Your lender funds the file you bring, not your pitch. On a ground-up deal, the biggest single item in that file is the permit. Whether it is issued, pending, or not filed yet can change how much money arrives at closing.
This post covers what to build before you apply. It also covers why the permit line moves your day-one check.
Why the permit moves your first check
A ground-up loan funds in two pieces. The initial advance at closing covers the land, or part of it. Construction money then comes out in draws as the work gets inspected.
Draws follow progress. The initial advance follows risk. An unpermitted lot is riskier. The appraiser is valuing a house the city has not approved yet. Plans can change, reviews can drag, and the timeline you underwrote can slip.
Some lenders price that risk straight into the land advance. CIVIC's ground-up program page, checked on 3 October 2026, offers up to 75% of the lower of land value or purchase price/60% if unpermitted, plus 100% of construction. The same page describes a catch-up draw to raise initial advance to 75% at approval of required plans/permits post-closing.
Run that on a lot to see the cash impact. Illustrative only:
| Lot price $200,000 | Permitted | Unpermitted |
|---|---|---|
| Land advance rate (CIVIC's published terms) | 75% | 60% |
| Land advance at closing | $150,000 | $120,000 |
| Extra cash you bring to closing | — | $30,000 |
Under that structure you can get the $30,000 back once permits issue. You still carry it until then, and that is cash you can't put into a deposit on the next lot.
Other lenders draw the line earlier. Park Place Finance's program page says that to finance the land, you must have the permits and plans prior to closing. LendSure Home Loans, in a requirements guide published in September 2026, says permits and plans must be ready or within approximately 25 days of final approval at closing. Some lenders are looser at the front end. One Delaware lender's FAQ says permits aren't required to begin the application, but approved plans and permit details will be reviewed before final approval.
The point: permit status is a pricing input. Tell your lender the true status on the first call, before you sign the land contract.
How we size a ground-up loan
At Funded Capital, ground-up leverage is measured against full cost: purchase price plus sunk costs plus the remaining construction budget.
- Standard: 85% of full cost.
- Builders with 20 or more completed ground-up builds: 90% of full cost.
- Interest reserve: a further 5% of cost on top of either. That finances the interest reserve only. It never buys construction dollars. An experienced builder reaches 95% all-in with the reserve financed.
- After-repair loan-to-value is a second cap. The lower of the two governs.
Illustrative only. Lot $200,000, sunk costs $30,000, remaining budget $570,000, for a full cost of $800,000:
| Standard | 20+ completed builds | |
|---|---|---|
| Leverage on full cost | 85% = $680,000 | 90% = $720,000 |
| Financed interest reserve (5%) | $40,000 | $40,000 |
| All-in | 90% = $720,000 | 95% = $760,000 |
The after-repair cap can cut either column. If you're new to the cost-versus-value split, read LTV vs LTC. For how the reserve band works, see the interest reserve guide. Run your own numbers in the calculator.
Notice the sunk costs line. Plans, engineering, surveys and permit fees you paid before closing count toward full cost. That only helps you if you can prove them, so keep every invoice and every proof of payment.
The permit clock runs both ways
Waiting too long hurts. Pulling the permit too early can hurt too.
Under the 2018 International Residential Code, section R105.5, every permit issued shall become invalid unless the work authorized by such permit is commenced within 180 days after its issuance. Local rules vary. Florida changed its rule this year. Creek Engineering reported in September 2026 that for single-family permits issued on or after July 1, 2026, the initial expiration date is generally one year from issuance, or the effective date of the next Florida Building Code edition if that comes later.
So line up the loan before the permit clock gets short. A lender won't want to close on a permit that is about to lapse.
The review side has deadlines too, at least in Florida. Construction Corps noted in August 2026 that HB 267 set a 30-business-day decision deadline for residential structures under 7,500 square feet. Becker, writing in July 2026, said HB 803 sets a 10-business day permit "shot clock" to review plans or issue permits when a private provider is used. Outside Florida, ask your building department for its current review time.
Nationally, the permit gap is real money. NAHB's Eye on Housing, published in September 2026, found that homes completed in 2025 took 1.4 months for authorization to start construction and another 7.4 months to finish construction. Every month of that you're carrying the lot.
The pre-construction file: what to have ready
Build this before you apply. Each line answers a question the underwriter will ask anyway.
| Item | What it proves |
|---|---|
| Purchase contract or deed, plus settlement statement | Basis and ownership |
| Survey and site plan | The house fits the lot and setbacks |
| Zoning confirmation | The use is allowed |
| Stamped architectural and structural plans | The appraiser and inspector value the same house |
| Issued permit, or application number with reviewer comments | Where the project sits on the city's clock |
| Line-item budget that matches the plans | Draws can be tied to real scope |
| GC contract, license and insurance | Someone qualified is building it |
| Sunk-cost invoices and proof of payment | What counts toward full cost |
| Construction schedule and draw schedule | Timing for the reserve and the term |
| Builder's risk quote | The asset is covered from day one |
| Completed-project schedule | Your experience tier |
| Exit plan with sales or rent comps | The after-repair value holds up |
Four links go deeper on the items that cause the most trouble. New construction loan requirements covers the full program checklist. Contractor vetting documents covers the GC packet. Builder's risk vs vacant dwelling covers insurance. How underwriters count completed deals covers the track record that decides your tier.
If the permit isn't issued yet
You can still apply. Make the file honest and complete.
- Send the application number and the latest reviewer comments. "Pending" with no paper reads like "not filed."
- Show the expected issue date and why you expect it. Statutory deadlines, private-provider review, or the department's posted times all help.
- Budget the cash gap. If the land advance comes in lower until permits issue, plan to carry that cash.
- Freeze the plans. If the drawings change after the appraisal, the value can change with them.
- Check the expiration rule. Know when work must start, and set closing well inside it.
Pricing the lot right helps every line above. See residual land value before you commit to the dirt.
The numbers
Ground-Up from 8.99%. Rates are ranges, not guarantees. Credit: most programs 660+, best tiers 680+, 640-659 case by case. We lend in 45 states, excluding VT, UT, OR, SD and ND. Closings run 5-10 business days, deal-dependent, and a complete file is the fastest way to stay inside that range. Terms are subject to underwriting, appraisal, title, and insurance.
Apply Now
Have the file? Send it. Not complete yet? Send what you have and we'll tell you what's missing.
Apply Now or call (305) 857-5620. Program details: new construction loans.
Terms are subject to underwriting, appraisal, title, and insurance.
Frequently Asked Questions
Do I need permits in hand before I apply for a ground-up loan?
Why does a permit change how much I get at closing?
How does Funded Capital size a ground-up loan?
Can a building permit expire before I start building?
What counts as a sunk cost on a ground-up deal?
Written by
Luis Fajardo
Senior Sales Director, Funded Capital · Lending to real estate investors nationwide — $500M+ funded across 1,200+ deals.