The Florida real estate construction market in late 2025 stands at a pivotal juncture, characterized by a complex interplay of stabilizing macroeconomic indicators, evolving demographic patterns, and a rapidly transforming capital landscape. As the state continues to attract net migration at rates exceeding the national average, the demand for residential and commercial infrastructure remains acute. However, the mechanisms for financing this growth have shifted fundamentally. Traditional institutional lenders, constrained by regulatory tightening and conservative risk models, have ceded significant ground to agile, private money lenders capable of navigating the velocity of the modern market.
This report serves as an exhaustive analysis of the construction lending ecosystem in Florida, designed to function as a definitive resource for developers, investors, and industry stakeholders. It goes beyond surface-level observations to deconstruct the mechanics of securing capital in the current environment. Central to this analysis is the critical role of direct private lenders, specifically Capital Funding Financial, whose tailored financial products—ranging from Ground Up Construction loans to Fix and Flip financing—offer a necessary liquidity bridge for sponsors aiming to capitalize on Florida’s housing deficit.1
We examine the structural mechanics of construction financing, the specific impact of the 2025 Florida Building Code updates, regional market disparities between South Florida and the Panhandle, and the strategic advantages of asset-based underwriting over traditional credit-centric models. Through a detailed exploration of leverage ratios (LTC/LTV), interest rate forecasts, and exit strategies, this document provides a blueprint for navigating the capital stack in one of America’s most dynamic real estate markets.
Florida’s construction sector is the physical manifestation of powerful demographic and economic currents. By late 2025, Florida’s population is projected to exceed 22 million, driven by a dual engine of domestic migration from high-tax northeastern states and international immigration.3 This influx is not merely adding headcount; it is fundamentally altering the socioeconomic profile of the average Floridian renter and homebuyer, thereby shifting the demand curve for specific asset classes.
Unlike previous boom cycles fueled by speculative entry-level buying, the current cycle is defined by the migration of wealth. High-net-worth individuals and corporate entities relocating to hubs like West Palm Beach, Miami, and Tampa have created a bifurcated market. There is insatiable demand for luxury single-family infrastructure and high-amenity multifamily developments, while the workforce housing sector faces a critical supply shortage. This demographic shift directly influences construction lending. Lenders are increasingly bullish on high-spec, luxury Ground Up Construction projects in coastal zones, where the end-buyer’s liquidity reduces exit risk.4 Conversely, financing for workforce housing requires creative capital structuring, often necessitating the higher leverage points (up to 85% LTC) offered by private lenders like Capital Funding Financial to make the developer’s equity multiple viable.2
The expansion of the financial and tech sectors in South Florida—often dubbed “Wall Street South”—has solidified the commercial office and mixed-use sectors. Despite a national softening in office demand, Florida’s Class A office market, particularly in Palm Beach Gardens and Brickell, shows resilience.5 This corporate presence necessitates supporting infrastructure: residential units for employees, retail centers, and logistics hubs. Consequently, Commercial Bridge Loans have become a vital tool for developers acquiring land or value-add properties in these emerging corporate corridors.2
The cost of capital remains the single most significant variable in construction feasibility. By late 2025, the Federal Reserve’s monetary policy has begun to shift towards easing, with the federal funds rate hovering in the 3.75% to 4.00% range.6 This macroeconomic backdrop has profound implications for the private lending sector.
Mortgage rates for end-buyers are stabilizing in the high 5% to low 6% range.7 This stabilization is crucial for the “exit” phase of a construction loan. Developers can now underwrite projects with greater confidence that end-buyers will qualify for permanent financing. The stabilization of rates reduces the risk of “stalled exits,” where a developer completes a project but cannot sell it. This reduced exit risk allows private lenders to offer more aggressive terms on Ground Up Construction loans, knowing the liquidity event (sale or refinance) is secure.2
Private construction loans typically float over the Secured Overnight Financing Rate (SOFR). With SOFR stabilizing, the volatility in monthly interest-only payments for developers has decreased. Capital Funding Financial, for instance, offers rates starting at SOFR + 5.50%.4 For a developer, this transparency allows for precise hedging and budgeting of interest reserves.
