Orlando New Construction Loans: 2026 Guide to Build & Buy Financing

Orlando New Construction Market Overview

Central Florida is one of the largest new home construction markets in the United States. Orlando metro alone permits 25,000+ new homes per year, with active master-planned communities in:

• Lake Nona area: Laureate Park, Storey Park, Eagle Creek, Watermark
• Disney area: Solterra, Storey Lake, Windsor at Westside, Champions Gate
• Lake County: Mount Plymouth, Clermont (Sawgrass Bay), Tavares
• Seminole County: Lake Forest (Lake Mary), Sanford expansion
• Orange County: Apopka growth corridor, Horizon West, Avalon Park, Hamlin
• Osceola County: Tapestry, Trinity Place, Center Lake Ranch

Major Builders Active in Orlando

National builders dominate Central Florida:

• Lennar — most volume in the metro
• Pulte / Centex — strong in Lake Nona, master-planned
• DR Horton — entry-level and mid-range
• KB Home — entry-level and mid-range
• Toll Brothers — luxury and semi-custom
• Mattamy Homes — Canadian builder, mid-to-luxury range
• Taylor Morrison — mid-range, active in Disney area
• MI Homes — mid-to-upper range
• Meritage Homes — energy-efficient focus
• Beazer, Highland Homes, Dream Finders — also active

Plus dozens of regional and custom builders for higher-end and Lake Nona / Windermere custom estates.

Pricing Tiers

• Entry-level new construction: $300,000-$450,000 (KB, DR Horton, Lennar starter products)
• Mid-range: $450,000-$750,000 (Lennar, Pulte, Mattamy mid-tier)
• Upper-mid: $750,000-$1,500,000 (Toll Brothers, MI Homes premium)
• Luxury / custom: $1,500,000-$5,000,000+ (custom builders, Watermark, Windermere)

New Construction Loan Types

Three main loan structures for Orlando new construction:

1. Construction-to-Permanent (Single-Close)

One application, one closing, one set of fees. Construction phase converts automatically to permanent mortgage at completion. Most efficient structure for buyers building or buying inventory homes.

• Available conventional and jumbo
• Down payment 10-20% conventional, 20-25% jumbo
• Interest-only payments during construction phase
• Permanent loan terms set at closing (rate locked at start)

2. Two-Time-Close Construction

Separate construction loan and permanent mortgage. Construction loan handles the build phase; you close on permanent financing once construction is complete.

• Allows shopping permanent mortgage at end of build
• Two sets of closing costs
• Risk of rates moving against you between builds
• Less common for buyer-driven new construction; more common for spec builders

3. End Loan (Builder Construction)

Builder uses their own construction financing. You get a permanent mortgage at completion. Most common for inventory homes (already built or nearly complete) and tract developers.

• Standard mortgage at closing time
• You don't carry construction risk
• Limited control over the build process
• Typically simpler underwriting

Which Structure Fits Your Situation

• Buying inventory home from a major builder → End Loan
• Building a custom home or semi-custom on land you own → Construction-to-Permanent
• Custom luxury build with detailed specifications → Construction-to-Permanent or Two-Time-Close
• Buying a "to-be-built" home from a builder with their construction financing → End Loan

Construction-to-Permanent Loans (Detailed)

The most common structure for buyer-initiated builds in Orlando.

How It Works

1. Application + approval — same documentation as standard mortgage plus construction documents (plans, contractor agreement, budget).
2. Closing. Construction phase begins; loan funds released in stages (draws) as construction progresses.
3. Construction phase — typically 6-12 months for production builders, longer for custom. Interest-only payments on outstanding balance.
4. Conversion at completion — final inspection, certificate of occupancy issued, loan converts to permanent mortgage. No second closing needed.

Draw Schedule

Construction loans release funds in stages tied to build milestones:

• Foundation poured
• Framing complete
• Drywall installation
• Mechanical/electrical/plumbing (MEP) systems
• Trim and finish work
• Final completion / certificate of occupancy

Each draw requires inspection by lender-approved inspector. Builder gets paid for completed work; lender holds back retainage to ensure completion.

Interest During Construction

Interest-only payments on the outstanding balance (not the full loan amount). Early in construction, payments are minimal because little has been drawn. As construction progresses, payments grow.

Down Payment

• Conventional construction-to-perm: 10-20% down typical (some 5% programs exist)
• Jumbo construction-to-perm: 20-25% down typical, 30%+ for ultra-jumbo
• VA construction-to-perm: 0% down for eligible veterans (rare program but available)
• FHA construction-to-perm: 3.5% down (203(k) renovation/construction product)

The Builder-Preferred Lender Trap

Every major Orlando builder pushes their "preferred lender" hard. Closing cost incentives, builder concessions, marketing pressure, sometimes outright requirements that you "at least apply" with their lender. Here's what's really happening.

