Construction Loans in Florida: How They Work and How to Qualify (2026)
Construction loans in Florida cover the cost of building a new home from the ground up on a lot you own or are purchasing simultaneously. They work differently than standard mortgages: money draws out in stages as the build progresses, and you typically convert to a permanent mortgage when the home is complete.
How construction loans work in Florida
A construction-to-permanent loan (also called a one-time close or OTC loan) converts from a construction loan to a permanent mortgage at completion with one closing. A two-time close involves separate loans for construction and permanent financing. One-time close saves one set of closing costs and locks your permanent rate at the start.
Interest rates and terms
During the construction phase, you pay interest only on amounts drawn, not the full loan amount. Construction rates are typically 0.5–1.5% higher than permanent mortgage rates. Once the build is complete, the loan converts to a standard 30-year fixed or ARM mortgage at the pre-agreed rate.
Down payment and qualification
Most Florida construction loans require 20–25% down. Credit score minimums are typically 680–700. The lender will require builder approval, detailed construction plans, cost estimates, and a construction timeline. The builder must be licensed and insured in Florida.
Popular builders in South Florida
GL Homes, DiVosta, Toll Brothers, and Lennar all build throughout Palm Beach County. Most major builders have their own preferred lender programs that can be competitive on construction-to-permanent loans. Compare builder lender offers against outside lenders before committing. Browse new construction communities across South Florida on ListSellFL.com.
For personalized guidance on buying or selling in South Florida, contact the team at Pure Equity Realty. We serve Palm Beach, Broward, Miami-Dade, St. Lucie, and Highlands counties with expert representation and a 1% listing fee.
Onias Derilus is the Broker/Owner of Pure Equity Realty, a South Florida brokerage specializing in 1% listing commissions and free buyer representation across Palm Beach, Broward, Miami-Dade, St. Lucie, and Highlands counties. He holds an NMLS mortgage originator license and founded Mortgage Capital and Verified Title to serve clients through every step of the transaction.