Baltimore is a rowhouse city, and many blocks have vacant lots or homes too far gone to save. A new rowhouse on an infill lot, built to match the block, is one of the most common small ground-up projects here.
In short: LendingStreet finances ground-up construction in Baltimore for investors building 1 to 8 units, including new rowhouses, infill single-family homes, duplexes and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through inspected draws. Party walls, title items like ground rent and Maryland's closing taxes are the local issues to plan for.
New rowhouse and infill projects appear in Remington, Hampden edges, Station North, Greenmount West, Reservoir Hill, Union Square, Patterson Park edges and areas near Johns Hopkins. Demand comes from hospital, university and downtown workers.
The city has programs for selling vacant city-owned lots and homes, which can lower land costs but come with their own timelines and requirements.
Baltimore values vary sharply by block. A new rowhouse can sell well on a stable block and struggle a few streets away, so comparable sales should come from the immediate area. Build-to-rent investors should compare their planned rent with nearby leases on renovated or new homes. Some neighborhoods also have city or nonprofit programs that support new construction, with their own terms and timelines.
Common Baltimore 1-8 unit projects: Each type has its own exit and its own local issues.
| Project type | Where it is common | Local note |
|---|---|---|
| New rowhouse | Remington, Station North, Union Square | Sale or rental exit |
| Two-unit rowhouse | Patterson Park edges, Charles Village | Rental exit into DSCR |
| Small 5-8 unit building | Corridors near Hopkins and downtown | Zoning and parking review |
| Infill single-family | Hamilton, Lauraville | Sale exit |
Permits run through the city's Department of Housing and Community Development, with zoning under the city's zoning code. Historic districts, including many rowhouse neighborhoods, have design review through the city's historic preservation commission.
Maryland and Baltimore City both levy transfer and recordation taxes, and the city's rates are higher than in many Maryland counties. Get the numbers from your title company before you set the budget.
Some Baltimore projects also qualify for local or state tax credits for new construction or for building in targeted areas. If your numbers depend on one, confirm eligibility and timing before you close, since a missed application can change the budget.
Building between existing rowhouses means shared or adjacent walls, protection for neighbors and careful demolition. Some Baltimore properties still carry ground rent, a historic arrangement where the land is leased, so the title search should confirm whether one exists. Old water and sewer lines often need replacement.
Three things drive the loan: the total project cost, the loan-to-cost percentage set for your project, and the finished value. Terms are set per project after we review plans, budget, permits and the builder.
Your equity covers the gap between the loan and total cost. On Baltimore projects, soft costs and site work often run higher than investors expect, so a complete budget gives you a more accurate loan amount from the start.
This example is illustrative and not a quote. An investor builds a new rowhouse on a vacant lot in Remington to sell on completion. Land costs $45,000, hard costs are $360,000, soft costs are $45,000 and the contingency is $18,000, for a total project cost of $468,000.
At a sample 80% loan-to-cost, the loan is $374,400 and the investor puts $93,600 into the project. Most of the loan funds through draws as work is completed.
If the finished property sells for $525,000 in total and selling costs run about 6%, or $31,500, net proceeds of $493,500 repay the $374,400 loan and leave $119,100 before interest and carrying costs, against $93,600 of cash invested.
| Item | Amount |
|---|---|
| Land | $45,000 |
| Hard construction costs | $360,000 |
| Soft costs (plans, engineering, permits, fees) | $45,000 |
| Contingency | $18,000 |
| Total project cost | $468,000 |
| Loan at a sample 80% LTC | $374,400 |
| Investor cash in the project | $93,600 |
| Sale price | $525,000 |
| Selling costs at about 6% | $31,500 |
| Left after repaying the loan, before interest and carry | $119,100 |
Funds are released through a draw schedule, not in one lump sum. You finish a stage of work, request a draw, an inspector confirms the work in place, and the funds for that stage are released.
Build the schedule around how your Baltimore builder actually sequences the job. Our construction draw schedule calculator can help you map stages to dollars before you apply.
We look for investors with a buildable plan and the team to execute it. Experience can be your own or your general contractor's. Projects without plans or permits, or with no build track record and no experienced general contractor, usually do not qualify.
We also look at the land. Owning the lot, or having it under contract with a clear closing date, along with a survey and any soils work, makes the Baltimore file faster to review and the budget easier to confirm.
Decide the exit before you close. A sale exit should be supported by recent new-build sales nearby. A rental exit should be supported by local rents that can carry a DSCR loan at the 1.0x standard minimum, with sub-1.0 programs available in some cases.
If the finished property needs more time, a short-term bridge loan can sometimes fill the gap before the sale or long-term refinance.
Our investor loans are business-purpose loans on non-owner-occupied property. For your Baltimore project, share plans, budget and land details through the form below, or call (877) 298-1001.
The city sells some vacant lots and homes through its programs. Timelines and requirements vary, so build them into your plan.
It is a historic arrangement where the land under a home is leased. Your title search should confirm whether one exists, and it may need to be resolved before closing.
Yes. Design review can set materials, height and facade details. Confirm the rules before you finalize plans.
Yes. Once leased, it can refinance into a DSCR loan that qualifies on rent, with 30-year terms available.
Usually only with an experienced general contractor on the project. A borrower with no build track record and no experienced GC usually does not qualify.
Loan-to-cost is the loan divided by the total project cost, including land, hard costs, soft costs and contingency. Construction loans are sized this way, with terms set per project.
Yes. Small 5-8 unit buildings are part of our residential construction program. Buildings of 9 or more units are commercial.
Draws are tied to the approved budget, so overruns beyond the contingency generally have to be covered by the borrower. A realistic budget and contingency protect the project.
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