Ground-Up Construction Loans in 2026: How Draw Schedules Work (and How to Get Funded in FL, TX, GA, and SC)

Building from the ground up is one of the most profitable strategies in real estate — and one of the most misunderstood when it comes to financing. If you’ve been turned down or are confused about how construction loans actually release money, this guide will walk you through exactly how draw schedules work, what lenders look for in the Southeast and Sun Belt states, and how to get your project funded faster.

Funding subject to lender approval. Terms vary by lender and project.

Ready to explore your options now? Apply in 2 minutes at slatefinancial.io/apply — no hard credit pull to get started.

What Is a Ground-Up Construction Loan?

A ground-up construction loan is a short-term financing product designed for projects where you are building a structure from scratch on bare land or a cleared lot. Unlike a fix-and-flip loan — which finances the purchase and rehab of an existing structure — a ground-up loan funds the entire build cycle: site prep, foundation, framing, mechanical systems, finishes, and certificate of occupancy.

These loans are typically structured as:

• 12 to 24 months in duration (some lenders extend to 36 for larger spec homes)
• Interest-only during construction with a balloon payment or refinance at completion
• Loan-to-cost (LTC) ratios of 70% to 85% depending on experience and location
• Draw-based disbursement — you do not receive the full loan up front

That last point is where most builders get tripped up. Understanding the draw schedule is the key to keeping your project on time and on budget.

How Construction Loan Draw Schedules Actually Work

A draw schedule is a pre-agreed timeline and checklist that dictates when your lender releases portions of the loan. Think of it as milestone-based funding: money flows to you only when verified work has been completed.

Typical Draw Milestones for a Spec Home Build

Most lenders use 4 to 6 draws over the life of the project. Here is a common structure for a single-family spec build in FL, TX, GA, or SC:

Each draw request typically requires:

• A draw request form signed by you (borrower)
• Lien waivers from the GC and major subs
• Third-party inspection confirming milestone completion (most lenders require this)
• Updated title search to confirm no new liens

Average time from draw request to funding: 3 to 7 business days. Plan your GC payment schedule around this — your contractor should not stop work waiting on your draw, which means having a small cash buffer at each stage is essential.

What Lenders Look for in FL, TX, GA, and SC

Ground-up construction lenders evaluate three things more than anything else: the borrower’s track record, the project’s after-construction value (ACV or ARV), and the exit strategy.

Florida

Florida lenders love coastal and suburban infill projects but flag anything in a flood zone without proper elevation certification. Spec builders in Tampa, Orlando, Jacksonville, and the Space Coast have seen strong comps through 2026. Lenders in FL typically want a minimum 6-month builder’s risk insurance policy and will request soil test results for anything near the coast.

Texas

Texas has some of the most builder-friendly lending terms in the country because of land availability and low regulatory friction. Lenders active in Dallas-Fort Worth, Austin, Houston, and San Antonio often accept first-time spec builders with a strong GC, a fixed-price construction contract, and solid comps. LTC ratios can reach 85% for experienced teams in TX.

Georgia

Atlanta metro and its suburbs (Gwinnett, Cherokee, Henry counties) are hot for spec construction through 2026. Savannah coastal builds require flood zone documentation. Georgia lenders respond well to borrowers who can show comparable sales within a one-mile radius — prioritize your comp package before the lender orders their own appraisal.

South Carolina

Charleston, Myrtle Beach, and Greenville see steady demand. SC lenders pay close attention to HOA restrictions on spec builds and will review plot plan approvals carefully. Wind and hail insurance requirements are strict for anything within 25 miles of the coast.

Who Qualifies for a Ground-Up Construction Loan?

Here is the honest picture. Qualification criteria vary by lender, but here are the ranges you will typically encounter when applying through a multi-lender broker like Slate Financial:

• Credit score: 620 minimum for most programs; 680+ unlocks better LTC and lower rates
• Experience: 1+ completed ground-up or major rehab project preferred; first-timers can qualify with a strong licensed GC and fixed-price contract
• Equity / down payment: 15–30% of total project cost, depending on experience and location
• Exit strategy: Lender wants to see either a pre-sale contract, active listing plan, or refi into a long-term DSCR loan

Income documentation requirements for construction loans are generally less rigid than conventional bank loans. Most private and hard money lenders underwrite primarily on the deal — the land value, project budget, and ACV — rather than your personal W-2s or tax returns.

Not sure where you stand? Start your application at slatefinancial.io/apply — our team reviews every submission and matches you with lenders whose criteria actually fit your project.

Construction-to-Perm: The Cleaner Exit

One option that experienced spec builders often overlook is the construction-to-permanent loan — sometimes called a “one-time close” or “OTC” loan. Instead of taking out a construction loan and then refinancing into a 30-year mortgage at completion, a C2P loan wraps both phases into a single closing.

Benefits:

• One set of closing costs instead of two
• Rate locked at the start of construction (important in a volatile rate environment)
• Simpler documentation and title chain

Drawbacks:

• Stricter qualification at origination (you need to qualify for the permanent loan now, not later)
• Less flexibility if you decide to sell before completion
• Not all lenders offer it — availability is narrower than straight construction loans

For a spec home you plan to sell quickly, a short-term construction loan with a clean presale or list strategy is usually the better move. For a build-to-rent play, C2P can save you 1–2% in duplicate closing costs.

Common Mistakes That Kill Ground-Up Construction Loan Deals

1. No Fixed-Price GC Contract

Open-ended cost-plus contracts are a red flag for lenders. Get a fixed-price contract with your general contractor before applying. It gives the lender confidence in the budget and protects you from cost overruns.

2. Underestimating the Draw Timeline

First-time builders consistently underestimate how long draw inspections take. Build 5–7 extra business days into every milestone phase on your project timeline. GCs who expect instant payment will slow down if they don’t understand how draw funding works.

3. Missing the Permits Before Closing

Some lenders want to see permitted plans before funding. Others will close and require permits before Draw 1. Know your lender’s requirement in advance — pulling permits takes 2–8 weeks in most Florida and Georgia jurisdictions.

4. Ignoring Contingency

Budget a 10–15% contingency line into your project cost. Lenders respect it. Borrowers who ignore contingency often hit Draw 4 with no money left and a half-finished house.

5. Applying to a Single Lender

Construction lending is relationship-driven. A lender who passed on your last deal because of their current book may be hungry for deals this month. Working with a multi-lender broker gives you access to 20+ active construction lenders with a single application — rather than cold-calling banks one by one.

How Slate Financial Can Help

Slate Financial is a multi-lender brokerage specializing in construction, fix-and-flip, DSCR, and working capital products. We work with private lenders, hard money shops, debt funds, and family offices — not just traditional banks — so we can find programs for projects that conventional lenders decline.

When you apply with us, we:

• Review your project summary and comp package within 24 hours
• Match you with lenders whose criteria fit your deal, not just the first lender who picks up
• Walk you through draw schedule expectations before you sign anything
• Coordinate with your GC and title company to keep closings on track

Most construction loans in our network close in 10 to 21 days from complete application to funding. Funding subject to lender approval.

Ready to fund your next ground-up deal? Apply in 2 minutes at slatefinancial.io/apply — no hard credit pull to get started. A member of our team will reach out within one business day.

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