fees or pre-payment penalties are advertised by Space Coast Credit Union as fees. At the time of publication, their origination fees are $1,100.

    Use our form to quickly match with construction loan programs based on your unique circumstances when you’re ready to speak with a loan officer.

    MidFlorida is a regional credit union based in Lakeland, Florida with a construction mortgage product.

    Before funding the loan, MidFlorida will review and approve your builder and require inspections before each draw.

    According to our research, you can anticipate the following conditions with regard to their construction loan program:

  • Down payment as low as 10%
  • Financing is secured before construction begins. You only need to be approved once.
  • Interest-only payments during construction
  • One-step, one-time closing
  • Converts to a fixed- or adjustable-rate mortgage.
  • Flexible loan terms up to 30 years
  • Jumbo loans available
  • Once construction is finished, MidFlorida gives you the choice to convert your construction loan into a conventional mortgage. Since you’ll be opening an escrow account for insurance and taxes, paying title insurance fees, and perhaps even paying off any unpaid interest from the construction phase, there might be additional closing costs connected with that conversion.

    Use our form to quickly match with construction loan programs based on your unique circumstances when you’re ready to speak with a loan officer.

    SeacoastBank is another option as they lend in Florida and have a construction loan product. Details are thin about the program, including the maximum amount available, but we were able to confirm the following details:

  • Adjustable Rate Mortgage options are available
  • Fixed Rate Mortgage options are available that would give you the same fixed rate from construction through permanent loan
  • One-time closing
  • Local underwriting and closing decision-makers during the loan process
  • Florida-based SeacoastBank has a lengthy history dating back to 1926. Currently, Broward County, the Treasure Coast, Orlando, and westward to Tampa are their main focus areas.

    Use our form to quickly match with construction loan programs based on your unique circumstances when you’re ready to speak with a loan officer.

    Does a Florida construction loan make sense for you?

    In Florida, obtaining a construction loan has many advantages and few drawbacks. Since you’ll be paying your current mortgage until the new construction is finished, you’ll probably be able to make interest-only payments during the construction phase, which lowers your monthly payment as an existing homeowner.

    We advise working with a loan officer who specializes in construction loans because the challenges of a construction loan in Florida are that the procedure will be different from a typical mortgage. In the end, you want someone with extensive experience working solely with construction loans every single day.

    Please let us know if you’re interested in learning more about construction loans in other states, and we’ll think about creating a guide specifically for your state.

    Joshua Holt, the owner of Biglaw Investor and a licensed mortgage loan originator (NMLS #2306824), His knowledge of mortgages focuses on professional mortgage loans, especially for high-earning professionals like lawyers and doctors Josh previously worked as a private equity mergers and acquisitions attorney for one of the biggest law firms in the nation before joining Biglaw Investor.

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    Can you convert a construction loan into a mortgage?

    You won’t have to go through the approval procedure once you’ve received your loan approval. When the construction is finished, the loan will simply become a permanent loan.

    What are the advantages of a construction-to-permanent loan?

    To pay for the costs of building a house, borrowers can take out a short-term, higher-interest loan known as a “home construction loan.” When the house has been constructed and the construction loan’s funds have been expended, this type of loan is typically converted or refinanced into a regular long-term mortgage loan.

    Who offers construction loans in Florida?

    The benefits of a construction-to-permanent loan include the ability to draw only the amount of money you require when you require it, similar to a line of credit. Another advantage is that during the construction phase, you only pay interest on the money you withdraw.

    How do I get a construction loan to build a house in Florida?

    5 Top Florida construction loans
    • TD Bank. If you want to build a house, the TD Bank construction loan has some great advantages, including down payments as low as 20% for loans up to $1,500,000.
    • Regions Bank. …
    • Space Coast Credit Union. …
    • MidFlorida. …
    • SeacoastBank.