Fix and Flip Loans in Miami, FL: Budget, Draws and the 50% Rule

Short answer

A fix and flip loan in Miami funds part of the purchase plus a rehab budget released in draws, sized against the after-repair value (ARV), and is repaid when you sell. It is a business-purpose loan, never for a home you will live in. In the City of Miami the deal turns on three local numbers: the 50% substantial improvement limit in flood zones, measured over two years against the structure's value, a 2026 total millage of 19.9544 mills while you hold, and deed stamps of $0.60 per $100 when you sell.

Start with ARV from City of Miami comps

The statewide rules (owner-builder limits, licensed contractors, Citizens 4-point and roof rules) are in our Florida fix and flip guide, and lender basics and usury limits are in the Miami hard money page. This page is about running a flip budget inside the City of Miami.

ARV is what the house should sell for once the work is done, and the lender caps the loan against it. As of October 2026, the Q3 2026 Florida Realtors city data published by MIAMI REALTORS shows the City of Miami's median single-family sale at $815,070 on 270 sales, up 5.9% from a year earlier, with a median of 45 days to contract and 6.1 months of supply. Countywide the median house was $685,000.

Two cautions for Miami comps:

• Use closed, renovated sales on similar lots, in the same flood zone and the same transect zone. A house in a T3 single-family zone and one a few blocks away in a T4 zone are not the same product.
• Do not pull ARV from condos. City condo and townhouse supply was 16.8 months in Q3 2026 with a $555,000 median and 94 days to contract. Condo flips carry more time risk, and the association's recertification and milestone status can block the buyer's financing.

The 50% rule as the City of Miami measures it

If the house sits in a FEMA special flood zone, your rehab budget has a ceiling. Under the City of Miami Building Department policy issued May 18, 2021, in effect as of October 2026:

• Work is a substantial improvement when its cost reaches a cumulative 50% of the market value of the structure over a two-year period.
• Market value is the building only, not the land or other site improvements.
• The city may accept the Miami-Dade Property Appraiser's assessed value for the building only, or a Florida-licensed appraisal of the structure only, done under USPAP and less than six months old.
• Your construction cost must be backed by a fully executed AIA owner-contractor agreement (or equivalent) with a detailed cost breakdown, plus an Architect of Record affidavit that the contract covers the whole scope on the plans.
• The city can reject costs it finds unrealistic and can ask for a second appraisal.

Cross the line and the whole house must meet current FEMA, city floodplain and Florida Building Code rules for new construction, which can mean elevating the structure. On an older Miami house with a low building value, a kitchen, baths, roof, windows and an electrical upgrade can cross 50% quickly. Because the window is two years, splitting the work into a second permit a few months later does not reset the count. Get the building-only value before you write the offer and set the scope to fit.

Rehab budget and draws: what the lender wants to see

The rehab money is approved up front but held back and paid in draws after an inspector confirms each stage. In Miami, the same paperwork that satisfies the city's 50% review also makes your draw schedule cleaner:

• A line-item budget that matches the AIA contract the city will see. If your lender's budget and your permit valuation disagree, expect questions from both.
• A contingency. Older Miami houses hide surprises behind walls and under floors.
• Draw stages tied to permit inspections, such as demolition, rough-in, roof and windows, then finishes. Lenders often reimburse after work is done, so you or your contractor carry the cost of each stage until the draw funds.
• Permits before money. Most lenders will not release a draw for work that needs a permit until it is issued. Build permit review time into the loan term.
• Recertification and open cases. Single-family homes and duplexes are exempt from building recertification, but a small multifamily flip is not. Check for open permits or an unsafe-structure case before you close.

Holding costs: Miami-Dade millage and doc stamps

Every month you own the house costs money. The Miami-specific pieces, as of October 2026:

• Property tax. The 2026 adopted total millage for a City of Miami address is 19.9544 mills (about 2.0% of taxable value), including the city's 7.1080 operating and 0.2536 debt mills. Unincorporated Miami-Dade is 16.8983. A flip gets no homestead exemption.
• Assessment resets. The non-homestead 10% cap on yearly assessment increases (excluding school taxes) resets after a change of ownership, so your buyer's purchase can raise next year's assessment. Taxes are prorated at closing, so you pay your share for the months you held.
• Loan taxes at purchase. Note stamps of $0.35 per $100 of the loan and intangible tax of 2 mills.
• Deed stamps. Miami-Dade's deed rate is $0.60 per $100. The surtax of up to $0.45 per $100 does not apply to a deed for only one single-family residence, but does apply to a duplex or small apartment building. Who pays is set in the contract; see doc stamp tax.
• Interest, draw fees, insurance and utilities, plus extension fees if you run past the term.

Example only: a City of Miami flip in a flood zone

Example only, not a quote. An investor buys a 1950s house in a flood zone for $500,000. The Miami-Dade Property Appraiser shows a building-only value of $220,000. The ARV from renovated comps is $780,000.

• 50% ceiling: $220,000 × 50% = $110,000 of work over two years. The first scope comes in at $140,000, so it crosses the line. The investor trims to $105,000 (cosmetic kitchen, baths, impact windows, paint) and drops the addition.
• Loan taxes: on a $460,000 loan (purchase money plus holdback), note stamps $1,610 and intangible tax $920.
• Property tax while holding: 19.9544 mills on $500,000 is about $9,977 a year, roughly $831 a month, or about $4,989 for six months.
• Deed stamps at sale, if the seller pays them: $780,000 × $0.60 per $100 = $4,680.

Add interest, points, draw fees, insurance, utilities, commissions and title on both ends. If the margin only works at the top comp, it does not work. Rates vary daily; call 305-425-1990 for today's pricing.

Business purpose only, and how QMS helps

Fix and flip loans are business-purpose loans. Under the CFPB's Regulation Z commentary, a property is not non-owner-occupied if the owner expects to live there more than 14 days in the coming year. If you want to renovate a Miami house and live in it, look at an FHA 203(k) or conventional loan instead.

Deciding to keep the house as a rental? A DSCR loan can refinance it based on rent; in the City of Miami, single-family homes and duplexes in T3 and T4-R zones are not eligible for short-term rental, so underwrite on a long-term lease.

QMS Lending (NMLS #1781090) is an independent mortgage broker in Miami, FL, with 100+ lenders, including private investor lenders. We compare leverage, points, draw rules and extension costs side by side. See fix and flip loans or call 305-425-1990, in English or Spanish. Subject to credit and property approval.