Building on acreage in Hastings is exciting. It also works differently than buying a move‑in‑ready home. The land itself, utilities, permits, and the construction loan all play into your budget and timeline. Use this guide to choose a financing path, map your costs, and move from dirt to done with fewer surprises.
Why acreage build financing differs
Financing a custom home on acreage is more complex than a typical purchase. Lenders fund construction in stages, tie money to inspections, and want proof that your site can support a home. In St. Johns County, permits, septic or utility approvals, stormwater rules, and flood zone checks add steps that standard home loans never touch. The payoff is control over your design and room to spread out, but you need a clear plan upfront.
Choose your acreage financing path
Construction-to-permanent loans
A single closing funds construction and then converts to a long-term mortgage when the home is finished. You lock terms up front and avoid re-qualifying later. During the build, the lender releases money in draws after inspections. Programs include conventional one-time close options and government-backed versions. An FHA one-time close can allow as little as 3.5 percent down for eligible borrowers, and lenders must follow FHA rules for the product see FHA one-time close overview. VA also supports construction options for eligible veterans, though lender participation varies per VA guidance. Availability is lender specific, and investor rules set limits on construction timelines and appraisal validity per Fannie Mae construction products and single-closing guidance.
Who it fits: Buyers who want one closing, rate certainty, and a streamlined handoff to permanent financing.
What to weigh: Fewer lenders offer one-time close, timelines are capped, and builder approval is strict.
Land or lot loan then construction and end loan
This is a two-close approach. You buy the acreage first, then secure a construction loan, then refinance into a standard mortgage at the end. Many local banks and credit unions offer this structure. Construction loans are short term, often interest-only during the build, with draws tied to milestones per CFPB overview of construction loans and typical construction-loan mechanics.
Who it fits: Buyers who want to lock in the right parcel now, or who plan to assemble plans and permits before breaking ground.
What to weigh: Multiple closings, potentially higher down payment expectations, and re-qualification at the end.
Builder financing or package deals
Some builders line up preferred lenders or package construction-to-permanent financing with their contract. This can simplify draws and inspections and may include rate or fee incentives. You still own the loan and will be underwritten based on your credit, income, and the project scope. Compare any package against independent lender quotes.
Who it fits: Buyers working with a turnkey builder that routinely builds in St. Johns County and can deliver fixed pricing and a predictable schedule.
What to weigh: Less flexibility to shop rates or terms, and you still must meet county permit requirements before draws.
Alternatives to traditional loans
- Cash or large reserves for part of the build, then a refinance at completion.
- HELOC or cash-out from an existing property to cover land or early site work.
- USDA single-close options in eligible rural areas if your Hastings parcel qualifies see USDA Single Family Housing programs. Availability is lender dependent.
Build a realistic budget and cash plan
Land, site work, and soft costs
On acreage, site work can be the wild card. Plan for:
- Land purchase price, survey, and title
- Clearing, grading, and driveway or culvert work
- Septic and well or water and sewer connections, depending on service area
- Impact fees, connection fees, and stormwater permits where applicable in St. Johns County review utility development and fees and stormwater forms and fees
- Architectural plans, engineering, and permits see St. Johns County permitting
If your parcel sits inside the St. Johns County Utility Department service area, your budget will include unit connection fees and design standards. If not, plan for well and onsite septic permitting through Environmental Health county environmental health programs.
Down payment, draws, and reserves
Construction lenders look for strong equity and liquidity. Conventional construction loans often require 20 to 25 percent down or land equity, while some one-time close options can allow lower down payments with FHA or VA eligibility FHA OTC basics and VA construction information. Expect interest-only payments on funds drawn, inspection fees at each draw, and a lender holdback or contingency to cover overruns typical construction-loan mechanics.
Appraisal and valuation considerations
Your appraisal is based on the as-completed home. The appraiser will review plans, specs, finishes, and comparable sales, plus acreage factors like access, drainage, utilities, and flood risk. For single-close loans, investor rules cap the construction window and may require appraisal updates if timelines slip Fannie Mae single-closing guidance.
Follow the financing timeline step-by-step
Pre-approval and lender selection
- Interview lenders who regularly finance acreage builds in St. Johns County.
- Discuss one-time close versus two-close structures and confirm product availability Fannie Mae overview of construction products.
- Gather documents: income and asset verification, credit authorization, and the early version of your plans and budget CFPB construction-loan basics.
Land purchase and due diligence
- Confirm zoning, access easements, and any deed restrictions.
- Check flood zone and elevation. Parcels in a Special Flood Hazard Area will require flood insurance and may need elevation certificates county floodplain resources.
- Verify utilities. If outside SJCUD service, confirm septic feasibility and well requirements with Environmental Health and water management authorities Environmental Health overview and utility service info.
- Estimate impact and connection fees with the county so your cash plan is realistic utility development group.
Final plans, builder contract, and draw schedule
Lenders require a licensed builder, a fixed-price contract, full plans and specs, a schedule of values, draw schedule, and proof of builder insurance and license. Owner-builder loans are rarely approved. Government-backed programs typically require a licensed, approved builder VA construction expectations.