While capital costs have stabilized, “hard costs” (materials and labor) continue to exert upward pressure on construction budgets. Surveys indicate that 67% of construction firms in Florida report difficulties filling open positions.8 This labor shortage extends construction timelines, increasing the carrying costs for developers.
The implication for loans is significant. Lenders must now build more robust contingencies into the loan amount. A standard 5% contingency is often insufficient; 10-15% is becoming the prudential norm to prevent mid-project capital shortfalls.9 Furthermore, the volatility in material prices necessitates a flexible draw schedule. Lenders like Capital Funding Financial, which manage their own balance sheet, can often approve draw requests faster than traditional banks, ensuring that subcontractors are paid promptly and materials are secured before price spikes occur.2
Understanding the mechanics of construction loans is prerequisite to securing favorable terms. Unlike a traditional mortgage, which is a static lump sum secured by a stabilized asset, a construction loan is a dynamic financial instrument characterized by staged funding, variable risk, and intense oversight.
In any development deal, the “Capital Stack” represents the layers of financing that fund the project.
Senior Debt (First Lien): This is the primary construction loan. It typically covers 70-85% of the project cost. This is the space occupied by Capital Funding Financial.2
Mezzanine Debt / Preferred Equity: Subordinate capital used to fill gaps, usually expensive.
Common Equity: The developer’s skin in the game (cash).
The goal of an efficient capital stack is to maximize the Senior Debt component because it is cheaper than equity. By utilizing a high-leverage provider like Capital Funding (offering up to 90% LTC in some cases), a developer minimizes their equity contribution, thereby amplifying their Return on Equity (ROE).2 This leverage is particularly potent in the current market where land prices have appreciated, making the “basis” of the project higher.
Ground-Up Construction loans are tailored for vacant land development.
Loan-to-Cost (LTC): This is the ratio of the loan amount to the total cost of the project (Land + Hard Costs + Soft Costs). Private lenders typically go up to 85% LTC.2
Loan-to-Value (LTV): This is based on the “As-Completed” or “As-Stabilized” value. This is critical because it gives the developer credit for the value they create through construction.
The Dutch Interest vs. Simple Interest Debate:
Dutch Interest: Interest is charged on the entire loan amount from Day 1, regardless of whether funds have been drawn. This is expensive and common among predatory lenders.
Simple Interest on Drawn Balance: Interest is charged only on the funds actually disbursed. Capital Funding Financial utilizes this model 4, which significantly reduces the effective cost of capital for the borrower during the early stages of construction when draw balances are low.
These are bridge loans designed for the acquisition and renovation of existing structures. In the competitive Florida market, distressed assets receive multiple offers. A Fix and Flip loan that closes in 7 days 2 functions like a cash offer, allowing investors to win bids against those relying on slow bank financing.
Renovation Holdbacks: The lender funds a portion of the purchase price (e.g., 85-90%) and holds 100% of the renovation budget in a reserve account. These funds are released in arrears as work is completed.10
Speed is Currency: The ability to close quickly is often the deciding factor in winning a deal. Capital Funding’s expedited underwriting allows investors to compete with all-cash buyers.
For larger commercial assets (multifamily, office, retail) that are not yet stabilized (i.e., low occupancy or needing renovation), banks often refuse to lend. These loans bridge the gap between acquisition and stabilization. Once the property is renovated and leased (stabilized), the borrower refinances into a lower-rate permanent loan (CMBS, Agency, or Life Co).
Terms: Typically 12-24 months, interest-only. Capital Funding provides these up to $100 million.1
Strategic Use: Investors use these loans to acquire underperforming assets, inject capital for improvements (Capex), and raise rents to market rates, thereby increasing the asset’s value before seeking permanent financing.
