Financing Pre-Construction in 2026: Cash at Closing, Rate Locks, and Developer Incentives

You cannot mortgage a Florida pre-construction condo’s deposits — the 20–40% paid before completion is cash, and the mortgage only funds the balance at closing, often two-plus years after contract. As of September 2026, 30-year jumbo rates run roughly 7.1–7.25%, standard rate locks last 60–90 days, and extended locks reach about 12 months.

The most common misconception among first-time pre-construction buyers is that they are “getting a mortgage on a condo that doesn’t exist yet.” They are not. A Florida pre-construction purchase is really two financial events separated by years: a series of cash deposits during construction, and a conventional closing — mortgage optional — when the building receives its certificate of occupancy. Understanding that split resolves most of the anxiety, and most of the planning mistakes. Here is how the money actually moves in 2026, with the current rate environment, lender rules, and developer incentives that shape it.

Can you get a mortgage on a pre-construction condo in Florida?

Not during construction — only at closing. Lenders do not mortgage an unbuilt unit because there is no collateral to appraise and no condo association to underwrite. Every dollar due before completion is cash from the buyer. The mortgage, if you use one, funds the final balance — typically 60–80% of the purchase price — when the unit delivers.

There is real statutory protection behind those cash deposits. Under Florida Statute 718.202, the first 10% of the purchase price must be held in escrow until closing; amounts above 10% may be released to the developer for actual construction costs if the contract permits — which nearly all do. That means deposits beyond the first 10% are working capital for the building, not a segregated fund, and your practical protection is the developer’s balance sheet and completion track record. It is one reason buyers gravitate to capitalized sponsors: Olara West Palm Beach, for instance, closed a $380 million construction facility that fully funds the build, per our Olara buyer’s guide, and projects tracked in our near-completion 2026 deliveries report have largely de-risked the construction question.

Plenty of luxury buyers skip the mortgage entirely. Cash covered 47.5% of Miami-Dade existing condo sales and 57.2% of Palm Beach County condo purchases in July 2026, per the MIAMI Association of Realtors — and pre-construction skews even more heavily cash, since developers commonly offer 2–5% discounts for all-cash purchases, per Manhattan Miami’s 2026 financing guide.

When do you actually need the cash? The deposit schedule, decoded

Florida pre-construction deposits follow construction milestones. The prevailing 2026 structure, per LuxuryDade’s financing guide, is 10% at contract, 10% at groundbreaking or permitting, 10% at top-off, and the remaining 70% at closing — roughly 30% cash before delivery. Ultra-luxury projects still ask 40–50% across four or five milestones; conversely, condo analyst Peter Zalewski has documented developers cutting requirements from 50% toward 30% to keep velocity up in a slower market — about $200,000 less cash required per $1 million of price.

Here is what that looks like on a $3 million purchase with a 2026 contract and a 2028 delivery, assuming the common 10/10/10/70 schedule:

Example: deposit schedule and financing timeline on a $3M Florida pre-construction purchase (10/10/10/70 structure; illustrative timeline as of September 2026)

Milestone	Approx. timing	Cash due	Running total	Financing action
Contract signing	Month 0 (late 2026)	$300,000 (10%)	$300,000	None — first 10% escrowed under FS 718.202. 15-day rescission window.
Groundbreaking	Months 3–9	$300,000 (10%)	$600,000	None. Funds above 10% may be used for construction.
Top-off	Months 14–20	$300,000 (10%)	$900,000	Begin lender conversations; building now appraisable soon.
~6–12 months pre-delivery	Months 15–21	$0	$900,000	Formal mortgage application; extended rate lock (up to ~12 months) if desired.
Closing at TCO	Months 22–28 (2028)	$2,100,000 (70%)	$3,000,000	Jumbo mortgage funds the balance (e.g., $2.1M at ~70% LTV), or cash. Closing costs ~2–7% additional, including the developer fee.

Stated in prose: on a $3 million unit you would typically wire $300,000 at contract, another $300,000 at groundbreaking, and a third $300,000 at top-off — $900,000 of cash over roughly 18 months — then finance or pay the final $2.1 million at closing in 2028. Budget for the developer fee and closing costs on top, and for carrying costs after delivery; our breakdown of what a $5M new-development condo really costs per year quantifies that next phase.