The Pitch

• "$10,000 toward closing costs if you use our preferred lender"
• "$5,000 builder concession when financed through us"
• "Faster process, we work together every day"
• "Special pricing for our buyers"

The Reality

Builder-preferred lenders typically have HIGHER rates than wholesale brokers. The "incentive" is often less than what you'd save with a competing lender:

Worked Example

$500,000 conventional 30-year fixed, 20% down ($400,000 loan):

• Builder-preferred lender: 7.125% rate + $10,000 closing cost incentive. Monthly P&I: $2,694. Effective cost over 5 years: $161,640 - $10,000 = $151,640
• Independent wholesale broker: 6.750% rate + $0 incentive. Monthly P&I: $2,594. Effective cost over 5 years: $155,640 - $0 = $155,640

Wait — builder lender wins by $4K? Look closer:

• Builder lender total cost over 30 years: $969,840 - $10,000 = $959,840
• Independent broker total cost over 30 years: $933,840 - $0 = $933,840

Independent wins by $26,000 over the full term. The closing cost incentive is essentially a marketing trick to make a higher rate look attractive.

How to Play This

• Always get an independent quote. Compare full life-of-loan cost, not just the upfront incentive.
• Some builders allow incentive transfer. Negotiate to keep the closing cost concession even when financing elsewhere. Sometimes the builder agrees, sometimes not.
• Know the math. A 0.375% rate difference on $400,000 over 30 years is $26,000+. The incentive needs to exceed this to be the better deal.
• Speed claims rarely hold up. Wholesale brokers typically close at the same speed or faster than builder-preferred lenders.

Rate Locks for Long Construction Timelines

New construction creates a unique rate lock challenge. A 6-12 month build is much longer than the standard 30-60 day mortgage rate lock window.

Extended Lock Programs

Construction-to-permanent loans typically include extended lock options:

• 180-day lock: Common for production builders
• 270-day lock: For larger builds or semi-custom
• 360-day lock: Custom or large-scale projects
• "Lock and shop" programs: Lock when you sign with the builder, before construction begins

Extended locks cost more — typically 0.25-0.5% rate premium for 180-day, more for 270+ day.

Float-Down Options

Many extended-lock construction programs include float-down options. If rates drop significantly during your construction period, you can re-lock at the lower rate (often with a fee or slight rate premium for the float-down option itself).

Rate Lock Strategy for Construction

• If rates seem high and likely to fall: shorter lock or float-down option
• If rates seem low or likely to rise: longest possible lock to protect
• If uncertain: 180-270 day lock with float-down typically the safest

What If Construction Runs Late?

Builds often run 1-3 months past target. Lock extension fees apply if your lock expires before completion. Build buffer time into your lock selection.

Inspection & Walkthrough Tips

New construction can have hidden quality issues. Independent inspections catch them before closing.

Pre-Drywall Inspection

Conducted around month 2-3 of construction (after framing, before drywall). Critical because everything inside walls becomes invisible after this point.

Inspector checks:

• Framing quality and structural soundness
• Plumbing layout and connections
• Electrical wiring placement
• HVAC ducting
• Window and door framing
• Foundation drainage and waterproofing

Cost: $400-$700. Worth every dollar.

Final Walkthrough Inspection

Conducted within 7-10 days before closing. Use an INDEPENDENT inspector, not the builder's.

Inspector checks:

• All systems functional (HVAC, plumbing, electrical)
• Cosmetic issues (paint, drywall, trim)
• Appliance installations
• Landscape and exterior completion
• Driveway and walkway grading
• Roof and exterior weatherproofing

Document EVERYTHING in writing. Builder warranties typically don't cover items not noted at walkthrough.

Common Florida New Construction Issues

• HVAC undersized for Florida heat — builders sometimes go smaller to save cost
• Insufficient insulation — particularly attic R-value
• Stucco quality — Florida-specific concern, can hide major issues
• Drainage and grading — poor grading causes flooding
• Driveway shortcuts — thin concrete that cracks
• Landscape stipulations — confirm what builder is providing vs. what you need to add

Builder Warranties

Florida new construction typically comes with:

• 1-year workmanship warranty
• 2-year systems warranty (HVAC, plumbing, electrical)
• 10-year structural warranty (foundation, load-bearing)

Document any pre-existing issues at walkthrough so they're covered, not denied as "owner-caused."

The New Construction Loan Process

1. Initial conversation. Builder selected, lot identified, plans determined. Discuss financing options.
2. Pre-approval. Standard documentation plus builder agreement and construction plans/budget.
3. Loan application. Submit full application. Loan Estimate within 3 business days.
4. Rate lock decision. Choose lock period based on construction timeline + buffer.
5. Appraisal. "As-built" appraisal of plans/specs. 7-14 days.
6. Underwriting. 10-20 business days. Construction documents reviewed alongside borrower documents.
7. Closing. Construction begins. Loan funds release in draws as construction progresses.
8. Pre-drywall inspection (around month 2-3). Independent inspection.
9. Continued construction with periodic draws.
10. Final walkthrough (7-10 days before completion). Independent inspection.
11. Certificate of occupancy issued. Loan converts to permanent mortgage automatically (single-close) or you close on end loan (separate-close).
12. Move in.

Total Orlando new construction timeline: 6-12 months for production builders, 12-24+ months for custom. Loan approval and closing happen at the start; no second loan closing for single-close construction-to-perm.