In a market crowded with brokers and intermediaries, Capital Funding Financial distinguishes itself as a direct lender. The distinction is non-trivial. Direct lenders lend from their own balance sheet (or discretionary funds), eliminating the “intermediary risk” where a broker promises a deal but cannot control the final credit decision.11
Snippet analysis confirms that Capital Funding manages a large balance sheet and is backed by a family office.11
Certainty of Execution: When a term sheet is issued by a direct lender, the capital is verified. There is no “shopping” of the deal to third parties.
Speed: Without a credit committee meeting that meets only once a month (typical of community banks), Capital Funding can issue a Letter of Intent (LOI) in 24 hours and close in as few as 7 days.2
Asset-Based Underwriting: Traditional banks focus on the borrower’s global cash flow and tax returns (DTI ratios). Capital Funding focuses primarily on the asset—the profitability of the project and the value of the collateral. This allows them to fund borrowers who may have complex tax structures or are self-employed, utilizing “No Tax Return” programs.2
This program is specifically engineered for Florida’s speculative housing market.
Loan Amounts: $500,000 to $50 Million+. This range accommodates everything from a single luxury spec home in Naples to a mid-sized multifamily development in Orlando.2
Leverage: Up to 85% LTC and 70-75% of Stabilized Value. This high leverage preserves the developer’s liquidity for other projects.
Documentation: “Light Doc” underwriting. No income verification is typically required; the focus is on the builder’s track record and the project’s viability.2
For more details on this specific program, investors can visit the Ground Up Construction Program page.
Designed for velocity.
Closing Timeline: 7-14 days.
Leverage: Up to 90% LTC. This is market-leading leverage, allowing investors to enter deals with minimal capital down (often just 10-15% of the purchase price plus closing costs).10
Flexibility: Lending on single-family, multifamily, and mixed-use properties.
To explore the parameters of this program, refer to the Fix and Flip Program page.
For investors navigating the Capital Funding website, the synergy between these products is key. A developer might utilize a Fix and Flip Loan to acquire a tear-down property, then transition into a Ground Up Construction Loan once permits are approved. Eventually, if they choose to hold the asset for passive income, they can refinance into a Rental DSCR Loan (Debt Service Coverage Ratio loan), which Capital Funding also offers.12 This “lifecycle lending” model reduces transaction friction, as the lender is already familiar with the asset and the sponsor.
Florida is not a monolith. Construction lending terms, risk profiles, and absorption rates vary significantly across its major metros.
South Florida remains the epicenter of high-density development. In Q2 2025, multifamily cap rates in Miami held steady around 5.6%, reflecting a market that, while expensive, retains strong fundamental demand.13
Construction Trend: The scarcity of land in Miami and Boca Raton drives a “vertical” construction trend. Developers are increasingly utilizing Fix and Flip loans not just for renovation, but for complete teardowns and rebuilds of single-family homes in affluent zip codes like Royal Palm Yacht & Country Club.11
Lending Climate: High land costs necessitate lenders who understand “As-Stabilized” value. A lender focusing solely on current value will fail to provide sufficient proceeds. Capital Funding Financial’s approach, which considers up to 75% of the stabilized value, is critical in these high-barrier-to-entry markets.2
The I-4 corridor remains the logistics and tourism backbone. Orlando and Tampa are seeing vacancy rates in multifamily hover around 6.2% to 6.5%, slightly healthier than the national average.13
Construction Trend: The abundance of developable land allows for horizontal sprawl—master-planned communities and build-to-rent (BTR) subdivisions.
Lending Climate: Lenders here favor Ground Up Construction loans for single-family portfolios. The risk profile is lower due to lower land basis, but the scale of projects often requires lenders with the balance sheet capacity to fund loans up to $50 million.2
Jacksonville is emerging as a logistics powerhouse. The construction market here is heavily skewed towards industrial and affordable residential.
