The Lehigh Valley keeps adding jobs in warehousing, health care and manufacturing, and renters priced out of New Jersey and Philadelphia keep arriving. Housing has not kept up, which is why investors are building.
In short: Yes. LendingStreet finances ground-up construction for 1-8 unit investment property in Allentown, Bethlehem, Easton and the surrounding townships of Lehigh and Northampton counties. The loan is sized on loan-to-cost and funded in inspected draws, with terms set per project. In this region the township approval process and Pennsylvania's transfer taxes often shape the budget as much as the construction itself.
In Allentown proper, most opportunities are infill: vacant lots and teardown sites in the West End, the East Side and parts of the South Side, plus parcels near the downtown Neighborhood Improvement Zone. Rowhomes and twins dominate the housing stock, so new twins and small multi-unit buildings fit the fabric.
The growth townships are where larger lots are: Upper Macungie, Lower Macungie, South Whitehall, Whitehall and Hanover, with Emmaus, Macungie and Northampton for smaller-town projects. Bethlehem and Easton have their own infill markets near Lehigh University, Lafayette College and the riverfronts.
| Area | Common project | Main hurdle |
|---|---|---|
| Allentown West End, East Side | Single-family or twin infill | Lot size and parking rules |
| Allentown South Side, center city | Small 2-4 unit buildings | Zoning relief, older utilities |
| Upper and Lower Macungie, South Whitehall | Spec and build-to-rent homes | Land development review |
| Bethlehem, Easton | Infill near colleges and downtowns | Historic district review |
We look at total project cost, meaning land, hard construction costs and soft costs such as plans, engineering, permits and fees, and size the loan as a share of that figure. That share is set per project.
Funds go out in stages after inspections confirm the work, not as a lump sum. Use the draw schedule calculator to map foundation, framing, rough-ins, drywall and finish against your budget so the cash you bring and the draws line up.
Allentown was built as a dense brick city, and new construction that respects that pattern tends to get approved more easily: attached twins, narrow single-family homes and 3-4 unit buildings on corner lots. In the townships, investors build detached homes and duplexes where zoning allows them.
Demand comes from warehouse and logistics workers along I-78 and Route 22, hospital staff at the region's large health systems and households moving in from New Jersey and New York. Newer rentals with parking and modern systems are scarce compared with the older rowhome stock.
Pennsylvania municipalities regulate land through zoning ordinances and subdivision and land development ordinances (SALDO). Splitting a lot or building more than one unit can trigger planning commission review, stormwater plans and sometimes zoning hearing board relief. That process runs on meeting calendars, so it can take months.
Building permits follow the Pennsylvania Uniform Construction Code, enforced by the municipality or a third-party inspection agency it appoints. Ask early which agency handles your site and what sewer and water capacity letters the township requires.
We fund investors and builders putting up 1 to 8 units in and around Allentown, usually through an LLC, and you sign for the loan personally. Our investor loans are business-purpose loans on non-owner-occupied property.
Expect questions about your last few completed projects, your general contractor's license and insurance, and how the budget was built. Files missing plans or permits, or run by a first-time builder without an experienced GC, generally do not move forward.
Pennsylvania charges a 1% state realty transfer tax, and local municipalities and school districts add their own, so the combined figure on a land purchase is higher than in most states and varies by town. Get the exact figure from your title company before you budget the land.
Counties reassess on their own schedules, often many years apart, so tax bills are calculated against an older base-year value adjusted by the state's common level ratio. A new home is added at an assessed value, and the tax can differ sharply between Allentown and a neighboring township.
This example is illustrative and not a quote. An investor builds a pair of attached three-bedroom twin homes on a single approved lot and holds both as rentals. Land costs $140,000, hard construction costs $560,000 and soft costs $55,000, for a total project cost of $755,000. For illustration the loan covers 75% of cost, or $566,000, and the investor brings $189,000 plus closing costs; actual LTC is set per project.
At completion the appraisal comes in at $780,000, with total rent of $5,600 a month. Refinancing into a DSCR loan at 75% of value gives $585,000, which pays off the $566,000 construction balance. With estimated principal and interest of about $3,991, taxes near $1,150 and insurance near $190, the monthly payment is about $5,331 and the ratio is about 1.05x.
Soft costs here include land development fees, stormwater engineering and utility connections, which can run higher in Pennsylvania townships than investors expect.
| Item | Amount |
|---|---|
| Land | $140,000 |
| Hard costs | $560,000 |
| Soft costs | $55,000 |
| Total project cost | $755,000 |
| Construction loan (75% of cost, illustrative) | $566,000 |
| Investor cash before closing costs | $189,000 |
| Completed value | $780,000 |
| DSCR refinance (75% of value) | $585,000 |
| Monthly rent | $5,600 |
| Estimated principal and interest | $3,991 |
| Taxes and insurance | $1,340 |
| Estimated DSCR | About 1.05x |
New twins and townhomes rent well in the western townships, and a DSCR refinance on the completed rent is the usual exit. Selling one side of a twin is possible if the lot was subdivided properly during approval, which is worth planning from day one.
In Allentown itself, investors usually hold. Finished values for new infill can be limited by nearby rowhome sales, so the refinance math leans on rent.
Send the address, plans, budget and timeline through the form below or call (877) 298-1001. LendingStreet reviews Allentown builds directly and comes back with a term sheet that shows the loan amount, LTC and draw structure.
Often, yes. Splitting a lot or building more than one unit usually goes through the township SALDO process. Budget time for planning commission meetings.
It is negotiable and often split between buyer and seller. The combined state and local rate depends on the municipality, so confirm it with your title company.
The builder completes a stage, an inspection confirms it, and the draw funds. Map your budget to the draw schedule before closing.
Both. City projects are usually infill on smaller lots; township projects have more room but longer approvals.
Simple permits can move in weeks. Projects that need land development review or zoning relief can take several months because they depend on board meeting schedules.
Yes. Once it is complete and leased, a DSCR loan can repay the construction loan, qualifying on rent with a 620 minimum credit score.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Our Pennsylvania construction loans page covers statewide basics and other metros.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.