Ground Up Financing in Florida: How to Fund Construction Projects

Ground up financing in Florida is the capital tool that lets you build from the dirt up without draining your personal reserves. You put down 10-15%, the lender covers up to 85% of your project costs, and you get structured draws tied to construction milestones. This isn't traditional real estate lending—it's built for developers, contractors, and real estate investors who are actively building, not just buying.

What Is Ground Up Financing and Why Florida Builders Need It

Ground up financing is capital deployed specifically for construction projects starting from raw land or foundation work. Unlike a standard mortgage (which appraises a finished property), ground up loans are underwritten against your project timeline, budget, and builder credentials.

Florida's construction boom means lenders here understand the local market. But the approval process is still strict—lenders want predictable draw schedules, solid collateral, and proof you can manage the build.

You'll typically borrow up to 85% of total project costs, with loan amounts ranging from $25,000 to $2,500,000. The math is simple: you cover 10-15% yourself, the lender covers the rest. Standard terms run 5-10 years, giving you time to stabilize the property or sell before repayment pressure kicks in.

Loan Terms and Maximum Amounts for Florida Projects

Here's what you're working with when you apply for ground up financing in Florida:

Loan-to-value (LTV): Up to 85% of project costs
Maximum loan size: $2,500,000
Minimum loan size: $25,000
Term length: 5-10 years typical
Amortization: Varies; many deals use interest-only during construction, then full amortization post-completion

The 85% LTV is industry standard because it protects the lender and forces you to have real skin in the game. Your 10-15% down payment isn't just collateral—it's proof you believe in the project.

Down Payment and Collateral Requirements

Every ground up loan in Florida requires full collateral. That usually means a first lien position on the real estate itself.

Your minimum down payment is 10%. In practice, most borrowers put down 15% to strengthen approval odds and reduce the loan amount. Aberdeen Financial Group LLC and other direct lenders evaluate collateral aggressively—they'll appraise the finished property value and lend against that, not the raw land cost.

You're responsible for any costs beyond the 85% LTV. If your project runs over budget, that overage comes from your pocket or supplemental equity. Lenders won't fund construction overruns beyond the original approved amount.

How Draw Schedules Work in Ground Up Construction Loans

This is the piece that separates ground up financing from a personal loan. You don't get all the money upfront.

Instead, funds are released in tranches tied to construction milestones. Your lender (or a third-party inspector they hire) inspects the work, verifies it matches the budget, and approves the next draw.

A typical schedule looks like this:

25% after foundation and framing complete
25% after roof and exterior enclosed
25% after interior rough-in (electrical, plumbing, HVAC)
25% at final completion and occupancy

This protects everyone. The lender doesn't fund work that isn't done. You're incentivized to stick to the schedule. Your contractor knows funds are predictable if they hit benchmarks.

Pro tip: Build realistic timelines into your draw schedule. Florida weather delays, permitting hold-ups, and material shortages are real. A tight schedule that assumes perfection is a funding disaster waiting to happen.

Critical Documentation and Preparation Steps

Approval for ground up financing in Florida hinges on paperwork. Lenders want to see:

Detailed project budget (line-item breakdown, not a guess)
Construction timeline with realistic milestones
Architect or engineer plans and specifications
Proof of ownership or control of the land
Your personal financial statements (3 years of tax returns, balance sheet)
Contractor credentials and references
Proof of liability and builders risk insurance
Environmental reports (especially in Florida, given flood/subsurface concerns)

Yes, it's a lot. But it's what separates real deals from pipe dreams in a lender's eyes.

Florida-specific: Expect higher scrutiny on flood risk and foundation type. Get a Phase 1 environmental report done upfront. It costs $1,500-$3,000 but answers questions before the lender raises them.

Interest Rates and Cost of Ground Up Financing

Ground up construction loans cost more than traditional mortgages. Why? Construction risk is higher.

Expect rates 2-4 percentage points above a standard 30-year fixed mortgage. If conventional mortgages are at 6%, ground up loans might be 8-10%, depending on your credit, down payment, and project strength.