Construction Trend: Industrial cap rates are compressing, signaling high value.13
Lending Climate: Construction loans here often require a nuanced understanding of industrial value-add strategies.
Recovery from Hurricane Ian continues to drive construction volume. This region has stringent building codes, making construction costs per square foot higher.
Construction Trend: Resilient building—concrete block, impact glass, elevated structures.
Lending Climate: Lenders must be comfortable with higher construction budgets relative to the land value.
Navigating the procedural complexities of Florida construction lending requires discipline. The process can be broken down into four distinct phases: Origination, Underwriting, Closing, and Servicing (Draw Management).
Before identifying a property, the investor should engage with the lender to establish borrowing capacity.
The “Proof of Funds” Letter: In Florida’s competitive market, listing agents often require a Proof of Funds or Pre-Approval letter before accepting an offer. Capital Funding provides swift issuance of these documents.14
Sponsor Vetting: The lender evaluates the “Sponsor” (borrower). Key metrics include:
Experience: Have they built similar projects before? (Track record is heavily weighted).
Liquidity: Do they have the cash to close (down payment + closing costs) and liquidity for interest reserves?
Credit: While asset-based, a minimum FICO (often 620-660) is checked to ensure no history of financial crimes or bankruptcy.10
Once a deal is under contract, the “heavy lifting” begins.
The Pro Forma: The borrower must submit a detailed budget. This is not a napkin sketch. It must itemize costs: Site work, foundation, vertical construction, roofing, finishes, permits, and soft costs (architectural, engineering).
Appraisal: The lender orders an appraisal that provides two values:
“As-Is” Value: The value of the land/property today.
“As-Completed” (ARV): The hypothetical value upon completion.
Insight: In Florida, appraisals must account for specific “hurricane hardening” premiums. A home built to 2025 codes with impact windows and concrete roofs commands a significant premium over older stock, and the appraisal must reflect this.15
General Contractor (GC) Validation: The lender will vet the GC. In Florida, the GC must hold a valid license (Certified General Contractor – CGC or Certified Residential Contractor – CRC). The lender checks the GC’s capacity—are they overleveraged with too many active jobs?
The Draw Schedule: This is the most critical document negotiated at closing. It dictates when money is released. A typical schedule has 5-10 draws tied to milestones (e.g., Foundation Pour, Framing Inspection, Drywall, Final).16
Notice of Commencement (NOC): Under Florida mechanics lien law (Chapter 713, Florida Statutes), an NOC must be recorded before construction begins. This protects the owner and lender from hidden liens. Capital Funding’s closing team ensures this is handled correctly to protect the first lien position.
This is where the “simple interest” benefit is realized.
Work Completion: The builder completes a phase (e.g., pouring the slab).
Draw Request: The borrower submits a request for reimbursement.
Inspection: The lender sends a third-party inspector to verify the work. In Florida, inspection fees are typically $150 per visit.17
Title Update: A “date down” endorsement is run to ensure no subcontractors have filed liens.
Disbursement: Funds are wired, usually within 24-48 hours of approval.18
Strategic Warning: Florida’s lien laws are strict. If a subcontractor is not paid, they can lien the property even if the owner paid the GC. Lenders mitigate this by requiring “Partial Lien Waivers” from the GC and major subs for every draw. Borrowers must understand that no funds are released without these waivers.
Investing in Florida requires navigating a unique regulatory environment, specifically shaped by climate resilience and recent legislative reforms.
By late 2025, the industry is operating under the strictures of the latest Florida Building Code (FBC), with the 9th Edition drafting in progress.19
Wind Load Requirements: New construction in coastal zones (HVHZ – High Velocity Hurricane Zones like Miami-Dade) must meet elevated wind load standards. This impacts the cost of windows, roofing, and structural engineering.