One more planning note: if your circumstances change mid-construction, those deposits are not trivially recoverable. Your realistic exits are negotiating with the developer or assigning the contract where permitted — see our guide to assignment rights, delay clauses, and exit options in Florida.

Can a lender pre-approve you or lock a rate two years before closing?

Pre-approve, informally yes; lock, no — not two years out. A standard pre-approval is valid for 60–90 days, so a letter issued at contract signing in 2026 is a comfort document, not a commitment for a 2028 closing. Lenders underwrite you against the rates, guidelines, and financials that exist near delivery. LuxuryDade’s 2026 guide is blunt about the sequencing: start the formal mortgage process 6 to 12 months before expected delivery; applying earlier “wastes time since rate locks expire.”

Extended locks exist, but they are measured in months, not years. Standard locks run 60–90 days. Construction-oriented lenders go longer: Fidelity Bank, for example, publishes extended locks of 60, 90, 120, 180, 270, and 360 days for new-construction loans — an upfront fee applies but is credited back at closing, and a float-down honors a lower market rate within 45 days of closing. Some developer preferred-lender programs advertise similar extended-lock windows. [VERIFY: named national lenders currently offering 18–24-month locks on Florida condo purchases — none confirmed in September 2026 sourcing; longest verified program is 360 days.] The practical takeaway: your rate risk is genuinely open from contract until roughly the last 12 months before closing, and no product fully closes that gap.

Will your brand-new condo be “non-warrantable” — and does it matter at $3M?

Often yes, temporarily — and at the jumbo tier it matters less than buyers fear. Fannie Mae and Freddie Mac will not buy loans in a new project until it is “warrantable”: per 2026 agency guidelines summarized by CondoTek/MGIC and LegalClarity, that generally requires at least 50% of units sold or under contract to primary- or second-home buyers, no single entity owning more than 20% of units (in 21+ unit projects), commercial space under 35%, and no more than 15% of units 60+ days delinquent on assessments. A tower that just received its TCO with heavy investor pre-sales can fail those tests in year one. Agency scrutiny also tightened in 2026: Limited Review retires August 3, 2026, making Full Review mandatory, and minimum reserve funding rises from 10% to 15% of budgeted assessment income for loans dated on or after January 4, 2027 — though in a helpful twist for this market, the PERS review requirement was eliminated for Florida new-construction projects.

Here is why it rarely kills a luxury deal: most $1.5M+ purchases exceed conforming limits anyway ($806,500 standard / $1,209,750 in high-cost areas in 2026), so buyers are already in jumbo territory, where portfolio lenders — banks that keep loans on their own books — set their own project standards. Expect pricing roughly 0.25% to 0.75% above comparable conventional product for portfolio loans, and 0.5 to 1.5 points above conventional for non-warrantable programs generally, with down payments of 10–25%+. Developers’ preferred lenders typically pre-underwrite the building itself, which is the single biggest time-saver at closing.

What financing incentives are developers offering in 2026?

With South Florida’s overall condo market carrying 10–12 months of resale supply, developers are competing on terms, not just finishes. Incentives verified in 2026 coverage and marketing include:

• Reduced deposit schedules — cuts from 50% toward 30% of purchase price, documented by Peter Zalewski’s Miami condo intelligence reports, freeing roughly $200,000 of cash per $1 million.
• Mortgage rate buydowns of one to three years through developer preferred-lender programs, per Manhattan Miami’s 2026 pre-construction financing guide.
• Closing-cost credits when buyers use the preferred lender, plus streamlined project approval.
• All-cash discounts of 2–5% off contract price.
• Broker commission increases from 5% to 7% — not a buyer credit directly, but a signal of negotiating room in the sales gallery.

At the trophy tier, incentives turn experiential — Harrods design consultations at The Residences at Mandarin Oriental, a limited-edition Pagani Utopia Roadster for Pagani Residences penthouse buyers — but the financially meaningful asks in a 2026 negotiation are deposit restructuring, a rate buydown, and a developer-paid fee or two. Zalewski expects free maintenance-fee periods and unit upgrades to appear next if absorption slows. Current market-wide context for how much leverage you have, submarket by submarket, is in our September pre-construction monthly and the September 2026 PPSF index.

What happens if rates move before your closing?

