06-reference/research

construction to permanent loans florida

2026-08-14·research-brief·source: deep-research·by Ray Data Co (deep-research synthesis)·! medium

Construction-to-Permanent Financing for the Sunset Park Rebuild: Mechanism, Jumbo Threshold, and Florida Lender Options

The question

Verbatim: "How do construction-to-permanent loans work for a custom new build at $1.5-1.8M all-in, for a household with $315k gross income, ~$150k liquid capital, and no existing mortgage — and what are the current Florida market rates and lender options?"

Context: this is the general-mechanics-and-rates half of home-rebuild-2027 Critical Open Question #4. The flood-zone-specific half was already answered on 2026-08-04 and is deliberately not restated here.

⚠️ TWO PREMISES IN THE QUESTION ARE WRONG. Corrected before any math was run.

1. Liquid capital is not ~$150k — it is ~$777.5k deployable. The live Monarch pull of 2026-08-01 shows cash $290,150 + taxable brokerage $487,381 = $777,531 deployable without penalty, plus $179,155 locked retirement and $36,998 spendable Mercury business cash. [[2026-08-01-capital-deployment-brainstorm]] Likely provenance of the $150k: the project README's parents'-home down-payment gift line item ("Founder gifts ~$150k"), which is Project B, not the founder's liquid position. [[readme]] All analysis below uses $777,531, and I flag where the answer would change under the $150k reading (it changes completely: at $150k liquid this project is not financeable at all).

2. There IS an existing mortgage. $415,622 outstanding on 1212 S Suffolk Dr as of the same 2026-08-01 pull, against a $1,047,100 Zillow estimate — roughly $631k equity. [[2026-08-01-capital-deployment-brainstorm]] This is load-bearing: the construction lender needs first lien on the same parcel, so that balance gets paid off out of loan proceeds or out of cash before a dollar of construction is funded.

The $315k combined gross ($190k phData base + $125k wife W-2) is correct per [[readme]].

What we already know (from the vault)

What the web says

Convergences and contradictions

Synthesis for RDCO

The mechanism, concretely, for this specific parcel. A single-close construction-to-permanent loan on 1212 S Suffolk Dr is one note, closed once, that funds in stages and then modifies into a 30-year mortgage without a second closing. At the initial closing the lender takes first lien on the land, which means the existing $415,622 mortgage is retired out of loan proceeds — that is the first "draw" in economic terms even though no construction has happened. The already-owned land counts as the equity contribution: with an as-is land value plausibly in the high six figures and total cost basis (land + ~$1.6M construction) around $2.4-2.6M against a ~$2.5M appraised-on-completion value, the loan-to-cost and loan-to-value tests are trivially satisfied. During construction he pays interest-only on the drawn balance, which ramps from near-zero to the full note rate as draws release — Goldwater runs two draws monthly, most programs run 4-6 phase draws, each gated on an independent inspection, with the stem-wall draw being the one where the design-stage elevation certificate has to land per the 8/04 brief. Some programs capitalize an interest reserve into the loan so the borrower writes no check during construction; the jumbo OTC program I looked at does the opposite and makes the borrower pay. Conversion triggers on completion — Certificate of Occupancy, final inspection and final draw, as-built EC, clear lien waivers under Florida's construction-lien regime — and on a single-close that conversion is a modification, not a refinance: no new note, no new title policy, and on some programs a re-verification of employment. The rate, however, is set at the initial closing, 12-18 months before he moves in. Float-down availability is program-specific and unverified here; it is the single most valuable term to ask each lender about, because on a $1.2M note a 75bp float-down is roughly $600/mo for thirty years.

Sizing, and why the answer is uncomfortable. Run it as sources and uses. Sources: $777,531 deployable liquid, plus the README's projected $150-200k of additional savings by Q1 2027, plus a permanent loan the vault's own DTI work caps near $1.0-1.2M. Uses: $415,622 mortgage payoff, $1.5-1.8M construction, and temp housing that the 7/13 repricing puts at **$8k/mo × 12-15 months ≈ $96-120k**, not the README's $40-50k. Take the favorable end — $1.5M construction, $1.1M perm loan, $175k of new savings — and sources are ~$2.05M against uses of ~$2.03M. It closes, with essentially zero margin and no reserve left standing, which directly violates the README's own "maintain 6-month expense reserve OUTSIDE the project budget" mitigation. Take the $1.8M end and it is short by roughly $400k. And the DTI ceiling itself is probably generous: $1.1M at 7% is $7,318/mo P&I before taxes and insurance, and this is a Zone AE parcel on a ~$2.5M finished basis in the post-Helene Florida insurance market — the escrow line is not a rounding error, and I did not price it here (see [[2026-07-22-florida-ae-zone-insurance-repricing-tampa]]). Layer on that jumbo construction lenders typically want months of post-closing PITI reserves, and TD's posted requirement to hold 10% of construction costs in reserve — $160k on a $1.6M build — and the tightness gets worse, not better. Under the question's erroneous $150k-liquid premise, none of this is financeable and the correct answer would have been "don't." Under the true $777.5k it is financeable at the bottom of the budget band and not at the top.

Which product class, and what to actually ask. GSE single-close is out on size alone, so the fork is between a balance-sheet portfolio lender (Seacoast's local underwriting is the archetype — a Tampa-decisioned bank can look at a nonconforming 68-ft lot and a 7-month W-2 with judgment rather than an overlay matrix) and a national jumbo OTC program (BuildBuyRefi-style, $4.5M ceiling, 18-month interest-only, mechanically clean but rule-bound). Goldwater's $1.5M portfolio cap is uncomfortably close to the likely loan; TD's $3M-at-30%-down tier is the one mainstream product on this list with real headroom, and 30% down is not a problem for him. A third category the vault has never considered and that fits his balance sheet unusually well: private-client / pledged-asset structures, where $487k of taxable brokerage is pledged rather than liquidated, avoiding the capital-gains hit of selling to raise cash down. I could not source a specific Florida institution's private-client construction program in this run, so that stays a category to investigate, not a recommendation. Two structural points that should shape the conversation regardless of lender: single-close is probably right for him specifically, not for the closing-cost savings but because two-close means being fully re-underwritten in late 2028 on variable comp the vault already flags as an underwriting risk — one underwrite at 7-9 months of phData W-2 history is a smaller exposure than two. And the loan is not the lever that makes an $1.8M build work; income is. The honest options for closing the gap are a smaller build, more cash, higher qualifying income, or waiting — not a cleverer loan product.

Why this is in the vault

Answers the sizing-and-product-class half of home-rebuild-2027 Critical Open Question #4 ("construction-to-perm vs separate construction loan"), the half [[2026-08-04-flood-zone-ae-construction-loan-requirements]] explicitly scoped out, and corrects two wrong premises ($150k liquid, no mortgage) that were about to propagate into the Q1 2027 go/no-go gate and the still-idle mortgage-broker consult.

Open follow-ups

Related

Sources

Research caps: 3 QMD queries, 3 WebSearch, 4 WebFetch — one over the 3-fetch cap, because the FHFA fetch returned no usable figure and a substitute was needed.

Vault:

Web (fetched and read in this run):

Web (search-summary only, NOT fetched — lower confidence):

Unverified in this run and explicitly not treated as fact: as-is land value for 1212 S Suffolk Dr; the property-tax and insurance escrow line on a ~$2.5M finished-value Zone AE home; Florida retainage and lien-waiver draw practice (stated as general practice, not sourced); post-closing reserve requirements on jumbo construction loans beyond TD's posted 10%-of-construction-cost figure.