If you are considering building with a construction loan in Florida, let’s point out why this is your logical choice. Florida has a business-friendly environment, with low taxes and few regulations, which is attractive for businesses in the construction industry. According to the Tax Foundation’s 2021 Tax Climate Index, Florida ranks 4th in the nation for its favorable business tax climate. Florida is also one of the fastest-growing states in the US, with a population that has been steadily increasing. At the same time, people increasingly leave states like New York and California. This growth has created a high demand for housing, commercial and public buildings, and infrastructure projects.
According to the US Census Bureau, Florida’s population grew by 14.6% between 2010 and 2020, much higher than the national average of 7.4%. The state also boasts a strong housing market, which means a high demand for new homes for ownership and rental purposes. According to the Florida Realtors Association, Florida’s housing market continued to perform well in 2021, with increased sales and prices even during the wave of Covid-19. Florida also has abundant natural resources, such as sand and limestone, essential for building construction. These resources are easily accessible and cost-effective, making it easier for builders and developers to source the materials they need for their projects.
Florida has invested heavily in infrastructure, such as roads, bridges, and ports, creating jobs and economic growth. The state’s 2021-2022 budget includes $10 billion for transportation projects alone, creating a significant demand for construction and engineering services. Overall, these factors have contributed to Florida’s strong economy for building, making it an attractive location for businesses in the construction industry.
How Construction Loans Work in Florida
Construction loans in Florida work similarly to the same loans in other states. The main difference is that they are subject to the laws and regulations of the state. The process of obtaining a construction loan here typically begins with the borrower submitting a loan application and providing detailed plans and specifications for the new project. The lender will then review the plans and specifications and determine whether the project is feasible.
Once the loan has been approved, the lender will disburse the funds in stages, corresponding to a different phase of the development process. For example, the first disbursement may be used to purchase the land and pay for site preparation. In contrast, the second disbursement may pay for the foundation and framing.
Several factors may make it easier to obtain a this type of loan in compared to other states, including its substantial real estate market and a large number of specialized lenders. This can make it easier for developers to find lenders knowledgeable about the building development industry and can provide competitive loan terms.
It’s important to note that obtaining a building loan can still be a complex process requiring careful planning and preparation.
Florida has some of the most comprehensive lien laws in the country, which protect the rights of contractors, subcontractors, and suppliers to receive payment for their work. These laws provide a way for parties who have yet to be paid for their work to place a lien on the property and force the sale of the property to collect the debt. Other states may have different lien laws, with varying notice requirements, timing, and other factors.
Building codes in Florida are designed to protect structures from natural disasters such as hurricanes and earthquakes. They can be more stringent than those in other states. For example, Florida’s building codes require impact-resistant windows and doors, roof tie-downs, and other features that can withstand high winds and heavy rains. Additionally, Florida requires homes built in flood-prone areas to be elevated above the base flood elevation. The state also has specific laws that address construction defects, including a statute of repose that limits the time frame for a defect claim. Other states may have different regulations and time frames for managing building defects.
These are just a few examples of how Florida construction laws can differ from other states. Contractors and developers need to be aware of these differences and work with experienced professionals who can navigate the unique aspects of the states construction laws and regulations.
New Real Estate Developments
Several notable construction projects have been recently completed by well-known firms in Florida. One Thousand Museum, Miami: Designed by Zaha Hadid Architects, it is a luxury residential tower in downtown Miami with a unique exoskeleton structure. Completed in 2019, the 62-story building is one of the tallest in Miami. It offers panoramic views of the city and Biscayne Bay. Another project worth mentioning is JW Marriott’s 516-room luxury hotel near Orlando’s theme parks. The hotel features modern design elements and high-end amenities, including a rooftop terrace and multiple dining options. The project was completed by Turner Construction Company. Our last honorable mention is Daytona International Speedway. Completed in 2016, the Daytona International Speedway is a major motorsports complex that underwent a $400 million renovation. The project included the erection of new grandstands, improved fan amenities, and a new concourse. The project was completed by Barton Malow Company.
These are just a few examples of what is possible when you have the right plan and funding to push your project forward. As a result, the state’s thriving construction industry continues to attract significant development projects.
Best Cities to Live
Florida has several cities that offer great opportunities for new developments and high quality of life. For example, Tampa is one of the fastest-growing cities in Florida, with a strong job market and a diverse population. The city is also a central hub for the construction industry, with several new residential and commercial projects underway. Miami continues to be a hot attraction as it is a vibrant and cosmopolitan city with a high living standard and a booming real estate market. The city is known for its luxury developments and high-end amenities, making it an attractive location for new construction.
Orlando is another option, as it is a significant tourism and business hub with a strong economy and a growing population. This city also has several new real estate projects, including new residential and commercial developments.
Other cities to research include Jacksonville, Sarasota, and Fort Lauderdale. It’s important to note that the best city for new developments can vary depending on individual preferences, budget, and specific project requirements. So it’s always a good idea to do thorough research and speak to local professionals before deciding.
Applying for a Construction Loan in Florida
To apply for a construction, you will need to provide the lender with the following information:
- Detailed plans and specifications for the construction project
- A project budget
- A timeline for the building process
- Information about the builder or contractor who will be responsible for the development
- Proof of income and assets to demonstrate your ability to repay the loan
- A credit report and other financial information
Once you have gathered this information, you can shop for a lender offering construction loans in Florida. When comparing lenders, it’s essential to consider factors such as interest rates, repayment terms, and any fees associated with the loan.
Working with a financial advisor with experience with construction loans is also a good idea. This will help ensure that you clearly understand the process and are making an informed decision about your financing options.
Expectations During the Loan Process
When you obtain a construction loan here, you can expect the following:
- Higher interest rates and shorter repayment terms than traditional loans
Tier has been around since 2001 helping the public and private sectors receive the funding they need including:
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