San Antonio offers affordable lots and steady renters, but expansive soils, aquifer rules and Texas property taxes decide whether a new build pencils out.
In short: Our top pick for ground-up construction in San Antonio is LendingStreet. We finance residential investment projects of one to eight units, including spec homes, build-to-rent houses and infill duplexes. Loans are sized on loan-to-cost with terms set per project, funds are released on draws after inspections, and finished homes can be sold or refinanced into a 30-year DSCR loan. We test the exit early, because Texas property taxes on a new home often decide how much long-term debt the rent can carry.
San Antonio builders have room to work. Infill lots inside Loop 410, growing suburbs along Interstate 35 and Interstate 10, and steady rental demand from military households, medical centers and universities all support new spec and build-to-rent homes. LendingStreet finances ground-up construction for investors on residential projects of one to eight units.
Loans are sized on loan-to-cost, with terms set per project. Funds release on a draw schedule after inspections, and the finished homes can be sold or refinanced into a 30-year DSCR rental loan. Plans, permits, the budget and the builder's experience drive the review.
If your Alamo City project is ready, get a quote with the form below or call (877) 298-1001.
Every lender type has its place. A Texas community bank can suit a builder with a long local relationship, and a private lender can close quickly on a lot. For investor projects of one to eight units, the usual comparison looks like this.
| What San Antonio builders need | LendingStreet | Typical community bank | Typical hard money lender |
|---|---|---|---|
| Project types | Spec, build-to-rent, infill 1-8 units | Often established builders | Varies |
| Loan sizing | Loan-to-cost, per project | Often lower leverage | Varies; fees and terms vary |
| How funds release | Draws after inspections | Draws after inspections | Varies |
| After completion | DSCR refinance available | Separate permanent loan | Usually short-term only |
| LLC borrowing | Standard | Common | Common |
| What drives approval | Plans, permits, budget, builder | Often financial statements and deposits | Mostly the deal |
Infill builders look at older neighborhoods near downtown and inside Loop 410, including Tobin Hill, Government Hill, the near East Side, Beacon Hill and the blocks south of downtown, where narrow lots can fit a new single-family home or a duplex. Several neighborhoods near downtown are historic districts, where design review adds a step.
Spec and build-to-rent work also spreads across the suburbs and fast-growing parts of Bexar, Comal and Guadalupe counties: Schertz, Cibolo, Converse, New Braunfels, Seguin, Boerne, Helotes and the far west side near Alamo Ranch. Outside city limits, county rules and special districts can change the cost picture.
Inside the city, permits run through the Development Services Department, and historic district projects need review by the Office of Historic Preservation. Parts of northern Bexar County sit over the Edwards Aquifer recharge and contributing zones, where state and local rules add requirements for site work and impervious cover.
Much of the area has expansive clay soils, so engineered post-tension slabs and good drainage are standard. Flash flooding is a real risk along creeks and low-water crossings, so check floodplain maps before you buy a lot.
Texas has no state income tax and no real estate transfer tax, but property taxes are high, and investors do not get homestead exemptions. That tax line is the biggest factor in whether a finished rental can carry its own debt.
This example is illustrative and not a quote. A builder buys an infill lot for $95,000 and plans a 2,600-square-foot duplex. Hard costs are $165 a square foot, or $429,000, and soft costs for plans, engineering, permits, impact fees, utility connections and insurance are $46,000. Total cost is $570,000.
If the project were sized at 80% of cost, an assumption for illustration since terms are set per project, the construction loan would be $456,000 and the builder's equity $114,000.
The finished duplex is valued at $620,000, and each side rents for $1,850, or $3,700 a month. With taxes budgeted at $1,137 a month and insurance at $250, refinancing the full $456,000 into a 30-year DSCR loan would mean estimated principal and interest of about $3,111 and DSCR of about 0.82x. The rent supports a DSCR loan of about $339,000, with estimated principal and interest of about $2,313 and DSCR of about 1.00x, so the builder should plan to pay down about $117,000 at refinance, use a sub-1.0 DSCR program, or sell.
| Item | Refinance full construction balance | Refinance sized to rent |
|---|---|---|
| Loan amount | $456,000 | $339,000 |
| Estimated principal and interest | $3,111 | $2,313 |
| Taxes and insurance | $1,387 | $1,387 |
| Total monthly payment | $4,498 | $3,700 |
| DSCR at $3,700 rent | About 0.82x | About 1.00x |
The example shows why San Antonio builders test the exit before the first draw. A new home is taxed on its full value, so the rental refinance often supports less debt than the construction loan. Some builders plan to sell; others bring more equity or build on cheaper lots so the hold works.
If you build five or more rentals, a blanket portfolio loan can refinance them under one closing and one payment, qualified on the portfolio's combined cash flow.
Each draw follows an inspection that confirms the stage: foundation, framing, rough-ins, drywall and finishes. Summer heat and spring storms can shift the schedule, so a contingency line helps. Our construction draw schedule calculator can help you lay out the stages before you apply.
Compare lenders on the same questions. LendingStreet's answers are below.
Projects without plans or permits, or a borrower with no build track record and no experienced general contractor, usually do not qualify. A strong file includes:
Our top pick is LendingStreet. We finance one- to eight-unit spec, build-to-rent and infill projects sized on loan-to-cost, with draws after inspections and a path into 30-year DSCR rental loans.
Yes. We finance construction in San Antonio and across Bexar, Comal, Guadalupe and Kendall counties, and we lend in all 50 states and DC.
Usually property taxes. New homes are taxed on full value with no homestead exemption for investors, which raises the payment and lowers the ratio.
Yes, when the project meets the added site rules for recharge and contributing zones. Include those requirements in your plans and budget.
Yes, but plan for design review by the city's historic preservation office, which adds time.
After an inspector confirms each stage, the draw for that stage is released.
Yes. Spec and build-to-rent homes in Schertz, Cibolo, New Braunfels, Boerne and other suburbs fit our one- to eight-unit program.
No. Texas does not have a real estate transfer tax, though title and closing costs still apply.
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