Florida Construction Loans

A Home Construction Loan Helps You Realize Your Dreams

Blue piggybank with dollar bills on home construction plans - home building financing concept

When planning the construction of a new home, visions of spa-like master baths, chef-inspired kitchens, and enough closet space to fill a boutique may dance through your head, but before you can enjoy all of that, you need to plan for financing. Key questions to ask yourself when planning for the financing of a new home build include:

  • What are my loan options for building a new home?
  • Are my credit reports correct and up to date?
  • What can I afford for a home construction loan?
  • What information will I need to apply to finance building a new home?

 Available Loan Options for Building a New Home

If you have always dreamed of building your own home but are concerned about financing the construction, it’s important to know that you actually have many options available.

Construction to Permanent Programs can provide you with a wealth of benefits while helping you achieve your dream of owning your own custom-built home. The available construction loan programs offered by Sposen Signature Homes include:

  • 100% VA Construction Financing
  • 5% FHA Construction Financing
  • 80% Conventional Construction Financing
  • 65% Construction Financing for Foreign Nationals
  • 80% Construction Financing for Canadians

One of the most common questions that many people have when beginning the process of financing the construction of a home is how closing costs and interest are handled. With a one-time close option, you can save on closing costs. There are even no-payment options available during construction, so you do not have to worry about paying the interest on your loan during the construction process, giving you greater peace of mind.

Tips for Securing a Home Construction Loan

Understanding the financing options available for building a home is only part of the story, however. You also need to make sure you are completely prepared to apply for a home construction loan. Below are some tips when financing the construction of a new home:

Have Documentation Ready: Make sure you have all of the documentation you will need when applying for your loan ready to go. This will help speed along the process and prevent any delays in you being approved for your home loan. The documents you may need include:

  • Copy of the lot plat with directions to the building site
  • Copy of warranty deed showing ownership of lot or purchase contract, if purchasing land
  • Copy of two most recent pay stubs
  • Copy of last two years’ tax returns
  • Copy of two most recent months’ bank statements
  • Copy of most recent statements for all investment accounts

Check Your Credit Reports: The last thing you want to have happen is to have your loan application rejected because of something erroneous on your credit report. Take the time to check your credit report and be sure that everything is correct and up to date. Remember, consumers are entitled under federal law to receive one free credit report from each of the top three credit reporting bureaus, Experian, Equifax, and TransUnion, each year. Your free credit report can be obtained from

 How Much Can I Afford?

A variety of factors will be taken into consideration in determining how much you can qualify for when applying for a new home construction loan. Along with your ability to repay the loan, your debt-to-income ratio will typically be considered. The standard debt-to-income ratio is 36 percent, but this could vary based on the amount of the loan. Your total housing ratio will also be considered, which takes into consideration your total monthly housing expenses, including housing payment in addition to real estate taxes, homeowner’s dues, and insurance. Keep in mind that your credit score requirements may vary based on the amount of your loan. The higher your home construction loan, the higher credit score you may be required to have.

The process of building a home can oftentimes be overwhelming. There is no need for the financing process to be, as well. By researching and understanding the various financing options available, you can choose a financing program that is right for your needs.

Written by:

Jeremy Sposato, Licensed Florida Real Estate Broker.