The Tampa Bay area, including Hillsborough, Pasco, Pinellas and Polk counties, has added residents steadily for years. That growth supports new spec homes, build-to-rent communities and infill houses on older city lots.
Building in Florida comes with its own set of costs and rules, though. This guide explains how ground-up construction financing works for Tampa-area investors and what to budget for before you break ground.
How Ground-Up Construction Financing Works
A ground-up construction loan is short-term, business-purpose financing for building a new investment property. The lender funds the lot, if you are buying one, and then releases construction money in draws as work is completed and inspected.
On qualified projects, the program Borrowers Capital offers access to can finance:
- Up to 100% of the land purchase
- Up to 100% of the approved construction budget
- Up to 75% of as-completed value, the overall cap
Qualification starts at a 600 credit score and one completed project. Loans go up to $3 million, with larger projects reviewed by exception. Plan on verified liquidity of about 10% of the construction budget, plus six months of payments, plus closing costs and third-party fees.
A Tampa-Area Example
| Item | Amount |
|---|---|
| Lot purchase | $110,000 |
| Construction budget | $380,000 |
| Total project cost | $490,000 |
| Appraised completed value | $690,000 |
| 75% of completed value | $517,500 |
The land and build fit under the cap with about $27,500 of room. Lot prices vary widely across the region. Close-in Tampa lots cost more, while parts of Pasco and Polk counties offer cheaper land with longer commutes. The completed value, not the lot price, decides whether the deal works.
Florida-Specific Costs and Rules
Florida closing taxes
Florida has taxes that can add up on a construction loan:
- Documentary stamp tax on the note: $0.35 per $100 of the loan amount.
- Nonrecurring intangible tax: $0.20 per $100 ($2 per $1,000) of debt secured by Florida real estate.
- Documentary stamp tax on the deed: $0.70 per $100 of the price. The seller usually pays this under standard contracts, but it is negotiable.
On a $490,000 loan, the note stamps come to about $1,715 and the intangible tax to about $980. That is roughly $2,700 before title, recording and lender fees, so include it in your cash-to-close plan.
Contractor licensing
Florida requires a state license for most construction work. Contractors are licensed through the Construction Industry Licensing Board (CILB), part of the Florida Department of Business and Professional Regulation (DBPR). For new homes, the common license types are:
- Certified General Contractor (CGC): any building type and size
- Certified Building Contractor (CBC): commercial and residential up to three stories
- Certified Residential Contractor (CRC): one- to three-family homes up to two stories
Check your builder’s license on the DBPR website before you sign a contract. Your lender will ask for it.
Flood zones and insurance
Much of Tampa Bay sits at low elevation, and flood zones affect both building rules and insurance costs. Before buying a lot:
- Check the FEMA flood zone and the lot’s elevation.
- Ask the local building department about required finished floor elevation.
- Get insurance quotes for builder’s risk, wind and flood early.
Insurance can be one of the biggest surprises in a Florida budget. It also affects how renters or buyers value the finished home.
Permitting
The City of Tampa issues permits inside city limits. Unincorporated Hillsborough County and nearby counties each run their own building departments. New homes are built to the Florida Building Code, including its wind-load requirements, so your plans should be engineered for local design wind speeds.
What a Strong Submission Includes
- Lot contract or deed, survey and flood zone information
- Plans, engineering and permit status
- A line-item budget with contingency
- Builder license, insurance and project history
- Comparable new-construction sales nearby
- A clear exit: sale, rental, or refinance into a DSCR rental loan
The Investment Property Loan Document Checklist covers everything lenders typically request.
Price Your Tampa Build
Run your numbers in the 100% Financing Calculator, learn more about our ground-up construction program, or submit your project for a preliminary review.
Sources: Florida Department of Revenue: Documentary Stamp Tax Overview, NASCLA: Florida Construction Industry Licensing Board.
Disclosure
Borrowers Capital LLC provides access to business-purpose real estate financing through correspondent and private lending channels. Program availability, leverage, pricing, fees, loan amounts and approval requirements vary by transaction and are subject to applicable lender guidelines, borrower and property eligibility, valuation, due diligence, underwriting and final approval. References to 100% financing describe the potential financing of eligible project costs and do not guarantee a zero-cash transaction or loan approval. Borrowers Capital LLC may receive compensation in connection with arranging a transaction. This article is general information and does not constitute a commitment to lend, an offer of credit, or financial, legal or tax advice.