Energy Efficiency: Enhanced insulation standards (R-20 for roofs) and solar-readiness are now often mandatory or heavily incentivized.15
Cost Implication: These codes increase the “hard cost” per square foot. However, they also increase the “As-Completed” value by lowering insurance premiums for the end-user—a critical selling point.
A major bottleneck in Florida construction has been permit delays. The passage of House Bill 267 (effective partially in 2025) has introduced permit simplification measures.19
Streamlined Issuance: Local governments are now subject to tighter deadlines for permit review.
Private Providers: The law expands the ability of developers to use “Private Providers” for plan review and inspections, bypassing slow municipal building departments.
Insight for Borrowers: Using a Private Provider costs more upfront but can shave months off the construction timeline. In a high-interest rate environment, the savings in carrying costs (interest reserves) often outweigh the cost of the Private Provider. Smart developers use Construction Loans to fund these soft costs.
The Florida property insurance market remains volatile.
Builders Risk Insurance: Lenders require this policy during construction. Rates have risen.
Impact on Exit: The “insurability” of the final product determines its value. Older homes are becoming uninsurable or prohibitively expensive. This creates a massive arbitrage opportunity for Ground Up Construction and Fix and Flip investors who modernize homes to current codes, making them insurable. This “insurability premium” is a key driver of ROI in 2025.
Successful construction investing is ultimately a math problem. This section outlines how to structure a deal using Capital Funding Financial’s parameters.
Consider a hypothetical project in Port St. Lucie (a high-growth market).
Land Acquisition: $150,000
Hard Construction Costs: $350,000
Soft Costs (Plans, Permits, Closing): $50,000
Total Project Cost: $550,000
As-Completed Value (ARV): $750,000
Financing Structure with Capital Funding (Ground Up Program):
Max LTC (85%): 85% of $550,000 = $467,500 Loan Amount.
Equity Required: $550,000 – $467,500 = $82,500 (plus closing points).
LTV Check: Loan ($467.5k) / ARV ($750k) = 62.3% LTV. (Well within the 70-75% limit).2
Return on Investment (ROI):
Gross Profit: $750,000 (Sale) – $550,000 (Cost) = $200,000.
Less Loan Interest: (Approx. 12 months @ 10% on drawn balance) ~ $25,000.
Less Selling Costs: (5% commissions) $37,500.
Net Profit: $137,500.
Cash Invested: ~$90,000.
ROI: $137,500 / $90,000 = 152%.
This exemplifies the power of leverage. Without the loan, the investor would need $550,000 cash to make $137,500 (25% ROI). The Ground Up Construction Loan amplifies the return by 6x.
With floating rates (SOFR + Spread), rising rates can eat into profits.
Strategy: Over-raise the Interest Reserve. If you think the build will take 12 months, budget for 15 months of interest.
Strategy: Speed. The faster the build, the less interest paid. Utilizing Capital Funding’s fast draw processing 2 ensures the GC doesn’t stop work waiting for payment, keeping the timeline tight.
For investors building a portfolio, the goal isn’t to sell but to hold.
Buy/Rehab: Use a Fix and Flip Loan to buy a distressed 4-plex.
Rent: Lease it up to stabilize income.
Refinance: Use Capital Funding’s DSCR Rental Loan to pay off the high-rate construction loan.12
Repeat: Pull out equity (Cash Out Refinance) to fund the next deal.
Multifamily remains the “darling” of the asset classes.
Trend: “Missing Middle” housing—townhome-style rentals and duplex/triplex infill projects.
Financing: Capital Funding offers Multifamily Bridge Loans specifically for value-add. This allows an investor to buy an older complex, renovate units to raise rents (forced appreciation), and then refinance.2
Cap Rate Compression: In markets like Tampa, renovating a Class C property into Class B can compress the cap rate, significantly increasing valuation.
The industrial sector in Florida is booming due to e-commerce and port expansion (JAXPORT, PortMiami).
Opportunity: Small-bay industrial warehouses (flex space) for local contractors and businesses.