You wear the risk — in both directions. As of mid-September 2026, the average 30-year fixed sits near 6.97–7.12% and 30-year jumbo near 7.10–7.25%, per Fortune’s September 14 rate survey and Mortgage News Daily’s September 11 index — jumbo up roughly a full point from a year earlier, with the Fed holding at 3.50–3.75% ahead of its September meeting. A buyer who contracted in 2024 expecting “rates will be lower by delivery” is closing into a costlier market than planned. That is the scenario to underwrite, not the hopeful one.

Four practical defenses. First, qualify at a stress rate: if you need today’s rate plus one point to work on the closing balance, you are too tight for pre-construction. Second, use the calendar: begin lender conversations at top-off and lock — with a float-down option — once inside your lender’s extended-lock window. Third, negotiate the buydown: a developer-funded 2-1 or multi-year buydown is worth more than a decorative credit in a 7% environment. Fourth, keep the cash option alive: many luxury buyers close in cash to capture the discount, then finance after closing once the building becomes warrantable and pricing improves. And remember the true deadline risk is the building’s, not the Fed’s — delivery slips change your lock math, which is why we track completion timing in the 2027 Delivery Calendar and delay-clause mechanics in the assignment guide above. For project-level diligence across the pipeline, start at our New Developments hub.

Frequently Asked Questions

Can you finance a pre-construction condo in Florida?

Not during construction. All deposits — typically 20–40% of the price, paid at contract, groundbreaking, and top-off — must be cash. Mortgage financing only enters at closing, when the completed unit can be appraised, and funds the remaining 60–80%. You apply for that mortgage roughly 6–12 months before the building’s expected delivery, as of 2026 lending practice.

What is the typical deposit schedule for Florida pre-construction condos?

The common 2026 structure is 10% at contract, 10% at groundbreaking, 10% at top-off, and 70% at closing — about 30% cash before delivery. Ultra-luxury towers may require 40–50% across four or five milestones, while some developers have cut schedules toward 30% as an incentive. Florida law escrows the first 10% until closing.

Are pre-construction condo deposits protected in Florida?

Partially. Florida Statute 718.202 requires the first 10% of the purchase price to stay in escrow until closing. Deposits above 10% may be released to the developer for construction costs if the contract allows — which is standard — so your protection beyond the first 10% is effectively the developer’s financial strength and construction financing.

Can a lender lock a mortgage rate two years before a condo closes?

No. Standard rate locks run 60–90 days, and the longest extended locks verified in 2026 run about 360 days through construction-focused lenders such as Fidelity Bank, typically for an upfront fee credited at closing, sometimes with a float-down. From contract until roughly the final year before delivery, your rate exposure is open.

What are jumbo mortgage rates in September 2026?

As of mid-September 2026, 30-year jumbo averages run roughly 7.10–7.25% — Fortune’s survey showed 7.097% on September 14 and Mortgage News Daily’s index 7.25% on September 11 — about a full point higher than a year earlier. The conventional 30-year fixed sits near 6.97–7.12%, with the Fed funds rate at 3.50–3.75%.

Why would a brand-new condo be non-warrantable?

New projects fail Fannie Mae/Freddie Mac warrantability until roughly 50% of units are sold to primary- or second-home buyers, plus limits on single-entity ownership (20%), commercial space (35%), and assessment delinquencies (15%). Most new towers are non-warrantable at first delivery. Jumbo portfolio lenders and developer preferred lenders finance these anyway, typically at 0.25–1.5 points above conventional pricing.

What financing incentives are Florida condo developers offering in 2026?

Documented 2026 incentives include deposit reductions from 50% toward 30% of price, mortgage rate buydowns of one to three years via preferred lenders, closing-cost credits, and 2–5% discounts for all-cash buyers. Developers have also raised broker commissions to as much as 7%, a signal of negotiating room on terms if not always on headline price.

How much cash do you need for a $3 million pre-construction condo?

Under the common 10/10/10 schedule, about $900,000 in staged deposits before closing — $300,000 each at contract, groundbreaking, and top-off — plus the $2.1 million balance at closing via jumbo mortgage or cash, and closing costs (including the developer fee) on top. A 40–50% ultra-luxury schedule would require $1.2–$1.5 million before delivery.

Should you pay cash or finance at closing?

Many luxury buyers close in cash — 47.5% of Miami-Dade and 57.2% of Palm Beach County condo sales were cash in July 2026 — to capture developer all-cash discounts of 2–5%, then add financing later once the building is warrantable. Financing at closing preserves liquidity but, as of September 2026, costs roughly 7.1–7.25% on a 30-year jumbo.