Finding the perfect property for your next project can be a difficult task. Existing buildings can be fraught with problems, such as construction that’s not up to Florida’s strict building codes or hidden issues with mold or mildew from the perpetually humid climate. If you want to be sure that you know exactly what you’re getting, new construction is the best way to go. Fortunately, there’s a convenient short-term lending option that’s tailored to exactly that. With a ground-up construction loan, you can create the perfect property that meets your needs while securing funding in convenient chunks as the project moves along. A ground-up construction loan is a type of financing that pays for building a structure starting from ground zero. It can help investors and business owners pay for a variety of costs related to constructing a brand-new property, including: With a ground-up construction loan, lenders, contractors, and investors work together to ensure every stage of a building project is completed. The loan can help you pay for the land if needed and let you use the funds to build a single-family home, multifamily building, or commercial building. This type of loan can be ideal for business owners who need a structure for a specific purpose or investors who want a property that they don’t have to fix up before renting or selling. Receive More Info About Ground Up Construction Loans Ground-up construction financing is more complex than traditional financing for an existing property. Since there’s no standing building for Florida construction lenders to inspect, they have to rely on detailed plans instead. Borrowers who want to secure a ground-up construction loan must develop a comprehensive plan for the project. This plan must include many things, such as the following: The construction draw schedule is a unique feature of ground-up construction loans. Unlike other hard money loans, which provide you with the full funds at closing, a ground-up construction loan is paid out in installments. The borrower, contractor, and lender work together to create a draw schedule that specifies when each chunk of financing will become available. The loan only offers a limited sum of money upfront and provides subsequent payouts as you meet key milestones in the project’s construction. These payouts don’t go directly to the borrower. Instead, the lender submits direct payments to the builder and other professionals who are working on the construction. The first construction draw typically funds the purchase of the property and initial expenses, including permits. Certain events will trigger the project’s subsequent construction draws, such as the following: To receive the final draw, the contractor must prove that the project has been completed with a final inspection and certificate of occupancy or the equivalent. A ground-up construction loan is just one of many options that you’ll encounter as you explore the world of real estate financing. It’s important to understand all your options so that you can secure the most appropriate loan for your individual project. Some alternate loans that you may come across include the following: A ground-up construction loan gives you complete control over your real estate project. You can build exactly what you need from the very beginning of the project and avoid any difficult retrofitting, remodeling, or repairs. Purchasing a pre-existing building may seem like a faster route to real estate ownership, but many older buildings come with a plethora of unpleasant surprises that will leave you struggling with upgrades and fixes for years to come. You will find the following with a ground-up construction project: Borrowers can use ground-up construction loans for single-family dwellings, multi-family housing, or mixed-use developments that combine residential and commercial uses in a single building. This type of loan is ideal for real estate investors who want to capitalize on a new project quickly, as ground-up construction loans often come through faster than bank financing. Ground-up construction loans offer short-term financing. Most of these loans have a period of only 12 to 18 months. This makes them ideal for completing construction and moving on quickly to the next phase of the project. At the completion of a ground-up construction loan, borrowers typically refinance with a more traditional 30-year loan. This offers long-term financing for the project. Many ground-up construction projects become rentals for real estate investors. You can also complete a ground-up construction project with the intention of selling it. Homeowners may choose this type of financing for their own dwelling to ensure that they get exactly what they want from their home. To qualify for a ground-up construction loan, borrowers need to meet a lender’s requirements, which are usually stricter than those of a mortgage. As mentioned, you need to have a larger down payment of at least 20%, which can be a challenge for new investors or small business owners to come up with. You’ll also need to have a decent credit score of at least 620. The higher your credit score, the better your interest rate. A low interest rate can help lower your interest payment on each draw. Ground-up construction loans are perfect for builders who meet the qualifications and have land that needs to be developed, individuals who want to build a custom home on their land, and investors who want to build homes or commercial space they can rent or sell for a profit. Lenders that offer ground-up construction loans can help investors build single and multifamily homes as well as mixed-use buildings. Some lenders also provide construction loans for buildings that need significant rehabbing. You may be able to tie land financing into the overall construction loan if you don’t own a property yet. As a business owner, you can also use ground-up construction financing to help you create a space that meets your specific needs. When you’re securing a ground-up construction loan, it’s important to compare Florida construction lenders and find the company that suits your needs. Titan Funding is an experienced private money lender that is dedicated to serving innovators who want to pursue intriguing new real estate projects. Our team of entrepreneurs and investment professionals is eager to assist with your next construction. We’ll help you to explore your loan options and find the right fit for your needs.What Is a Ground-Up Construction Loan?