Financing: Commercial Bridge Loans allow for the acquisition of vacant industrial buildings to fit them out for tenants. Once leased, the value skyrockets.
Not all money is created equal. The choice between a local hard money lender, a national direct lender, and a bank is strategic.
| Feature | Traditional Bank | Local Hard Money Guy | Capital Funding Financial |
| Speed | 60-90 Days | 3-10 Days |
3-7 Days 2 |
| Leverage (LTC) | 60-65% | 70-75% |
Up to 85-90% 2 |
| Interest Rate | Prime + 1-2% | 12-15% |
Starting at SOFR + 5.5% 4 |
| Recourse | Full Personal | Predatory Terms | Non-Recourse Options |
| Draw Process | Bureaucratic | Informal/Risky | Professional/Streamlined |
| Reliability | High (if approved) | Low (runs out of cash) | High (Family Office backed) |
Upfront Fees: Legitimate lenders do not charge “application fees” before issuing a term sheet.
“Loan-to-Own” Lenders: Some predatory lenders set borrowers up to fail with impossible draw schedules, hoping to foreclose and take the equity. Capital Funding’s reputation and reviews 14 suggest a partnership model focused on repeat business.
As 2026 approaches, the Florida construction market offers generational wealth-building opportunities for those who can access capital and execute efficiently. The “easy money” of the pandemic era is gone, replaced by a market that rewards professional discipline, strategic leverage, and speed.
The structural deficit in Florida housing, combined with the migration of wealth, creates a floor for asset values. However, the high cost of entry necessitates financial partners who offer high leverage and rapid execution. Capital Funding Financial has positioned itself as the premier partner for this environment. By offering a comprehensive suite of products—from Fix and Flip to Ground Up Construction—and stripping away the bureaucratic friction of traditional banking, they empower investors to move at the speed of the market.
For the Florida real estate investor, the strategy is clear:
Target resilient, insurable assets.
Leverage “private provider” permitting to beat timelines.
Partner with a direct lender like Capital Funding to secure high-leverage, reliable capital.
Execute with precision to capture the “creation value” in a supply-constrained market.
The window of opportunity is open. It is time to build.
For investors preparing their applications, the following summarizes the core parameters of the key Capital Funding Financial programs referenced throughout this report.
Best For: Spec home builders, infill developers.
Loan Size: $500k – $50M.
Max LTC: 85%.
Max LTV (Stabilized): 70-75%.
Term: 12-24 Months.
Rate: SOFR + Spread (Interest Only on Drawn Balance).
Key Benefit: High leverage reduces equity requirement; simple interest saves carrying costs.
More Info: Ground Up Construction Program
Best For: Rehabbers, value-add investors.
Loan Size: $200k – $25M.
Max LTC: 90% (Purchase + Reno).
Closing: 7-10 Days.
Key Benefit: Speed to closing allows for “cash-like” offers on distressed assets.
More Info: Fix and Flip Program
Best For: Value-add multifamily, transitional commercial assets.
Loan Size: $1M – $100M.
Max LTV: 75%.
Key Benefit: Non-recourse options available; flexible exit strategies into permanent financing.
More Info:(https://capitalfunding.com/services/)
For detailed inquiries and to request a Proof of Funds letter, investors are encouraged to visit the specific program pages on the Capital Funding Financial website.
