Burlington needs housing, and most of the land left to build on is small infill lots between older houses. Vermont's recent zoning changes have made duplexes and small multi-unit buildings easier to permit on those lots, which is where most investor construction here happens.
In short: LendingStreet finances ground-up construction of 1-8 unit investment properties in Burlington and Chittenden County, including infill duplexes and fourplexes, build-to-rent homes, spec homes 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, a realistic budget and builder experience drive approval.
Inside Burlington, most projects are infill: a duplex or triplex on a lot where an old garage stood, a small building replacing a tired house, or new units behind an existing home. In Winooski, South Burlington, Essex Junction and Colchester, there is more room for new townhome-style duplexes and small buildings near transit and jobs. Further out, Williston, Milton and Hinesburg see spec single-family homes.
Rental demand for new units comes from hospital staff, university employees and young professionals who struggle to find housing in the city. Newer, efficient units with in-unit laundry and good heat tend to lease quickly.
| Location | Common project | Notes |
|---|---|---|
| Burlington neighborhoods | Infill duplex, triplex, small building | Tight lots, neighbors, zoning review |
| Winooski, South Burlington | Duplexes and small multi-units | Growth areas near jobs and transit |
| Essex Junction, Colchester | Townhome-style rentals | Town permitting |
| Williston, Milton, Hinesburg | Spec single-family | Larger lots, longer commutes |
Vermont's 2023 HOME Act requires towns with water and sewer to allow duplexes where single-family homes are allowed and eases rules for small multi-unit buildings in areas served by water and sewer. Burlington has also updated its own zoning to allow more housing. These changes make small infill projects more feasible, but each lot still has to meet setbacks, height, parking and design standards.
Larger subdivisions and housing developments can trigger review under Act 250, Vermont's land use law. Most 1-8 unit infill projects in Burlington go through local permitting, but confirm whether your project and any related projects nearby cross a state review threshold.
Construction costs in Vermont are high, and skilled trades are in demand. Winters shorten the season for site work and foundations. Most builders aim to dig and pour from late spring through fall, then close in the building and finish inside over winter. Build weather time and cost increases into the budget, and get fixed prices where you can.
Material deliveries and crane or equipment access on narrow Burlington streets can also add cost and time. Plan staging on tight lots, and check whether the city requires permits for street or sidewalk use during construction.
This example is illustrative and not a quote. An investor builds a side-by-side duplex on an infill lot in Burlington. The lot costs $215,000, hard costs are $640,000, and soft costs for design, engineering, permits, utility connections and fees are $72,000. Total project cost is $927,000.
At 75% loan-to-cost the loan is $695,250, and the investor's equity is $231,750. Hard-cost funds are released through the draws below after inspections, and interest is paid only on funds drawn.
Each draw request should match completed, inspected work. Keep lien waivers and invoices organized, since title is updated before each draw. Soft costs like design and engineering are often paid early, so make sure your equity covers them before the first hard-cost draw.
Our draw schedule calculator can help you lay out stages and amounts that fit your builder's schedule.
| Draw stage | Share of hard costs | Amount |
|---|---|---|
| Site work and foundation | 18% | $115,200 |
| Framing, roof and windows | 32% | $204,800 |
| Mechanicals, insulation, drywall | 28% | $179,200 |
| Finishes and final | 22% | $140,800 |
Burlington's permitting and zoning offices review site plans, building plans and design. Infill projects often need neighbor notice and can face appeals. Stormwater rules, tree protection and utility capacity can all add steps. We need approved plans and permits, or a clear path to them, before funding; projects without them usually do not qualify.
Utility connections and impact fees vary between Burlington and the surrounding towns. Get written estimates early, since water, sewer and electric service upgrades on infill lots can be more expensive than expected.
We look at who is building. A borrower with completed projects is the strongest case. A newer investor can qualify with an experienced general contractor on a clear contract. A borrower with no build track record and no experienced general contractor usually does not qualify. In Chittenden County, a builder's schedule and references carry real weight given how busy the trades are.
We also review the budget line by line. Contingency, energy code testing, utility upgrades, stormwater work and site restoration are easy to underestimate in Burlington. A budget that names them shows the builder has done this before.
Vermont's residential energy code is strict, and new rentals here are expected to be well insulated and efficient. Heat pumps, good air sealing and efficient windows raise costs but lower tenant utility bills and help the building rent. Include energy code compliance and any required testing in your budget.
Ask your designer about required energy testing early so it is scheduled before final inspection.
If you keep the building, a DSCR loan can refinance the construction loan once the units are leased, using the combined rent and the full payment at the non-homestead tax rate. If you plan to sell, confirm how similar new units have sold, since buyers for new duplexes in Burlington include both investors and owner-occupants.
Neighbors on tight Burlington lots pay attention to construction. A clear schedule, a clean site and good communication help avoid complaints that can slow inspections or lead to appeals of later projects.
Send plans, budget, lot details and builder information through the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. Use our draw schedule calculator to map the build, and see our Vermont construction page for statewide notes.
Often, yes. Vermont's HOME Act requires towns with water and sewer to allow duplexes where single-family homes are allowed, but each lot must meet local standards.
Most small infill projects go through local permitting, but larger developments can trigger Act 250 review. Confirm early.
On loan-to-cost: land, hard costs and soft costs added together. Terms are set per project.
Through draws after inspections. You pay interest only on drawn funds.
We need approved plans and permits, or a clear path to them. Projects without them usually do not qualify.
Possibly, with an experienced general contractor on a solid contract. Without a track record or an experienced builder, the project usually does not qualify.
Yes. New buildings up to eight units fit our residential construction program.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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