Ground-Up Construction Loans: How Builders Fund New Builds Without a Bank in 2026

If you are a builder or real estate developer looking to fund a new construction project in Florida, Texas, Georgia, or South Carolina, you have probably run into the same wall: traditional banks are slow, rigid, and built for conforming mortgages – not spec homes and ground-up builds.

The good news is there is a better path. At Slate Financial, we work with private lenders and construction loan specialists who understand draw schedules, lot purchases, and the full construction-to-exit lifecycle. No 6-month bank approval process. No “come back when it’s built.”

What Is a Ground-Up Construction Loan?

A ground-up construction loan is a short-term financing product designed specifically for builders who are developing a property from raw land or a teardown. Unlike a traditional mortgage, the loan funds in stages called draw schedules – money is released as each phase of construction is completed and inspected.

Common use cases:

• Spec home builds (you build, then sell)
• Lot acquisition plus construction funding in one loan
• Tear-down and rebuild in high-demand neighborhoods
• Infill development in suburban growth markets

How Draw Schedule Financing Works

This is the part most bank loan officers gloss over. With a construction draw loan, you are not handed a lump sum on day one. Instead, the lender structures funding in tranches:

1. Initial draw – land purchase or closing costs
2. Foundation draw – after footings and slab are complete
3. Framing draw – after structure is up
4. Mechanical draw – after electrical, plumbing, HVAC rough-in
5. Finish draw – after drywall, fixtures, trim
6. Certificate of occupancy draw – final disbursement at CO

The benefit: you only pay interest on what you have drawn, not the full loan amount. This keeps your carry costs low during the build.

What Lenders Look for on Ground-Up Construction Deals

Private construction lenders evaluate deals differently than banks. Here is what actually matters:

• After-Construction Value (ACV) – What will the finished home appraise for? This drives the loan sizing.
• Loan to Cost (LTC) – Most private lenders fund 80-90% of total project cost (land + construction).
• Builder experience – First-time builders can still qualify, especially with a licensed GC and solid plans.
• Exit strategy – Are you selling (spec) or refinancing into a permanent mortgage? Both are acceptable; lenders just want to know the plan.
• Detailed construction budget – Line-item cost estimates from your GC are essential.

Markets We Work In

Our construction lending relationships are strongest in high-growth Sun Belt markets where new builds are in demand:

• Florida – Orlando suburbs, Tampa-St. Pete, Jacksonville, South Florida
• Texas – DFW, Austin, Houston, San Antonio
• Georgia – Atlanta metro, Savannah, Augusta
• South Carolina – Charleston, Greenville, Myrtle Beach

We also have lenders active in NC, TN, AZ, and select other states – reach out and we will check coverage for your market.

Rates and Terms You Should Expect

Construction loan rates in the private market vary based on borrower experience, LTC, and market, but here is a general range as of 2026:

• Interest rates: 9-13% (interest-only during construction phase)
• Points: 1-3 origination points
• Loan terms: 12-18 months (sufficient to build and exit)
• LTC: up to 90% depending on deal strength

Funding is subject to lender approval. These figures are representative and individual terms will vary.

The Slate Financial Difference

We are not a lender – we are a broker. That means we submit your deal to multiple construction lenders at once and let them compete for your business. You get options, not just one take-it-or-leave-it quote.

We have placed ground-up construction deals for spec builders, custom home contractors, and first-time developers. Our process is built around speed and transparency: submit your deal, we match you with the right lenders, you choose the best offer.

Apply for a ground-up construction loan here – takes about 5 minutes. Funding subject to lender approval.

Common Questions From Builders

Do I need to own the lot already?

Not always. Many lenders offer land-plus-construction loans that let you close on the lot and fund the build in one transaction. This simplifies the process significantly.

I am a first-time builder. Can I still qualify?

Yes, with the right deal structure. A licensed general contractor, detailed plans, and a solid comparable sale analysis (comps) for the finished home go a long way. Some lenders specialize in working with newer developers.

How long does it take to close?

Private construction loans typically close in 14-21 days once your project package is complete. Much faster than the 60-90 days a bank would need – and with no guarantee of approval at the end of that wait.

Ready to Build?

If you have a lot or are under contract on land, and you have a build plan, we want to see your deal. Submit your project at slatefinancial.io and we will get back to you within one business day.

Ground-up construction lending is what we do. Let us help you get the capital to build.

Funding subject to lender approval. Results not typical. This article is for informational purposes only and does not constitute a loan commitment or guarantee of financing.