Many lenders structure ground up deals as interest-only during construction, then switch to full amortization once the project is stabilized. This reduces your monthly burden while you're building and not generating revenue.

Points and origination fees are common too. Budget 2-3% of the loan amount in closing costs, plus appraisals ($1,000-$2,000), inspections ($500-$1,000 per draw), and title work.

SBA Loans and Alternative Paths in 2026

If you're building a business property (not pure real estate investment), SBA loans like the 504 program can work. They cap out around $5.5 million and require you to occupy the space, but rates are often better than conventional construction loans.

The catch: SBA takes longer to approve (60-90 days vs. 30-45 for private lenders) and documentation is even heavier.

For speed and approval likelihood on pure development deals, direct lenders like Aberdeen Financial Group LLC cut through the red tape. They're built for construction and make decisions fast.

Credit Requirements and Borrower Qualification

You'll need solid credit to qualify for ground up financing in Florida. Most lenders want a minimum credit score of 680-700, though 750+ significantly improves your odds and rate.

But credit isn't everything. Lenders also look at:

Debt-to-income ratio (lower is better; aim for under 40%)
Liquidity and reserves (can you cover shortfalls?)
Real estate or construction experience (track record matters)
The project itself (some deals are stronger than others)

A weak credit score doesn't automatically disqualify you if the project is strong and you have reserves. Conversely, perfect credit won't save a poorly underwritten deal.

Key Takeaways for Ground Up Financing Success

Ground up financing in Florida is achievable if you go in prepared. Here's the summary:

Expect to borrow up to 85% at 5-10 year terms, with 10-15% down required
Draws happen in stages tied to construction completion, not all upfront
Documentation is extensive—budgets, plans, timelines, and personal financials are non-negotiable
Rates run 2-4% above conventional mortgages; budget for closing costs
Credit and experience matter, but a strong project can overcome modest credit weakness
Work with a lender who understands Florida construction and moves fast

The whole process—from application to first draw—typically takes 30-60 days with an experienced lender. Choose your partner carefully, and you'll have capital deployed while competitors are still waiting for bank approvals.

Finding the Right Lender for Your Florida Build

Not all lenders are created equal. Some specialize in ground up deals and move decisively. Others treat construction loans as a side service and drag out the timeline.

When evaluating lenders, ask these questions:

How many ground up deals have you closed in Florida this year?
What's your average timeline from application to first draw?
Do you hire third-party inspectors or inspect internally?
Are there prepayment penalties?
What happens if the project runs over budget?
Do you offer permanent financing after construction, or do I refinance elsewhere?

A lender who answers directly and doesn't hide behind underwriters is a good sign. Aberdeen Financial Group LLC operates differently—founder Ed engages directly with clients, transparency is non-negotiable, and the approval process is built for speed.

Get multiple quotes. Ground up financing rates and terms vary based on the deal and your profile. A 0.5% rate difference saves you thousands.

Can I get ground up financing with a lower credit score?

Yes, but it's harder. Lenders below 700 credit are rare and rates are steeper. A strong project, solid reserves, and real estate experience can offset modest credit weakness. The best move is to strengthen your credit before applying if you have 3-6 months to spare.

What if my construction project runs over budget?

You cover it. Lenders approve a fixed loan amount tied to the approved budget. Overruns don't trigger automatic draws. You'll need to inject additional capital or renegotiate the deal. This is why contingency budgets (10-15% buffer) are critical.

Do I need an architect or engineer to qualify?

Yes. Lenders require plans and specifications from a licensed professional. This isn't optional—it's how they verify the budget is realistic and the project is feasible. Budget $3,000-$10,000 for plans depending on project complexity.

How long does ground up financing take to close?

Typically 30-60 days from application to first draw, assuming you have all documentation ready and appraisals go smoothly. Delays usually come from incomplete paperwork, permitting hold-ups, or appraisal disputes. Lenders specializing in construction move faster than generalist banks because they handle these deals constantly.