Three files, not one
With an existing home, underwriting reviews the borrower and the property. With construction, there is a third party in the transaction: the builder. All three are typically reviewed, and a gap in any one of them can stall the file. The items below reflect what borrowers commonly need to provide, but specific requirements vary by program and lender, and all financing is subject to credit approval, appraisal, property eligibility and applicable guidelines, which are subject to change. If you already own the lot, see how using land equity for construction can change some of these requirements, or review how construction loans work for the bigger picture.
Borrower requirements
Requirements below are typical starting points. Actual credit, income, asset and debt-to-income guidelines vary by loan program and lender, and can change over time.
- Credit. Minimum scores vary by program and lender. Construction programs often expect somewhat stronger credit than a comparable purchase because the transaction carries more moving parts, but exact thresholds depend on the specific program.
- Income and employment. Recent pay stubs, W-2s and tax returns are typically requested; two years of returns plus business documentation are common for self-employed borrowers, though documentation needs vary by lender.
- Assets and reserves. Bank and investment statements documenting funds for your contribution, closing costs and reserves are generally requested. Reserve amounts, if required, vary by program, and reserves matter more on construction files because projects can run long or over budget.
- Debt-to-income. Existing obligations are typically counted, including any current mortgage or rent you will be paying while the home is being built. Allowable ratios vary by program.
- Identification and occupancy intent. Government ID, plus documentation of how you will occupy the completed home, is generally required — programs can treat primary residences differently from second homes.
Builder requirements
Your builder is effectively reviewed alongside you. Depending on the lender and program, expect requests for:
- An active Florida contractor license in good standing
- General liability and workers' compensation insurance certificates
- A builder resume or profile, including years in business and comparable projects
- References from completed builds
- A signed, fixed-scope construction contract
- Financial information in some cases, particularly on larger projects
Owner-builder arrangements — where the homeowner acts as general contractor — are approved under only some programs and lenders, and often subject to additional conditions. If that is your plan, raise it at the very beginning of the conversation so we can identify which options, if any, may fit.
Project documentation
- Complete plans — floor plans, elevations and structural detail, not concept sketches
- Written specifications covering materials, finishes, systems and allowances
- A line-item construction budget that includes site work, permits, impact fees and a contingency
- The construction contract, signed by you and the builder
- A draw schedule aligned with construction milestones
- A realistic construction timeline that fits within the loan's construction term
Property and land requirements
These are common lender expectations; specific property eligibility depends on the program, the parcel and the lender's guidelines.
- Clear, marketable title to the lot, with any existing lot loan addressed
- A current survey showing boundaries, setbacks and easements
- Zoning and deed restrictions that permit the planned home
- Legal access to the parcel
- Connection to municipal water and sewer, or an approved well and septic plan where those utilities are not available
- Flood zone determination and any elevation requirements that affect design or insurance
- Permits issued or clearly obtainable before construction begins, on the county's timeline
Borrowers already building on land you already own generally still need to satisfy these property items, even though the acquisition step is not part of the transaction.
Appraisal
The as-completed appraisal values the home as though it were already built, based on the plans, specifications and budget. It is one of the most important numbers in the file. If the appraised value comes in below cost — which can happen with highly customized homes, barndominiums in thin comparable markets, or specification levels well above the neighborhood — the borrower generally covers the difference.
Insurance in Florida
Florida adds a layer other states do not. Plan for builder's risk coverage during construction and a homeowner's policy at completion, plus windstorm coverage and, in a designated flood zone, flood insurance. Availability and cost vary considerably by county, construction type and proximity to the coast, and coastal or windstorm-exposed properties can face additional underwriting scrutiny on insurability alone. It is worth pricing coverage early — insurance cost is factored into your qualifying ratios, not just your monthly budget.
How to prepare a strong file
- Get prequalified before signing a construction contract or buying a lot
- Choose a builder who has been through lender review before
- Insist on a detailed, itemized budget rather than a lump-sum figure
- Include a contingency line — most projects use at least part of it
- Gather income, asset and land documentation early
- Get insurance quotes before finalizing the budget
When your package is together, the construction loan process page shows what happens next, or reach out to us directly.