| Metric | Value | Trend (YoY) | Source |
| Multifamily Cap Rate (Miami) | 5.60% | Stable | 13 |
| Multifamily Cap Rate (Tampa) | 5.40% | Compressing | 13 |
| Median Rent (Statewide) | $2,090 | +2.1% | 13 |
| Vacancy Rate (Statewide) | 6.9% | +1.1% | 13 |
| Const. Loan Rates (Private) | 9.5% – 12.5% | Stabilizing | 2 |
| Population Growth Est. | +1.8% | Positive | 3 |
| Cost Component | Traditional Bank Loan | Private Money (Capital Funding) |
| Down Payment | 35-40% ($350k-$400k) | 15-20% ($150k-$200k) |
| Closing Time | 60 Days | 10 Days |
| Interest Rate | ~7.5% | ~10.5% |
| Origination Points | 1% | 2-3% |
| Doc Requirements | Full Tax Returns, P&L | Asset-Based / Liquidity |
| Opportunity Cost | High (Lost deals due to slowness) | Low (Fast execution) |
(Note: While private money has a higher rate, the lower equity requirement and speed often result in a higher Internal Rate of Return (IRR) for the developer due to the ability to churn capital faster.)
This report is for informational purposes and does not constitute legal or financial advice. Loan terms are subject to change based on market conditions and borrower qualification.
In the realm of real estate development, capital is the raw material as vital as concrete or lumber. For Florida developers in 2025, the ability to secure reliable, flexible, and efficient financing is the primary determinant of project success. The landscape has shifted from a period of “easy money” to one of “smart money,” where the structure of the debt—its leverage, cost, and speed—matters as much as the asset itself.
This report serves as a navigational chart for this new terrain. We move beyond the basics to explore the sophisticated strategies utilized by top-tier developers who partner with direct lenders like Capital Funding Financial. We analyze why Ground Up Construction and Fix and Flip products have become the preferred instruments for agile investors, surpassing traditional bank debt in utility and execution speed.
To understand the lending market, one must first understand the underlying asset demand. Florida’s real estate market in late 2025 is driven by distinct structural forces that insulate it from some of the broader national cooling trends.
Despite a surge in permitting, Florida faces a chronic housing shortage. The state’s population growth continues to outpace housing starts.
Insight: The “months of supply” metric in many Florida markets remains below the 6-month equilibrium mark. This scarcity supports pricing power for developers, validating the Loan-to-Value (LTV) assumptions used in underwriting. When a lender like Capital Funding underwrites a loan at 75% of “As-Completed” value, the robust demand provides confidence that the completed value will hold.
The relocation of hedge funds (Citadel), tech firms, and family offices to South Florida has created a “multiplier effect.” High-income employees demand high-quality housing, retail, and services.
Construction Opportunity: This drives demand for “Mixed-Use” developments—projects that combine residential units with ground-floor retail. Capital Funding’s Mixed-Use lending program 10 is specifically designed for these complex asset classes that traditional banks often shy away from due to their hybrid nature.
For developers holding land or looking to acquire lots, GUC loans are the engine of growth.
A Ground Up Construction loan is a short-term, interest-only instrument.
Initial Advance: At closing, the lender typically funds a portion of the land acquisition (if not already owned) and the closing costs.
The Construction Holdback: The remainder of the loan (the construction budget) is placed in a restricted account.
The Draw: As the builder completes work (e.g., clearing the site, pouring the foundation), they submit a “Draw Request.” The lender verifies the work and releases funds.
Why Capital Funding Financial?
The friction in GUC loans usually occurs during the draw process. Banks are notorious for slow inspections and disbursements, which can cause subcontractors to walk off the job. Private lenders operate with urgency.
Snippet Insight: Capital Funding emphasizes “Fast Closings” and “Streamlined Underwriting”.2 This operational speed translates to the draw process, ensuring the project keeps moving.
Understanding the difference between Loan-to-Cost (LTC) and Loan-to-Value (LTV) is crucial.
Scenario: A developer buys a lot for $100k and needs $300k to build. Total Cost = $400k.
Bank Approach: A bank might offer 65% LTC. They lend $260k. The developer needs $140k cash.
Private Lender Approach: Capital Funding might offer 85% LTC.2 They lend $340k. The developer needs only $60k cash.
The Difference: The private lender reduces the developer’s cash requirement by 57%. This allows the developer to do two projects with the same amount of capital that would only fund one project with a bank.
