Insights / What do construction loans cost in Miami and South Florida?
July 24, 2026
What do construction loans cost in Miami and South Florida?
A construction loan in Miami or South Florida costs more than a standard purchase loan because you're financing land, a builder's risk insurance policy, and interim interest before the home even has a certificate of occupancy. Florida's FHA and conforming loan limits follow the same county-by-county schedule used everywhere else, and FHA's one-time-close construction program gives you 11 months to complete the build. The real local wrinkle isn't the loan limit, it's whether Miami-Dade or Broward permitting and wind mitigation requirements let you finish inside that window.
Builders and buyers searching for construction loans in Miami or across South Florida usually want two things: a real cost breakdown, and a straight answer on whether local rules will slow the project down. Both matter more here than in a lot of markets, because coastal insurance requirements and county permitting are their own animals. Here's how the pieces fit together.
Jesse's take: Almost every single time I talk to somebody on a first call, they always say that they've never heard of these low down payment construction loans. The common assumption is that you need 20% at a minimum in order to do construction. But thankfully, that isn't the truth.
How much does a construction loan actually cost in South Florida?
You're financing more than a house. A construction loan typically covers the lot (or credits equity if you already own it), the hard construction costs the builder bills against, a builder's risk insurance policy while the structure is unfinished, interim interest on funds as they're drawn, and a contingency reserve for change orders. With an FHA one-time-close construction loan through the FHA construction program, the land, the build, and the permanent mortgage are one loan and one closing, so you're not paying two sets of closing costs. A conventional construction-to-permanent loan through conventional financing works similarly but follows Fannie Mae and Freddie Mac guidelines instead of FHA's.
Coastal insurance is the line item that catches people off guard. Builder's risk premiums in Miami-Dade and Broward run higher than inland markets because of wind exposure, and that premium has to be budgeted into the draw schedule, not treated as an afterthought at closing.
| Feature | FHA construction-to-permanent | Conventional construction-to-permanent | Commercial bridge/construction |
|---|---|---|---|
| Occupancy | Owner-occupied primary residence | Owner-occupied or second home | Investment, spec, or non-owner builds |
| Closings | One closing (one-time close) | One or two closings, lender-dependent | One closing, short term, refinance later |
| Build timeline | Up to 11 months to complete construction | Set by the lender, often a similar window | Negotiated with the lender, more flexible |
| Down payment/equity | FHA minimum down payment rules apply | Typically more equity required than FHA | Equity-based, higher than residential minimums |
| Best for | Owner-builders who qualify for FHA | Buyers wanting stronger long-term terms | Spec builders, investors, tight FHA timelines |
Do Florida's loan limits work differently for construction loans?
No. FHA and conforming loan limits in Florida follow the same annual, county-by-county schedule set by HUD and the Federal Housing Finance Agency that applies to any home purchase. Most South Florida counties, including Miami-Dade and Broward, sit at the standard limit tier rather than the high-cost tier, but the exact dollar figure changes every year, so check the current number on the loan limits lookup tool before you size a budget. The wrinkle with construction is that the total you're financing, land plus hard costs plus soft costs, has to fit under that limit for the loan to stay FHA or conforming. If the total build cost pushes past it, you're looking at a jumbo loan or, for investment and spec builds, non-QM financing instead.
How does wind mitigation and insurance change the numbers?
Wind mitigation affects your insurance cost, not your loan approval directly. Florida law requires insurers to offer credits for wind-resistant features such as impact windows, hip roofs, and reinforced roof-to-wall connections, and new construction in a high-velocity hurricane zone like Miami-Dade or Broward is already built to Florida Building Code wind provisions, so most new homes qualify for meaningful credit once the wind mitigation inspection happens after completion. Before that inspection exists, though, you're carrying a builder's risk policy priced for an unfinished structure, and the lender wants proof that a homeowners policy will be in place and affordable before the final draw. Coastal insurance availability has tightened in recent years, and an unexpectedly high premium quote can move your qualifying debt-to-income ratio enough to matter, so get a homeowners insurance quote early in the build, not at the end.
Can Miami-Dade or Broward permitting timelines blow past the FHA window?
