The Roanoke Valley is ringed by mountains, and that terrain decides many construction budgets here. A flat, utility-served lot is worth paying for; a steep one can eat the margin in grading and retaining walls.
In short: LendingStreet finances ground-up construction on 1-8 unit investment properties in the Roanoke area, with the loan sized on loan-to-cost and funds released through inspected draws. Typical projects include infill homes in Grandin Village, Raleigh Court and Wasena, spec homes in Roanoke County and Botetourt County, and small multi-unit buildings near Carilion's medical campus. Our investor loans are business-purpose loans on non-owner-occupied property, and most projects exit by sale or a refinance into a DSCR loan.
In the city, infill lots in Raleigh Court, Grandin Village, Wasena, South Roanoke, Old Southwest and the Williamson Road corridor can take new single-family homes or duplexes, with demand from Carilion Clinic, Virginia Tech Carilion and downtown employers. Gainsboro and northwest neighborhoods have more vacant lots at lower prices.
Roanoke County's Cave Spring and Hollins areas, Salem and Vinton draw buyers and renters for schools and commutes. Botetourt County to the north, around Daleville, has new subdivisions, and Franklin County near Smith Mountain Lake supports spec homes aimed at second-home buyers.
| Project type | Where it tends to fit | Local issues to check |
|---|---|---|
| Infill single-family and duplex | Raleigh Court, Wasena, Old Southwest, Williamson Road | Historic review in some areas, steep lots |
| Spec homes | Cave Spring, Daleville, Salem | Slope, grading, resale comparables |
| Small multi-unit | Near the Carilion medical campus | Zoning, parking, site plan review |
Virginia's independent cities are separate from the counties, so the City of Roanoke, Roanoke County, Salem and Botetourt County each have their own zoning, permits and fees. Roanoke has local historic districts, including parts of Old Southwest, where new construction needs design approval.
Virginia's erosion and sediment control law requires a land disturbance permit and plan once grading crosses a set threshold, and many valley lots reach it quickly because of slope. Ask the jurisdiction which plans and bonds apply before you price site work.
Steep lots, shallow rock and limestone geology in parts of the valley can add excavation, retaining walls and drainage work. The Roanoke River and its tributaries have flooded in the past, so check flood maps for low-lying parcels. Winter weather is milder than farther north but still needs frost-depth footings.
Ground-up loans are sized on loan-to-cost (LTC): the loan is a share of the total project cost, which includes land, hard construction costs and soft costs such as plans, engineering, permits and fees. The exact LTC and terms are set per project, based on the plans, the budget, the location and the builder's record.
The appraiser also estimates the completed value. A project where the finished value comfortably exceeds the total cost gives everyone room if the budget runs over or the market softens.
This example is illustrative and not a quote. An investor builds a duplex on an infill lot in Wasena. Land costs $55,000, the hard-cost budget is $330,000 and soft costs such as plans, permits, fees and builder's risk insurance are $32,000, for a total project cost of $417,000. If the project is sized at 80% of total cost, the construction loan is $333,600 and the investor brings $83,400 in cash or land equity.
At completion the property appraises at $470,000 and leases as two 2-bedroom units at $1,550 each, for $3,100 a month. A DSCR refinance at 75% LTV is $352,500, enough to pay off the $333,600 construction loan with about $18,900 left over before closing costs. Estimated principal and interest on a 30-year loan is about $2,405; with taxes of $440 and insurance of $130 a month, the payment is about $2,975 and the DSCR is about 1.04x.
That clears the 1.0x standard minimum. Interest during construction and closing costs are not shown, and your numbers will differ.
| Item | Amount |
|---|---|
| Land | $55,000 |
| Hard costs | $330,000 |
| Soft costs | $32,000 |
| Total project cost | $417,000 |
| Construction loan at 80% LTC | $333,600 |
| Completed value | $470,000 |
| DSCR refinance at 75% LTV | $352,500 |
| Estimated principal and interest | $2,405 |
| Taxes and insurance | $570 |
| Monthly rent | $3,100 |
| DSCR | About 1.04x |
The loan is not handed over in one piece. After closing, construction funds are released through a draw schedule tied to milestones like foundation, framing, roof and windows, rough-ins and final completion. Each request is checked by an inspection before money goes out.
Subcontractors usually need to be paid before a draw lands, so keep working capital on hand. Map the timing with our construction draw schedule calculator.
Virginia localities assess real estate at 100% of fair market value, and the City of Roanoke reassesses every year, so a finished rental's value is picked up quickly. Rates differ between the city and the counties, so compare the tax line by jurisdiction when you choose a lot.
Virginia charges recordation tax on deeds and on deeds of trust, so the construction loan and the later DSCR refinance both carry it. Ask your settlement agent for estimates.
Gather these first. A borrower with no completed builds and no experienced general contractor, or a project with no plans or path to permits, usually does not qualify.
We finance business-purpose construction on non-owner-occupied 1-8 unit properties across the City of Roanoke, Roanoke County, Salem, Botetourt County and Franklin County. Send the address, plans, budget, builder details and your exit plan, and we will review the LTC, the draw schedule and the completed value. For statewide context, see our Virginia construction loans page. Call (877) 298-1001 or use the form below to get a quote.
Grading, rock removal, retaining walls and drainage add cost, and larger disturbance can trigger a land disturbance permit. Get a site plan before you finalize the budget.
Yes. Spec and build-to-rent homes in Daleville and across Botetourt and Roanoke counties fit our ground-up program with plans, permits and an experienced builder.
Often, but local historic district rules require design approval for new construction. Plan for that review before you commit to a schedule.
The City of Roanoke reassesses annually at fair market value, so expect taxes on the completed value soon after the home is finished.
Experience matters. A borrower with completed builds, or one working with an experienced licensed general contractor, is in a much stronger position. Projects with no build track record on the team usually do not qualify.
Most investors refinance the finished, leased property into a long-term DSCR loan that qualifies on rent, with no W-2s or tax returns. Seasoning rules vary by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property. We do not finance a home you or your family will occupy.
Often soon after completion and lease-up, but seasoning rules for a DSCR refinance vary by program. Plan the timing with us before you start the build.
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