Some fix and flip lenders extend their programs to cover ground-up construction projects, but new construction financing is typically considered a distinct product with its own underwriting requirements and loan structures. Here is what you need to know.

Fix and Flip vs. New Construction

Fix and flip loans are designed for the acquisition and renovation of existing structures. New construction loans — also called ground-up construction loans — finance the demolition of an existing structure (or purchase of vacant land) and the construction of a new building from the foundation up.

Lenders That Bridge the Gap

Some private and hard money lenders offer a hybrid product that covers both scenarios — often called a “fix, flip, or build” loan. These are structured similarly to fix and flip loans (short-term, interest-only, draw-based disbursement) but underwritten on the ARV of the completed new construction rather than a renovated existing structure.

Key Differences for New Construction

• Longer loan terms — typically 18–24 months to account for the construction timeline
• More complex draw schedule tied to construction milestones
• Plans and permits typically required before funding
• Builder’s risk insurance required
• Inspections at each construction milestone (foundation, framing, rough-in, etc.)

California Permitting Considerations

In California, permitting timelines for new construction vary dramatically by city. Some Southern California jurisdictions process permits in weeks; others take 3–6 months or longer. Factor permitting time into your loan term when financing new construction.