Growth in the Capital Region has moved north. Semiconductor and tech employers in Saratoga County, along with steady demand in the Albany suburbs, have pushed builders toward Malta, Ballston Spa, Clifton Park and Halfmoon, while vacant city lots in Albany and Troy offer a smaller infill opportunity.
In short: LendingStreet finances ground-up construction of 1-8 unit investor properties across the Capital Region, including spec homes, build-to-rent homes, infill two-families and small 5-8 unit buildings. Loans are sized on loan-to-cost, terms are set per project, and funds are released through a draw schedule after inspections. Plans, permits, a realistic budget and builder experience are what get a project approved.
Each part of the region offers a different kind of project, with a different end buyer or tenant.
Saratoga County has been the region's strongest area for new construction in recent years, driven partly by employers near the Luther Forest Technology Campus in Malta. Builders there compete with production builders, so a spec home needs a clear price advantage or a better lot.
| Area | Typical project | Typical exit |
|---|---|---|
| Saratoga County (Malta, Ballston Spa, Clifton Park, Halfmoon) | Spec homes, build-to-rent duplexes and townhomes | Sale or DSCR refinance |
| Albany County suburbs (Colonie, Guilderland, Bethlehem) | Infill single-family on remaining lots | Sale to families |
| City lots in Albany, Troy, Schenectady | Infill two-family or small multi-unit | DSCR refinance on rent |
| Rensselaer County (East Greenbush, North Greenbush) | Spec homes and small subdivisions | Sale |
This example is illustrative and not a quote. An investor buys a lot for $120,000 and plans a side-by-side duplex with $545,000 of hard costs and $62,000 of soft costs for plans, engineering, permits, water and sewer connections and insurance. Total cost is $727,000.
At 80% of cost the loan is $581,600. The investor contributes about $145,400, often partly through the land. Interest accrues only on funds drawn, and each draw is released after an inspection confirms the stage is done.
The first draw is released only after the foundation stage is inspected, so you will fund early site work from your own cash. Keep lien waivers from subcontractors with each draw request, and expect the final draw to wait for the certificate of occupancy.
Because interest accrues only on funds drawn, carrying cost is low early and highest near completion. Carry a cash cushion for the gap between completion and either a sale or the DSCR refinance.
| Draw | Share of cost | Amount |
|---|---|---|
| Site work and foundation, before frost | 14% | $101,780 |
| Framing, sheathing and roof | 24% | $174,480 |
| Windows, siding and rough systems | 20% | $145,400 |
| Insulation, drywall and heating | 18% | $130,860 |
| Cabinets, finishes and paving | 16% | $116,320 |
| Final inspection and certificate of occupancy | 8% | $58,160 |
Foundations need to go below the frost line, and pouring concrete in freezing weather takes extra measures. Most builders aim to have the foundation in and the house closed up before the ground freezes, then work inside through winter.
Build the season into the schedule and the draw plan. A project that starts in September can lose weeks to weather; one that starts in April usually has the shell done by fall.
Winter also affects inspections and utility work. Utility companies and municipal crews may schedule new service connections around weather, so ask about lead times early and build them into your completion date.
Every town and city has its own building and planning departments. A single lot with existing zoning may need only a building permit, while a new subdivision or a multi-unit project can need planning board review and New York's State Environmental Quality Review (SEQR).
Water and sewer availability vary across the region. Some suburban lots rely on wells and septic systems, which add testing, design and cost.
Some towns in the region have reviewed subdivision rules and growth limits in recent years. Ask the planning office about any pending changes before you buy a lot that depends on approvals.
Older city neighborhoods have scattered vacant lots, some held by county land banks that sell to buyers with a development plan. Building a two-family on one of these lots can fill a real housing need, but you will deal with tight sites, neighbors, utility connections and sometimes historic district review.
Rents for new construction in city neighborhoods need to support the full build cost. Pull rent comparables from newer or fully renovated units, not the older stock next door.
Land bank sales usually come with conditions, such as a deadline to start or finish construction. Make sure your financing and permit timelines fit those terms before you sign.
New York's energy code is strict, and new state rules are pushing new buildings toward all-electric heating and appliances, phasing in over the next several years depending on building size. Confirm with your design team which requirements apply to your project when you file.
Heat pumps, insulation and air sealing cost money up front, but they lower operating costs and help a rental compete.
Insurance during construction is a builder's risk policy, which belongs in soft costs. Confirm it covers winter weather damage and materials stored on site.
We look for builder experience. Borrowers without a build history can sometimes qualify by working with an experienced, licensed general contractor. Projects without plans or permits, or with no experienced builder involved, usually do not qualify.
We also look at your liquidity. Weather, inspections and supply delays push costs up, and you need room to cover overruns without stopping work.
A detailed schedule that accounts for winter gives us more confidence than an optimistic one.
For build-to-rent projects, the exit is a DSCR loan qualified on rent once the property is complete and leased. Plan for rental registration in cities that require it.
Use our draw schedule calculator to plan cash flow. For 5-8 unit permanent financing, see our Albany 5-8 unit page.
Send plans, the budget, lot details and your builder's resume. Call (877) 298-1001 or use the form below. See the New York construction page for statewide context.
Include the expected start date.
On loan-to-cost, which includes land, hard costs and soft costs. Terms are set per project depending on plans, budget, location and experience.
Yes, but aim to have the foundation in and the shell closed before the ground freezes. Winter slows exterior work.
You request funds as stages are completed. An inspector confirms the work, then the draw is released. Interest accrues on funds drawn.
Generally yes, or a clear path to them. Projects without plans or permits usually do not qualify.
Yes, if the lot is approved for the system and the costs are in the budget. Testing and design add time.
Sometimes, if an experienced licensed general contractor runs the project. Without either, it usually does not qualify.
Yes, 5-8 unit residential buildings qualify. Nine or more units is commercial.
New York is phasing in all-electric rules for new buildings. Ask your designer which apply when you file for permits.
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