Why Is Jacksonville One of Florida's Hottest Markets for Ground-Up Construction?
Jacksonville has cemented its status as one of the most active construction markets in the Southeast. The city officially surpassed 1 million residents in 2024, making it one of the top 15 fastest-growing metros in the United States. With an $8.8 billion downtown development pipeline, a deepwater port expansion driving industrial demand, and master-planned communities absorbing thousands of new residents each year, Jacksonville offers developers a rare combination of population growth, infrastructure investment, and available land.
The numbers tell a compelling story. Duval County issued 12,551 building permits in 2024, a 6.17% increase over 2023. Multifamily absorption hit nearly 7,000 units in 2024, with the second quarter alone setting a decade-high record of 2,500 units absorbed. Yet construction starts have dropped by more than 60% over the past year, signaling that the supply pipeline is thinning and new development opportunities are opening up for well-capitalized builders.
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Whether you are planning a ground-up multifamily project on the Southbank, a spec industrial warehouse at Cecil Commerce Center, or a single-family subdivision in Nocatee, understanding your construction financing options is the first step toward breaking ground. This guide covers current construction loan rates in Jacksonville, the types of financing available, development hot spots across the metro, and practical steps to secure funding for your next project.
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What Types of Construction Loans Are Available in Jacksonville?
Jacksonville's development landscape spans everything from luxury high-rises downtown to industrial distribution centers on the Westside. Each project type calls for a different financing structure, and matching the right loan to your development plan is critical for controlling costs and staying on schedule.
Ground-Up Construction Loans
Ground-up construction loans fund the entire build process, from site preparation through certificate of occupancy. These loans are structured as short-term facilities (typically 12 to 36 months) with interest-only payments during the construction phase. Funds are disbursed in draws as the project hits predetermined milestones, and a third-party inspector verifies progress before each disbursement.
For Jacksonville developers, ground-up loans typically cover 75% to 80% of total project costs, with interest rates ranging from 7% to 12% depending on the borrower's experience, the project scope, and market conditions. Learn more about vertical construction financing for multistory projects or horizontal construction loans for land development and infrastructure work.
Construction-to-Permanent Loans
A construction-to-permanent (C2P) loan combines the construction phase and long-term financing into a single closing, saving borrowers the cost and hassle of refinancing once the building is complete. The loan converts from an interest-only construction facility to a fully amortizing permanent mortgage upon project completion.
This structure works particularly well for owner-occupied commercial properties in Jacksonville, such as medical offices, retail buildings, or professional office space. Borrowers lock in their permanent rate at closing, providing certainty even if rates move during the 12- to 18-month build period.
SBA Construction Loans
Small business owners building or renovating owner-occupied commercial space in Jacksonville can access SBA 504 construction financing with as little as 10% down. The SBA 504 program pairs a conventional first mortgage (50%) with an SBA-backed second mortgage (40%) at a fixed rate for up to 25 years. This structure significantly reduces the cash equity required and provides long-term rate certainty.
Jacksonville businesses in growth corridors like Town Center, the Southside, and the Westside frequently use SBA construction loans for new facilities, warehouse expansions, and medical office builds.
Bridge-to-Construction Loans
Sometimes a developer needs to acquire a site quickly before construction financing is in place. A bridge loan can fund the land acquisition and predevelopment costs, then roll into a full construction facility once plans are approved and permits are secured. This strategy is common in competitive Jacksonville submarkets like Downtown and San Marco, where desirable parcels move fast.
What Are Current Construction Loan Rates in Jacksonville?
Construction loan rates in Jacksonville reflect both national interest rate trends and local market conditions. As of early 2026, most construction loans are pricing between 7% and 12%, with the specific rate depending on the loan type, borrower profile, project risk, and leverage.
Several factors influence where your rate lands within this range:
- Borrower experience: Developers with a track record of completed projects in Jacksonville typically qualify for lower rates. First-time developers may pay 1% to 2% more or need to bring in an experienced partner.
- Loan-to-cost ratio: Lower leverage means lower risk for the lender. Projects with 25% to 30% borrower equity generally receive the most competitive pricing.
- Project type: Multifamily and industrial projects in strong submarkets tend to price better than speculative office or hospitality developments.
- Pre-leasing or pre-sales: Projects with signed leases or purchase contracts before construction begins reduce lender risk and can unlock better terms.
- Exit strategy: Lenders want to see a clear path to repayment, whether through a permanent loan takeout, property sale, or refinance. A strong exit strategy can compress your rate by 50 to 100 basis points.
The Federal Funds Rate currently sits between 4.25% and 4.50%, with projections suggesting a potential decrease to around 3.9% by late 2025. If rates decline as expected, construction loan pricing should follow, making 2026 a potentially favorable window for locking in development financing.
