Greater Bangor needs newer rental housing. Most of the stock is decades or centuries old, and tenants who work at the hospitals or the university will pay for a unit that is tight, efficient and warm. Building one here means planning around a short season and deep frost.
In short: LendingStreet finances ground-up construction of 1-8 unit investment properties in Bangor and nearby towns, including spec homes, build-to-rent houses, duplexes, fourplexes and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through a draw schedule after inspections. Plans, permits, budget and builder experience drive approval.
Inside Bangor, infill lots on public water and sewer can support duplexes and small multi-unit buildings near the hospitals, Husson University and downtown. Hampden, Hermon and Brewer have room for new single-family and duplex construction with access to Bangor jobs. Glenburn, Holden and Eddington offer larger lots, but many rely on private wells and septic systems.
Near the University of Maine, Orono and Old Town see demand from graduate students, faculty and staff who want something newer than the typical student house.
Demand for new product is steady in part because so little of the region's rental stock is new. Tenants who have spent winters in drafty older apartments notice the difference in a tight new unit with efficient heat, and that difference shows up in rent and in how long tenants stay. For a build-to-rent investor, that supports both the DSCR refinance and long-term occupancy.
Footings in this part of Maine have to go below a deep frost line, and concrete and site work are easiest from spring to late fall. Many builders aim to have the foundation in and the house closed up before winter so interior work can continue. A tight building envelope and efficient heat, often heat pumps with a backup, help both the tenant's bills and the long-term value.
Snow load and roof design also matter. Roofs need to handle Maine's snow, and simple roof lines shed snow and resist ice dams better than complex ones. Many builders favor straightforward designs, generous attic insulation and good ventilation, which also reduces long-term maintenance. Budget for winter conditions too: temporary heat, snow removal on site and protection for materials if work continues into the cold months.
We look for a complete package before sizing the loan:
This example is illustrative and not a quote. An investor builds a side-by-side duplex in Hampden. The lot cost $60,000, hard costs are $430,000 and soft costs for design, permits, utility connections and fees are $40,000, for a total of $530,000.
At 80% of cost the construction loan is $424,000 and the investor's equity, including the lot, is $106,000. At completion each unit leases for $2,100. With the duplex valued at $600,000, a 75% DSCR refinance of $450,000 pays off the construction loan. Estimated principal and interest is about $3,070, taxes and insurance about $940, and the DSCR about 1.05x.
| Draw | Share of hard costs | Amount |
|---|---|---|
| Site work, septic and well or utility connections | 15% | $64,500 |
| Foundation below frost line | 15% | $64,500 |
| Framing, roof and windows | 25% | $107,500 |
| Mechanical, insulation and drywall | 25% | $107,500 |
| Finishes and occupancy | 20% | $86,000 |
Outside the public sewer and water areas, a lot needs a septic design that passes soil tests and a well that delivers enough water. These costs belong in the budget from the start. Ledge is common in parts of Maine and can raise excavation costs, so ask your excavator to look at the site before you lock in a price.
In-town lots on public water and sewer avoid these questions but bring their own costs, such as connection fees and street opening permits. Ask the city or town for a full list of fees before you finalize the budget, and get the utility connection timeline in writing, since a delayed hookup can hold up your certificate of occupancy.
Funds are released after an inspector confirms each stage. Line up the early draws with the season: site work and foundation before the ground freezes, framing and roof before heavy snow. Our construction draw schedule calculator can help you map out stages.
Keep paperwork tight between draws. Lien waivers from subcontractors, updated budgets that show any changes, and photos of completed work make each inspection faster. If a line item runs over, tell us early and show how the contingency or your own funds will cover it, because draws are released against the approved budget, and an unexplained overrun can slow the next payment when your crew is waiting to be paid.
Land with no plans or permits, budgets without line items, and first-time builders without an experienced general contractor usually do not qualify. Lots in mapped flood zones along the Penobscot River or Kenduskeag Stream need careful planning and flood insurance.
A new single-family home in Hampden or Brewer can sell to a local buyer, while a duplex or fourplex is often held and refinanced into a DSCR loan. Maine's transfer tax applies to a sale, split equally between buyer and seller. Whichever exit you choose, base the numbers on recent sales or rents of new construction nearby, not on old housing stock.
For a build-to-rent project, check the rental numbers against what new units actually lease for in the area, not older apartments, and include realistic taxes on the completed value. Maine's homestead exemption does not apply to rentals, so budget the full bill.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the lot address, plans, budget, builder and exit plan through the form below. For other Maine projects, see our Maine construction loan page.
On loan-to-cost, with terms set for each project based on the plans, budget, builder and exit.
Yes, but plan to have the foundation in and the building closed up before winter, and build extra time into the loan term.
Yes, if the septic design and well plan are complete and included in the budget.
Yes, where zoning allows. We finance 1-8 unit residential projects.
Through a draw schedule, after inspections confirm completed work.
Only with an experienced general contractor and a complete plan. Borrowers with no track record and no experienced builder usually do not qualify.
Typically a DSCR refinance once units are leased, qualified on the rent.
Whatever you plan to install should be in the line-item budget. Efficient systems also support rents and value.
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