How Ground-Up Construction Loans Work
Ground-Up Construction Loans vs. Other Lending Options
The Benefits of Ground-Up Construction Loans
Who Should Use a Ground-Up Construction Loan?
Who Qualifies for a Ground-Up Construction Loan?
What Properties Are Eligible for Ground-Up Construction Loans?
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Frequently Asked Questions - FAQ
TL;DR: Ground‑up construction loans from Titan Funding provide short‑term financing (usually 12–18 months) for building new properties. Funds are disbursed in stages through a draw schedule, and borrowers typically need at least a 20 % down payment and a credit score around 620.
What is private money lending?
Private money lending refers to financing provided by individuals or non‑bank entities for real‑estate investments. These loans are asset‑based rather than credit‑based and usually have short terms with higher interest rates compared with traditional bank loans.
How do I qualify for a real‑estate investment loan through Titan Funding?
Titan Funding evaluates the property’s value and the loan‑to‑value ratio rather than focusing on credit scores. Maintaining an LTV around 60 % and providing a clear plan for the investment increases your chances of approval.
What documents are needed for hard‑money loans?
Documentation typically includes proof of property ownership or purchase contracts, appraisals, and, for construction loans, detailed plans and budgets. Because underwriting is asset‑based, credit documentation is less critical than in conventional lending.
How quickly can I get funded for a property in Florida?
Titan Funding’s underwriting process usually takes about 48 hours, and approved borrowers can receive funds within four days for hard‑money, rental or bridge loans. Some commercial bridge loans provide funding in as little as 10 days.
Does Titan Funding lend to foreign nationals?
Yes. Titan Funding offers hard‑money programs for non‑U.S. citizens seeking to buy or refinance property in South Florida, using asset‑based underwriting to bypass conventional loan barriers.
What types of loans does Titan Funding offer?
The company provides various short‑ and long‑term real‑estate loans, including hard‑money and bridge loans, residential and commercial bridge loans, multifamily financing, fix‑and‑flip loans, rental property loans, ground‑up construction loans, bridge‑to‑permanent loans and cash‑out refinance options.
How does LTV work in real‑estate loans?
Loan‑to‑value ratio is calculated by dividing the loan amount by the appraised value of the property. Lenders, including Titan Funding, set maximum LTV thresholds (often around 60 % for hard‑money loans) to manage risk.
Which states does Titan Funding serve?
Titan Funding primarily serves Florida but may authorize loans in other states on a case‑by‑case basis. Applicants can discuss their specific property and location with the company’s professionals.
How do I calculate return on investment (ROI) for fix‑and‑flip projects?
ROI is determined by subtracting total costs (purchase price, renovation expenses, loan interest and fees) from the final sale price, then dividing the result by total costs. Titan Funding’s guide on calculating fix‑and‑flip ROI emphasizes factoring in loan terms and interest to evaluate profitability.
What are the risks of hard‑money loans?
Hard‑money loans carry higher interest rates (often 10 %–15 %) and points compared with traditional financing. They are short term, so borrowers need a clear exit strategy and must account for appraisal and origination fees in their budgets.
What is a ground‑up construction loan?
It is financing specifically for building structures from scratch, covering costs for land, labor, materials, permits and insurance. The loan helps investors or business owners create new single‑family homes, multifamily buildings or commercial properties.
How do ground‑up construction loans work?
Unlike other hard‑money loans, ground‑up construction financing is released in installments according to a draw schedule agreed upon by the borrower, contractor and lender. Each draw covers a project milestone, and subsequent funds are released after inspections confirm progress.
What documentation is required to qualify?
Borrowers must prepare detailed plans including purchase offers for land, blueprints, building specifications, contracts with qualified builders, comprehensive budgets and construction draw schedules. These documents assure the lender that the project is well‑planned and financially viable.
Who should consider ground‑up construction loans?
Investors, builders or business owners needing short‑term financing to develop single‑family homes, multifamily housing or mixed‑use developments may benefit. The loans are ideal for those who intend to refinance into a permanent mortgage after completion.
What are the typical loan terms and borrower requirements?
Ground‑up construction loans are short term (about 12–18 months), require at least a 20 % down payment and generally call for a credit score of at least 620. Borrowers refinance into longer‑term loans at project completion.
What are the benefits of ground‑up construction loans?
Benefits include full control over the design and construction of a new property, assurance that all materials and installations are new and up to code, and avoidance of unforeseen issues found in older buildings. The loan’s staged draws also ensure that funds are used efficiently as construction progresses.