Where Are the Hottest Construction and Development Zones in Jacksonville?
Jacksonville is the largest city by land area in the contiguous United States, spanning more than 840 square miles. That geographic spread creates distinct development zones, each with unique opportunities and financing considerations.
Downtown and Northbank Revitalization
Downtown Jacksonville is in the midst of a historic transformation, with close to $3 billion in active investment reshaping the urban core. The $321 million Four Seasons Hotel and Residences is rising on the Northbank with a 2026 completion target. The $419 million Pearl Street District (Pearl Square) is under vertical construction across five blocks in the NorthCore area. The $1.4 billion Jaguars stadium renovation will reshape the sports and entertainment district through 2028.
Riverfront Plaza, a $78.5 million public park on the former Jacksonville Landing site, is nearing completion on its first phase, with the second phase beginning by late 2025. The University of Florida has also selected the LaVilla neighborhood for its new graduate campus. For construction lenders, Downtown represents the highest-profile development opportunity in Northeast Florida, though projects here typically require experienced sponsors and strong capitalization.
Southbank and The District
The Southbank continues to attract major mixed-use development. The $693 million RiversEdge project, developed by Toll Brothers, includes townhomes, apartments, riverwalk improvements, and more than 4 acres of public parks. The $96.9 million Artea multifamily community adds studio, one-bedroom, and two-bedroom units along with a 425-space parking garage. St. Johns River Park, adjacent to the revamped Friendship Fountain, is expected to complete in spring 2026.
Southbank's combination of waterfront access, proximity to downtown employment, and improving walkability makes it one of Jacksonville's most bankable development locations for construction lenders.
Town Center and Southside
St. Johns Town Center remains the commercial epicenter of Jacksonville's Southside, generating strong retail and mixed-use development. Kimco Realty acquired The Markets at Town Center for $110 million in early 2025, and Ashco Centers is building Town Center II with new retail space opening in 2026. The broader Southside corridor absorbed approximately 60% of the metro's total multifamily absorption over the past year, making it a prime target for apartment developers.
Construction costs in this corridor run $140 to $200 per square foot for commercial projects, with strong pre-leasing fundamentals that support favorable financing terms.
Cecil Commerce Center and Westside Growth Corridor
Cecil Commerce Center, located on the former Naval Air Station Cecil Field, represents one of the largest industrial development sites in the Southeast. The 17,000-acre property (more than 3% of Duval County's total land area) is being developed under a 25-year master plan by Hillwood, which committed to investing $1.3 billion across a 31-million-square-foot buildout.
Recent activity includes a 603,529-square-foot spec warehouse that launched vertical construction in early 2025, with completion targeted for September 2025. Hillwood is also tracking a 1.5-million-square-foot automated distribution project. Major tenants already on-site include Amazon and Wayfair, each occupying 1-million-square-foot facilities. For industrial developers, Cecil Commerce Center offers shovel-ready sites with direct airport access and proximity to JAXPORT.
Nocatee, World Golf Village, and St. Johns County
Nocatee consistently ranks among the top-selling master-planned communities in the United States, and the surrounding St. Johns County corridor continues to attract residential and commercial construction. Thompson Thrift began construction on Velara, a 312-unit multifamily community in Nocatee, with first residents expected in summer 2026.
The PARC Group, the master developer behind Nocatee and eTown, has also launched EverRange, a new 1,000-acre master-planned community that will include more than 1,500 homes. Construction on the first neighborhoods is expected to begin in late 2025, with openings in 2026. For residential builders and subdivision developers, the St. Johns County corridor offers strong buyer demand and reliable horizontal construction financing opportunities.
What Does It Cost to Build in Jacksonville?
Construction costs in Jacksonville remain lower than many Florida markets, though rising material prices and labor shortages continue to push costs upward. Understanding per-square-foot costs is essential for accurately projecting total development budgets and securing appropriate financing.
Jacksonville's coastal location adds $5 to $13 per square foot for hurricane code compliance, including impact-resistant windows, reinforced roof connections, and enhanced structural requirements. These costs should be factored into every construction budget and loan application.
Tariff pressures have also affected material costs. Tariffs on Chinese imports have increased prices by 25% to 50% on materials such as lumber, metals, wire, and finished products like cabinets and vanities. Developers should build contingency reserves of 5% to 10% into their construction budgets to account for material price volatility.
How Does the Construction Loan Draw Process Work?
Unlike a traditional mortgage where the full loan amount is disbursed at closing, construction loans release funds in a series of draws as the project progresses. This draw schedule protects the lender by ensuring that funds are only released as value is added to the property.