Inspections, change orders, and converting to permanent
Each draw triggers an inspection. Keep change orders tight, since large scope changes can require re-approval of budget, appraisal updates, or extra cash. Before final conversion, you need a Certificate of Occupancy and lien releases. For single-close loans, conversion happens when the lender confirms completion under program rules Fannie Mae conversion overview.
Qualify your project and reduce risk
Borrower requirements and documentation
Expect standard income, credit, and asset guidelines, plus reserves and contingencies. Provide tax returns or W-2s, bank statements, and details on any HELOC or cash sources. Construction loans carry more risk and require extra disclosures and planning compared to traditional mortgages CFPB guidance.
Builder and project approval
Lenders review your builder’s license, insurance, experience, and references. They will also look at the build site: recorded access, no unresolved environmental red flags, flood status, and a feasible plan for utilities. Septic or well approvals and county permits must align with the construction timeline St. Johns County permitting and Environmental Health.
Insurance, title, and closing coordination
- Builder’s risk insurance during construction, then a standard homeowner policy at conversion.
- Title updates and lien releases at each draw, plus a Notice of Commencement as required by Florida law.
- Flood insurance if the parcel is in an SFHA, based on county or FEMA flood determinations county flood resources.
Common pitfalls and how to avoid them
- Appraisal gaps. Align plans and finishes with nearby comps and budget for potential valuation shortfalls single-closing appraisal timing rules.
- Cost overruns. Include a 10 to 15 percent contingency and understand your lender’s holdback policy typical draw mechanics.
- Timeline slips. Investor rules cap construction periods. Build a realistic schedule with your builder and monitor weather and supply variables Fannie Mae limits.
- Utility or septic issues. Confirm SJCUD availability or onsite septic approval early to prevent deal-killers utility development group and Environmental Health.
Work with a local build team
Role of a local agent in acreage builds
A local agent helps you find the right parcel, run feasibility checks, and write a contract that protects your timeline and funds. You also get comps for the appraiser, introductions to lenders that actually finance acreage, and guidance on impact fees, flood, and utility status.
Lender, builder, and consultant coordination
Bring your lender and builder together early. Share plans and budgets, confirm draw milestones, and map permit sequences. When everyone sees the same timeline, inspections and draws stay on track. If you plan to use one-time close, confirm product availability and appraisal requirements at the start Fannie Mae construction products.
Communication cadence and decision checkpoints
Use a simple rhythm:
- Weekly check-ins during site work and foundation
- Draw meeting before each inspection
- Budget review at framing and again at finishes
- Permit and inspection checkpoint before the final draw and CO
Next steps to finance your Hastings build
- Clarify your total budget, including land, site work, contingencies, and soft costs.
- Choose a financing path and interview lenders who do acreage and construction in St. Johns County.
- Lock a builder and finalize plans, specs, and a draw schedule. Confirm permits and utility or septic plans with the county.
- Set a realistic timeline that fits lender and investor rules for construction periods and appraisal validity.
If you want help sourcing acreage, vetting parcels, and coordinating lender and builder introductions, connect with David Stanley. As a local advisor serving St. Augustine and nearby markets, David can streamline your land search, due diligence, and financing plan so you can break ground with confidence.
FAQs
What is a construction loan and how is it different from a mortgage?
- A construction loan funds the build in stages with inspections and draw releases. It is higher risk and more complex than a standard mortgage, with special disclosures and timelines see CFPB overview.
Can I do a one-time close for a custom home on my Hastings acreage?
- Yes, if a participating lender offers construction-to-permanent loans and your project meets program rules. FHA and VA have one-time close options, but availability is lender dependent FHA OTC and VA construction guidance.
Will USDA financing work in Hastings?
- Some parcels may qualify if they are in an eligible rural area and you meet income and credit guidelines. Ask lenders about USDA single-close options and confirm address eligibility using USDA resources USDA programs.
What permits and approvals do I need before my lender will release draws?
- St. Johns County requires a clearance sheet, building permits, and inspections as work progresses. You will also need septic or utility approvals, stormwater compliance, and a Certificate of Occupancy at the end county permitting and utility development.
How do flood zones affect my build and insurance?
- If your parcel is in a Special Flood Hazard Area, lenders require flood insurance and often an elevation certificate. Flood status also influences appraisal and underwriting county floodplain management.
What down payment should I expect for a construction loan?
- Conventional construction loans often expect 20 to 25 percent down or land equity. FHA one-time close can allow 3.5 percent down for eligible borrowers, and VA can allow low or no down for eligible veterans if a lender offers the program FHA OTC basics and VA information.
What are the biggest cost surprises on acreage builds?
- Site work, septic or water connections, driveways or culverts, stormwater controls, and county impact or connection fees. Build a contingency and confirm fee schedules with the county early stormwater forms and fees and utility development group.
How long can construction take under one-time close rules?
- Investor rules cap construction periods and appraisal validity. Many single-closing guidelines set initial and total period limits, so align your schedule with lender and investor requirements from day one Fannie Mae single-closing guidance.
