BUILDING YOUR DREAM 1st Florida Lending offers Conventional Construction to Perm Funding for homebuyers pursuing primary residence and second home construction. Leveraging our program will enable competitive pricing, streamlined processing, and flexible options for your construction projects. HIGHLIGHTS AND FEATURES Two phases, one closing. Unlike a traditional construction loan that requires a second closing and refinance, this program converts automatically at project completion saving time, fees, and rate risk. Construction Phase: Draw funds in stages as construction milestones are met. Interest-only payments during the build period are based on drawn balance. Inspector signoffs required per draw schedule. You only pay interest on funds disbursed, keeping costs lower during construction. Final Appraisal & Underwriting: At completion, the property is appraised using the "as-completed" value based on the finished home. Your qualification is based on your debt-to-income ratio (DTI) calculated as: Total Monthly Debts ÷ Gross Monthly Income. Conventional loans typically require DTI of 43% or lower (up to 50% with strong compensating factors). Automatic conversion to permanent loan! No second closing, no re-underwriting of income. The loan converts to your selected permanent structure with the terms that best fit your scenario at the pre-agreed locked rate. If your land has equity, it can reduce or eliminate the required cash down payment. THE APPROVAL PROCESS INCOME VERIFICATION FOR CONVENTIONAL LOAN: Qualify for conventional and VA construction to perm funding is based on documented income: • Last 2 years of tax returns • Last 2 years of W-2s • Most recent 30 days of pay stubs • Employment verification • Bank statements showing reserves and down payment funds • This traditional documentation allows for the most competitive rates and terms. INCOME VERIFICATION FOR SELF- EMPLOYED: Qualify for Self-Employed construction to perm funding is based on documented income: • Last 2 years of personal tax returns • Last 2 years of business tax returns (1120, 1120S, or 1065) • Last 2 years of 1099s • Year-to-date profit & loss statement • 24 months of Business Bank Statements • CPA letter (sometimes required) SINGLE CLOSE: One-time closing costs. Pay closing costs once. No second closing to convert from construction to permanent loan, saving you thousands in fees and weeks of time. FLEXIBLE VESTING: Personal ownership accepted. Title can be held in your personal name for primary residences and second homes. DRAW SCHEDULE: Milestone-based draws. Funds released in stages tied to construction progress, inspected by a third- party draw management service or approved inspector. RATE LOCK: Lock your interest rate at closing. Your rate is protected throughout the construction period and carries into your permanent mortgage with no risk of rates increasing during construction. COMPETITIVE PRICING: Conventional financing offers some of the lowest rates available for qualified borrowers with strong credit (720+) and sufficient down payment (20%+ to avoid PMI).

FREQUENTLY ASKED QUESTIONS How is the loan approved? This loan is approved based on traditional underwriting standards including credit score, debt-to-income ratio (DTI), employment history, and verified income. Your DTI is calculated as: Total Monthly Debt Payments ÷ Gross Monthly Income. Conventional loans typically require DTI of 43% or lower, though up to 50% may be allowed with compensating factors like high credit score, large down payment, or significant cash reserves. How is the property value determined if it isn't built yet? At loan approval, an appraiser provides a "subject to completion" appraisal estimating the home's value once finished based on your construction plans, specifications, and comparable sales. At conversion, a final "as- completed" appraisal confirms the actual finished value. The loan is based on the lower of cost or appraised value. What happens if construction runs over budget or timeline? Budget overruns must be funded from the borrower's own reserves; the lender will not increase the loan mid- construction without a formal modification and re-appraisal. Timeline extensions may be granted on a case-by- case basis, typically up to 90–180 additional days with lender approval. Borrowers are encouraged to build a 10–15% contingency into project budgets and maintain adequate cash reserves. What is the typical construction-draw fees? Draw inspection fees typically range from $150–$350 per draw and are paid at the time of each draw request. Most programs allow 4 to 8 draws over the construction period. Third-party inspectors verify work completion before each draw is released, ensuring quality control and protecting both you and the lender. What Property Types are Allowed? • Owner-Occupied Primary Residences and Second Homes • Single Family and Multifamily 1–4 units (the borrower must occupy 1 unit) • Competitive interest rates for qualified borrowers How Can Equity in Your Land Apply to Your Down Payment? If you already own the lot with no existing liens, the appraised value of that land counts as equity toward the project, reducing or eliminating the cash you need to bring to closing. Land equity is one of the most powerful and underused advantages a borrower can bring to a construction-to-perm loan. In many cases, it satisfies the entire down payment requirement. How does land equity replace cash? Underwriting calculates your loan-to-cost (LTC) and loan-to-value (LTV) based on total project cost and as-completed value. When you contribute land, you own free and clear, its appraised value is treated the same as a cash down payment, reducing the loan amount needed and your out-of-pocket requirement. Example: • Total Project Cost: $500,000 (land value $100,000 + construction $400,000) • Required Down Payment: 10% = $50,000 • Land Value (owned free & clear): $100,000 • Cash Required at Closing: $0 (land equity exceeds down payment requirement) • Loan Amount: $400,000 (construction costs only) • Your owned land becomes your equity contribution, eliminating the need for cash down payment. What credit score do I need for the best rates? While the minimum credit score is typically 680, borrowers with credit scores of 740 or higher receive the best interest rates and terms. Higher credit scores can offset slightly higher DTI ratios or lower down payments. Review your credit report before applying and address any errors or issues. Can I remove PMI on the Conventional permanent loan after construction? If you put down less than 20% and are required to carry Private Mortgage Insurance (PMI), you can request removal once you reach 20% equity through a combination of payments and appreciation. PMI automatically terminates at 22% equity. An appraisal may be required to confirm current home value. Can both programs be used for primary residences and second homes? Yes! Both Conventional and Self-employed construction-to-perm financing work for Primary and home, second homes as well as multi-family (the borrower is required to occupy one of the units. What is the difference between the Conventional and Self-Employed Construction-to-Perm Funding? Conventional Lower down payment (5% to 10%) depending on loan amount and credit score Lower interest rates (best pricing available) Lower reserves required (2-6 months) Self-Employed Higher down payment requirements (20- 30%) No PMI Higher interest rates (premium pricing) Higher reserves required (6-12 months)