Florida is building fast, and financing a new home works differently from buying a resale. Whether you’re constructing from the ground up or buying a builder’s spec home, understanding your loan options — and the builder’s incentives — can save you real money. Here’s the landscape.
Key Takeaways
- Building from scratch usually means a construction-to-permanent loan (one closing, converts to a mortgage).
- Buying a builder’s finished/spec home uses a standard mortgage — just with longer timelines.
- Long build times need an extended rate lock (and ideally a float-down).
- The builder’s preferred lender offers incentives — but not always the best overall deal.
- You almost always have the right to shop your own lender.
Two Very Different Scenarios
1. Building a custom home: you typically use a construction-to-permanent (C2P) loan — it funds the build in draws, then converts to a permanent mortgage at completion, with a single closing. 2. Buying a builder’s spec or to-be-built home: you use a normal purchase mortgage; the difference is the closing may be months out, which affects your rate lock.
How Construction-to-Permanent Works
A C2P loan covers the land and construction, releasing funds to the builder in stages (“draws”) as work is completed. During construction you often pay interest only on what’s drawn. At completion it converts to a standard 15- or 30-year mortgage — no second closing, no second set of costs.
Rate Locks on a Long Build
If your home won’t be done for 6–12 months, a standard 30- or 60-day rate lock won’t reach closing. You’ll want an extended lock — and ideally one with a float-down so you can capture a lower rate if the market improves before you close.
Extended locks and float-downs vary a lot between lenders. Line this up before you’re under contract on a build, not the month before closing.
The Builder’s Preferred Lender: Read the Fine Print
Builders often offer incentives — closing-cost credits, upgrades, or rate buydowns — if you use their in-house or preferred lender. Sometimes that’s a genuinely great deal. Other times the incentive is offset by a higher rate or fees. The only way to know is to get a competing quote.
You generally have the right to use any lender. Take the builder’s offer, bring it to us, and we’ll tell you honestly whether it beats shopping 50+ lenders — or whether the incentive is worth it.
Florida-Specific Considerations
Insurance and wind mitigation matter on new builds — newer homes often earn strong insurance credits, which helps your qualifying payment. Watch CDD fees in master-planned communities; they affect your monthly cost and your debt-to-income ratio.
Building or buying new in Florida? Let’s compare your options against the builder’s offer — free.
Get Pre-Approved →Frequently Asked Questions
What is a construction-to-permanent loan?
A single loan that funds your home’s construction in stages and then converts to a standard permanent mortgage at completion — one closing, one set of costs, instead of two separate loans.
Do I need a special loan to buy a builder’s spec home?
No — a finished or to-be-built builder home uses a standard purchase mortgage. The main difference is timing: if closing is months away, you’ll want an extended rate lock.
Should I use the builder’s preferred lender?
Sometimes. Builders offer real incentives to use their lender, but those can be offset by a higher rate or fees. Get a competing quote and compare the total cost — you almost always have the right to shop.
How do rate locks work on a long build?
For builds 6–12 months out, you need an extended rate lock so your rate holds through closing. A float-down feature lets you capture a lower rate if the market improves before you close.
What are CDD fees on Florida new construction?
Community Development District fees fund infrastructure in many master-planned Florida communities. They add to your monthly cost and count in your debt-to-income ratio, so factor them into your budget from the start.
Finance Your New Florida Home the Smart Way
Bring us the builder’s offer and your plans — we’ll structure the financing and tell you honestly how it stacks up. Free, no obligation.