The “Fix and Flip” market in Florida is evolving from simple cosmetic updates to substantial “heavy rehab” and additions.
In 2025, margins on simple “paint and carpet” flips are thin. The real profit lies in adding square footage (adding a bedroom/bathroom) or modernizing older 1970s stock to 2025 hurricane codes.
Lending Needs: These projects require loans that cover 100% of the renovation costs. Capital Funding’s program typically funds up to 90% of the purchase and 100% of the rehab 21, perfectly aligning with this strategy.
Many investors use the Fix and Flip loan not to sell, but to stabilize.
Workflow:
Acquire a distressed property with a Fix and Flip Loan.
Renovate it to rental standards.
Lease it to a tenant.
Refinance into a Rental DSCR Loan.12
Internal Synergy: Capital Funding offers both products, allowing for a seamless transition. The appraisal used for the rehab can sometimes be updated for the rental loan, saving costs and time.
Commercial real estate (CRE) in Florida is undergoing a transition. Older office buildings are being converted; retail centers are being repositioned.
Banks typically require a property to be 90% occupied and cash-flowing to lend. But how does an investor buy a 50% occupied building to turn it around?
The Solution: A Commercial Bridge Loan. This loan is based on the potential of the asset. It provides the capital to buy the building and the funds to improve it (Tenant Improvements/Leasing Commissions).
Capital Funding’s Role: With loans up to $100 Million 1, they can fund significant commercial repositioning efforts in major metros like Miami and Orlando.
Commercial bridge loans are floating-rate instruments.
Current Metrics: Rates often start at SOFR + 5.00% to 8.00%.2
Analysis: While higher than permanent debt, the cost is justified by the value creation. If an investor increases Net Operating Income (NOI) by 40% over 18 months, the interest cost is a small fraction of the equity gain.
The 2025 Florida Building Code mandates stricter adherence to wind mitigation.
Lender Requirement: Lenders will scrutinize the construction budget to ensure it includes compliant materials (e.g., impact windows). A budget that looks “too cheap” will be rejected because it likely relies on non-compliant materials.
Advice: Submit detailed, code-compliant budgets to underwriting. It builds credibility.
We cannot overstate the importance of the NOC in Florida.
Function: It signals the start of the job.
Risk: If a lender funds a loan after an NOC is recorded, their lien might be junior to contractor liens.
Process: Capital Funding’s closing agents will ensure the proper recording sequence: Mortgage recorded -> NOC recorded. This protects the capital structure.
In a fast-moving market, compiling tax returns and P&L statements for a bank loan is a competitive disadvantage.
Recommendation: Utilize Capital Funding’s “No Tax Return” / “Asset-Based” underwriting.2 The slight premium in rate is the cost of speed and certainty.
Design projects that are easy to insure.
Recommendation: For ground-up builds, go beyond the minimum code. Concrete roofs, elevated slabs, and secondary water barriers reduce insurance costs, increasing the asset’s value to the end buyer.
If you are a mortgage broker, partnering with a reliable direct lender is key to your reputation.
Recommendation: Capital Funding explicitly states they are “Broker Friendly” and protect the relationship.12 This allows brokers to offer these sophisticated products to their clients without fear of being circumvented.
The Florida construction market in late 2025 is robust but demanding. It rewards the bold but punishes the unprepared. The capital partner you choose is as critical as the general contractor you hire.
Capital Funding Financial offers the toolkit necessary for this environment: high leverage to maximize equity returns, speed to win deals, and the flexibility to navigate complex projects. Whether you are building a spec home in Boca Raton, flipping a condo in Tampa, or repositioning a warehouse in Jacksonville, their suite of Construction, Fix and Flip, and Commercial Bridge loans provides the financial foundation for success.
For the serious investor, the path forward involves aligning with a direct lender who views the project through the lens of asset value, not just credit scores. In doing so, you transform financing from a hurdle into a strategic advantage.
