A building permit is the legal authorization required to start construction. Before digging a foundation or framing a wall, the builder submits the final construction documents (plans, structural calcs, energy code compliance sheets) to the local building department for review. The department checks that the project complies with the building code, zoning, and local ordinances. If it passes, the permit is issued and the builder can begin work.
Permit costs vary widely by jurisdiction and project value, typically ranging from a few hundred to several thousand dollars. The permit is usually paid for by the builder and is a hard cost included in the project budget. Inspection sign-offs at key milestones (footing, framing, rough MEP, dry-in, final) are part of the permit process. Most construction lenders require proof of the building permit before the first draw, and the permanent lender requires a final sign-off (Certificate of Occupancy or equivalent) before funding the takeout loan. Delays in permit approval can postpone construction start dates and impact construction schedules. Different jurisdictions have different timelines and rigor in plan review, so builders working in new areas should understand local permit cycles.