Yes, and it happens more in South Florida than in most markets. Plan review, Notice of Acceptance verification for windows, doors, and roofing systems required in the high-velocity hurricane zone, and flood zone or setback reviews can all add time that a builder's original schedule didn't account for. FHA's construction-to-permanent program is built around an 11-month window to complete the home, and coastal permitting doesn't always cooperate with that clock. If a delay looks likely, the fix isn't to panic, it's to talk to your loan officer early about restructuring into a commercial bridge and construction loan, which gives more flexibility on timeline, then refinance into a permanent residential loan once the certificate of occupancy is issued.
FHA construction vs. a bridge or commercial construction loan: which fits?
FHA construction-to-permanent is built for an owner who intends to live in the finished home and qualifies under FHA's owner-occupancy and credit rules. A commercial bridge/construction loan fits differently: it's suited to spec building, investment properties headed for the investment property side of the business, or any build where the timeline or occupancy plan doesn't match FHA's owner-occupied structure. Builders who know permitting in their county runs long often start with the bridge loan by design instead of racing the FHA clock and hoping for the best.
A real scenario
A borrower planned to build a single-family home on a lot he already owned in unincorporated Miami-Dade County, financing the build with an FHA one-time-close construction loan. The plan review and Notice of Acceptance verification for the impact windows and roofing system, standard steps in Miami-Dade's high-velocity hurricane zone, took longer than the builder's original schedule assumed. Add a flood zone review and a county request to revise a setback, and the projected completion date crept past FHA's 11-month construction window. Jesse restructured the file into a commercial bridge-construction loan, which gave the builder the runway to finish the project properly. Once the certificate of occupancy was issued and the wind mitigation inspection was complete, the loan was refinanced into a permanent conventional mortgage sized to the finished home's appraised value.
Frequently asked questions
How much does a construction loan cost in Miami or South Florida?
Construction loans cost more upfront than a standard purchase loan. You're paying for the land or lot, a builder's risk insurance policy, interim interest during the draw schedule, and often a higher rate than a finished-home mortgage. An FHA one-time-close construction loan wraps the land, construction, and permanent mortgage into one loan so you close once instead of twice.
What are Florida's loan limits for a construction loan?
Florida uses the same FHA and conforming loan limits as any other home purchase, set per county each year. Miami-Dade, Broward, and most South Florida counties fall at the standard limit tier rather than the high-cost tier, so check the current figure on the loan limits lookup before you size a construction budget.
How does wind mitigation affect a construction loan?
Wind mitigation affects your insurance cost, not your loan approval directly. Florida law requires insurers to offer credits for wind-resistant features like impact windows and reinforced roof-to-wall connections, and new construction in Miami-Dade's or Broward's high-velocity hurricane zone typically qualifies for that credit once the post-completion wind mitigation inspection is done.
How long do I have to finish building under an FHA construction loan?
FHA's one-time-close construction program gives you 11 months to complete the build. That window covers the construction period only; the loan converts to a permanent mortgage once the home is finished and passes final inspection.
What happens if permitting runs past the FHA construction window?
You either request more time or restructure the loan. In South Florida, plan review, Notice of Acceptance verification, and flood zone or setback reviews can push a build past FHA's 11-month window, and a common fix is moving the file to a commercial bridge-construction loan and refinancing into a permanent mortgage once the home is done.
Do I need builder's risk insurance during construction?
Yes, builder's risk insurance is required while the home is unfinished. It covers the structure during the build and is separate from the homeowners policy you'll need once the certificate of occupancy is issued.
Is a commercial bridge loan a better fit than FHA construction for a spec build?
Usually, yes. FHA construction-to-permanent is built for an owner who will live in the home, while a commercial bridge and construction loan fits spec building, investment properties, and timelines that don't match FHA's owner-occupancy rules or its build window.
Do Miami-Dade and Broward have extra requirements beyond the loan itself?
Yes, both counties enforce high-velocity hurricane zone building code provisions on new construction. That means Notice of Acceptance product approvals for windows, doors, and roofing, which adds review time that a standard construction schedule elsewhere in the state wouldn't need to account for.
Reviewed by Jesse Gonzalez, NMLS #278103
This article is for general information only and is not a loan approval, rate quote, or financial advice. Program guidelines change and every file is different, so talk to a licensed loan officer about your scenario. True Blue Lending Corporation, NMLS #2380218. Equal Housing Opportunity.