Most Jacksonville lenders require 24 to 48 hours of advance notice for draw requests, and the inspection and approval process typically takes 3 to 5 business days. Delays in the draw process can slow construction timelines, so working with a lender experienced in Jacksonville's permitting and inspection processes is important.
As of mid-2025, the City of Jacksonville's Building Inspection Division reports an average first review turnaround of 25 to 30 business days for building permits. Factoring this timeline into your predevelopment schedule can help avoid costly delays between land closing and construction start.
What Documentation Do Lenders Require for Jacksonville Construction Loans?
Construction loan underwriting is more complex than permanent financing because the lender is evaluating a project that does not yet exist. Jacksonville lenders will scrutinize every aspect of your development plan before committing capital.
Borrower experience carries significant weight in construction loan approvals. Developers with two or more completed projects similar in scope and size to the proposed development will find the widest range of lender options and the most competitive pricing. First-time developers may need to bring in an experienced general contractor, development partner, or construction manager to strengthen the application.
How Is Jacksonville's Construction Market Expected to Perform in 2026?
Jacksonville's construction market is entering a recalibration phase that creates strategic opportunities for well-timed developers. After experiencing one of the largest construction waves in the city's history, the pace of new starts has slowed considerably, with multifamily construction starts dropping 61% year-over-year and residential permitting declining nearly 30%.
This supply slowdown is actually positive for developers who break ground in 2026. With fewer competing projects entering the pipeline, new construction will face less lease-up competition and potentially stronger rent growth. The narrowing supply-demand gap is already supporting higher occupancy rates, with stabilized multifamily properties reaching 93.2% occupancy by mid-2025.
For developers and their lenders, the key metrics to watch include:
- Population inflows: Jacksonville ranks 9th nationally among cities where people are relocating, with significant migration from Miami, New York, and Washington, D.C.
- Job growth: Named the second-strongest job market in the nation by the Wall Street Journal and Moody's Analytics
- Absorption trends: Multifamily absorption hit 6,980 units in 2024, with sustained demand expected through 2026
- Rate environment: Potential Fed rate cuts could reduce construction loan pricing by 50 to 100 basis points
For a detailed look at all commercial lending options in Jacksonville, see our comprehensive market guide.
Frequently Asked Questions About Construction Loans in Jacksonville
What is the minimum down payment for a construction loan in Jacksonville?
Most construction lenders in Jacksonville require 20% to 30% of total project costs as borrower equity. SBA construction loans offer the lowest entry point at 10% down for owner-occupied commercial properties. The equity requirement depends on the project type, borrower experience, and whether the land is contributed as part of the equity stack. Land already owned free and clear can often count toward the equity requirement.
How long does it take to close a construction loan in Jacksonville?
Construction loans typically take 30 to 60 days to close, though the timeline can stretch longer for complex projects requiring environmental reviews, zoning approvals, or phased development agreements. Having complete documentation ready at application, including architectural plans, a detailed budget, a construction timeline, and contractor bids, can significantly accelerate the process.
Can I use a construction loan for both residential and commercial projects?
Yes. Construction loans in Jacksonville are available for single-family spec homes, multifamily apartment buildings, mixed-use developments, industrial warehouses, retail centers, medical facilities, and hospitality projects. The loan terms, rate, and structure will vary based on the property type and intended use. Residential construction loans for spec homes typically carry 12- to 18-month terms, while larger commercial projects may have 24- to 36-month construction periods.
What happens if my construction project goes over budget in Jacksonville?
Cost overruns are one of the biggest risks in construction lending. Most lenders require a contingency reserve of 5% to 10% built into the original loan budget. If costs exceed the contingency, the borrower is typically responsible for funding the difference out of pocket. Some lenders will consider a loan modification or increase if the overrun is due to documented, unavoidable circumstances (such as material price spikes or code requirement changes), but this is not guaranteed.
Do I need to own the land before applying for a construction loan?
Not necessarily. Some construction lenders in Jacksonville will include the land acquisition as part of the construction loan, particularly if the land purchase and construction start are happening on a similar timeline. Alternatively, you can use a bridge loan to acquire the land first, then roll the cost into a construction facility once plans and permits are finalized. Land equity is a significant factor in construction loan underwriting; owning the land outright strengthens your application considerably.
What construction loan terms are available for industrial projects at Cecil Commerce Center?
Industrial construction at Cecil Commerce Center and Jacksonville's Westside typically qualifies for construction loans with 18- to 24-month terms, 75% to 80% loan-to-cost ratios, and rates between 7% and 10%. Given the strong tenant demand from logistics and distribution companies (Amazon, Wayfair, and others are already on-site), lenders view spec industrial construction in this corridor favorably. Projects with pre-leasing commitments can often secure better terms and higher leverage.