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Program 03
Ground-Up Construction in Galveston
Ground-up construction loans for builders working the Galveston coastline.
Built for spec home builders and developers. We finance the land and the vertical build up to 70% LTV and 85% of cost, on a 12 to 24 month term with draws that keep pace with the job. Within 1,000 feet of the mean high tide line, or seaward of the first public road, budget weeks of beachfront review before the building permit clock even starts, and design to the city's 18-inch freeboard requirement from day one. Business-purpose only, and every deal is set in underwriting.
70%
max LTV
85%
of cost
Most states
funding
$5M
max loan
Typical figures, subject to underwriting and market conditions. Not a commitment to lend.
How it works
We finance both the land and the vertical construction, with a draw schedule built around your timeline. Experienced builders can access higher leverage on cost.
Who it's for
Spec home builders
Developers and operators
Lot purchase or teardown
Build-to-rent strategies
Typical terms
Loan amountUp to $5M
LeverageUp to 70% LTV / 85% LTC
Term12 to 24 months
DrawsPer build schedule
RateFrom 10.00%*
UseSpec or build-to-rent
*Typical terms, subject to underwriting and market conditions.
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Local FAQ
Ground-Up Construction in Galveston, answered.
How long does beachfront permit review take before I can even pull a building permit in Galveston?
Budget 4 to 6 weeks minimum, and up to 12 weeks if Planning Commission review is triggered. Any construction within 1,000 feet of the mean high tide line, or seaward of the first public road, needs a Beachfront Construction Certificate and Dune Protection Permit, and the city will not issue it before the Texas General Land Office comments, which alone takes 10 business days. If the structure sits within 50 feet of the Dune Protection Line, Planning Commission review adds another 2 to 6 weeks and raises the fee to $750, or $950 with fibercrete in the Enhanced Construction Zone. Landward of the seawall none of this applies, which is a real reason to know which side of the line a lot sits on before you underwrite the carry.
Does Galveston use the standard 12-inch Gulf Coast freeboard requirement?
No, and copy built around 12 inches will undersize the build. The City of Galveston requires the finished floor at or above base flood elevation plus 18 inches in AE zones, and the lowest horizontal structural member 18 inches above base flood elevation in VE zones. VE-zone enclosures below that line are capped at 299 square feet of breakaway construction, and utilities cannot be mounted on or run through the breakaway walls. That 18-inch standard, not the more common 12-inch figure, is what your architect should be designing to from the first set of plans. See our Texas construction and permit rules for how draws are structured around a build like this.
If I'm building new in a VE flood zone, does that change my wind insurance requirement too?
Yes, wind and flood coverage have to close together on a new VE-zone build. TWIA requires proof of NFIP flood coverage for any structure in flood zone V, VE or V1-30 that is constructed, altered, remodeled or enlarged on or after September 1, 2009, wherever NFIP coverage is obtainable. That is the one place TWIA links its wind policy to a flood policy, and it means the certificate of occupancy, the flood binder and the wind binder need to line up before the takeout, not after.
What does a VE-zone enclosure actually cost me in usable space?
Whatever sits below the elevated living floor caps out at 299 square feet, and none of it can carry utilities. In VE zones, the City of Galveston limits enclosures below base flood elevation to 299 square feet, outside dimensions, of breakaway construction, usable only for storage, parking access and limited entry, never as finished living space. Utilities and attendant equipment cannot be mounted on, pass through, or run along the breakaway walls; where they must sit below BFE for life-safety or code reasons, they go on the landward side of the foundation, with any lines that must cross a wall routed through a utility blockout so the wall can still break away in a storm without damaging them. Design the ground-level footprint, and where your water heater and electrical panel land, around that 299-square-foot ceiling from the first set of plans, not after the engineer flags it.
Is a water or municipal utility district going to add to my carry cost on a Galveston County lot?
Only if the lot sits on the mainland, and it can be a meaningful add. The island itself is largely free of them, but Galveston County carries more than 40 municipal utility, management, water control and improvement, and fresh water supply districts, with rates running from 0 up to 1.500000 per $100 of value. A MUD at 1.15 stacked on a 2.10 mainland tax rate is a 3.25% effective rate, and it does not show up unless you pull the specific parcel's appraisal district account. Confirm district status with the Galveston Central Appraisal District before you finalize a mainland lot purchase and pro forma.
Is new construction volume in Galveston County trending up or down right now?
Down, and worth pricing into how you time a spec build. Galveston County building permits authorized 2,525 housing units in 2025, a 19.8% drop from 3,148 in 2024, after running 2,429 to 2,689 in the two years before that. A slower permitting year can mean less competition for trade labor and inspection slots on your build, but it is also a signal to underwrite your exit against current absorption rather than the prior year's pace. If the exit is a hold instead of a sale, take it out with the Galveston DSCR program.
How much of a Galveston build do I have to fund myself?
Roughly 15% of total cost, and the land has to pencil inside the LTV too. We go to 85% of cost and 70% of value, whichever binds first. On a $600,000 Galveston build that is up to $510,000 from us and $90,000 from you (600,000 x 85% = 510,000), released in draws that follow the build schedule rather than funded up front. On an elevated island build, the money you spend before the slab, beachfront review, engineering, and the 18-inch freeboard design, is real cost, so get it into the budget the LTC is measured against. Subject to underwriting.
Do I need a building track record to get a construction loan in Galveston?
No, but experience buys leverage. Experienced builders can access higher leverage inside the 85% of cost and 70% of value caps. We run credit, but on an asset-based construction loan it carries far less weight than at a bank and there is no minimum score; weaker credit is usually offset with lower leverage rather than a decline. There is no hard credit pull to start. A first-time builder on the Galveston coast should expect the plan set, not the resume, to be the hard part, given the 18-inch elevation standard and the beachfront review. Subject to underwriting.
Is the term long enough to absorb Galveston's beachfront permit review?
Usually, if you start the clock before you close. The term runs 12 to 24 months, and up to $5 million in loan amount, for a spec or build-to-rent project. Beachfront Construction Certificate and Dune Protection Permit review runs 4 to 6 weeks on its own, and up to 12 weeks if Planning Commission review is triggered, which is real term burned before the first draw. Ask for the 24-month end of the range on a beachfront lot rather than the 12. Subject to underwriting.
More Ground-Up Construction questions, answered on the program page
Resources
Guides for Ground-Up Construction
Fix and Flip · 6 min read
Fix and Flip Loan Requirements: What You Need to Get Funded
Read the guide Fix and Flip · 5 min read
What Is ARV (After-Repair Value) and How Do You Calculate It?
Read the guide Construction · 5 min read
How Ground-Up Construction Loans Work
Read the guide Getting Funded · 4 min read
LTV vs LTC: What's the Difference?
Read the guide More in Galveston
Other programs in Galveston
Fix and FlipUp to 90% / 100% rehabRental / DSCR30-yr fixed, DSCR from 0.75CRE BridgeUp to $10M, 24-36 moTransactional FundingSame-day double-close capitalBank Statement / No-DocNo tax returns requiredConventional InvestmentNon-owner-occupied investmentPortfolio LoansMultiple properties, one loanCRE PermanentLong-term agency & permSBA Financing7(a) & 504 placement
About the local figures on this page
Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.
Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-22.
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