Scranton sits in the heart of Pennsylvania's anthracite coal region, and that history is underground. Mine subsidence, steep hillside lots and older housing stock make northeast Pennsylvania construction different from building in a typical suburb.
In short: Yes. LendingStreet offers ground-up construction loans for spec homes, build-to-rent houses and small 2-8 unit buildings around Scranton, sized on total project cost and funded in stages as work passes inspection. Typical projects include spec homes in Clarks Summit and the Abingtons, infill duplexes in Scranton's Hill Section and Green Ridge, and build-to-rent homes along the I-81 corridor. Every loan is a business-purpose loan on non-owner-occupied property, with an exit by sale or refinance into a DSCR rental loan.
In Scranton, the Hill Section near the University of Scranton and Marywood University, Green Ridge, the West Side and South Side have occasional infill lots where a new single-family home or side-by-side duplex can replace a vacant or demolished house. The city's older housing stock includes many double-block homes, so new construction stands out to tenants.
North of the city, Clarks Summit and the Abington area draw buyers for schools, and spec homes sell there. Dunmore, Dickson City and Moosic sit along the I-81 and I-476 corridors, where warehouse and distribution growth has added renters. Wilkes-Barre and the Wyoming Valley to the south offer similar lots at different prices.
| Project type | Where it tends to fit | Local issues to check |
|---|---|---|
| Infill single-family and duplex | Hill Section, Green Ridge, West Side | Mine subsidence, steep lots, demolition |
| Spec homes | Clarks Summit, the Abingtons | Resale comparables, well and septic on some lots |
| Build-to-rent houses | Dunmore, Dickson City, Moosic | Rent versus cost, utility service |
Pennsylvania's Uniform Construction Code applies statewide, and Scranton, the boroughs and townships each enforce it through their own code offices or third-party inspection agencies. Zoning is local, and many small municipalities in the valley each have their own zoning hearing board.
Lackawanna County had relied on very old base-year assessments for decades and has been working through a countywide reassessment. Ask the assessment office how a new home will be valued and taxed, because the answer affects your exit DSCR.
This example is illustrative and not a quote. An investor builds a side-by-side duplex on an infill lot in Green Ridge. Land costs $25,000, the hard-cost budget is $300,000 and soft costs such as plans, permits, fees and builder's risk insurance are $28,000, for a total project cost of $353,000. If the project is sized at 80% of total cost, the construction loan is $282,400 and the investor brings $70,600 in cash or land equity.
At completion the property appraises at $390,000 and leases as two 3-bedroom units at $1,350 each, for $2,700 a month. A DSCR refinance at 75% LTV is $292,500, enough to pay off the $282,400 construction loan with about $10,100 left over before closing costs. Estimated principal and interest on a 30-year loan is about $1,995; with taxes of $420 and insurance of $150 a month, the payment is about $2,565 and the DSCR is about 1.05x.
That clears the 1.0x standard minimum. Interest during construction and closing costs are not shown, and your numbers will differ.
| Item | Amount |
|---|---|
| Land | $25,000 |
| Hard costs | $300,000 |
| Soft costs | $28,000 |
| Total project cost | $353,000 |
| Construction loan at 80% LTC | $282,400 |
| Completed value | $390,000 |
| DSCR refinance at 75% LTV | $292,500 |
| Estimated principal and interest | $1,995 |
| Taxes and insurance | $570 |
| Monthly rent | $2,700 |
| DSCR | About 1.05x |
Much of the valley was mined underground, and subsidence can damage foundations. Pennsylvania runs a state Mine Subsidence Insurance program for homes in mining areas, and many owners carry it. Steep streets and hillside lots add grading and retaining costs, and winter limits foundation work.
We size new construction on loan-to-cost, not on today's value of a vacant lot. Total cost means the land, the hard-cost budget and the soft costs: architecture, engineering, permits, impact or tap fees and builder's risk insurance. The share we lend and the terms are set per project.
Equity can come from cash or from land you already own. A realistic completed value, supported by nearby new-construction sales or rents, matters as much as the cost line.
Construction money is paid out in stages. You or your builder request a draw, an inspector verifies the completed work against the budget line items, and the funds are released. Common milestones are site work and foundation, framing, dry-in, mechanical rough-ins, drywall and final.
Because interest generally accrues only on drawn funds, a well-planned schedule keeps carrying costs down. Use our construction draw schedule calculator to test the timing.
Pennsylvania taxes property at the county, municipal and school district levels, and school taxes are often the largest piece. Homestead exclusions only apply to a primary residence, so a finished rental pays the full bill on its assessed value.
Pennsylvania's realty transfer tax includes a state share and a local share, and some municipalities in the region charge higher local rates. Buyers and sellers commonly split it, so check your land contract and budget for it.
A complete package gets a faster answer. Projects without plans or permits, or a borrower with no build track record and no experienced general contractor, usually do not qualify.
LendingStreet works with investors and builders throughout Lackawanna, Luzerne and Wayne counties. Share the lot, the plans, the line-item budget and who is building it, and we will come back with how we would size the loan and structure the draws. Our Pennsylvania construction loans page covers statewide rules. Call (877) 298-1001 or fill out the form below.
It is a state-run Pennsylvania program that covers damage from underground mine collapse in mining areas. Many Scranton-area homes carry it, and the premium is modest compared with the risk.
Yes. New two-, three- and four-family buildings and small 5-8 unit buildings are residential construction under our program with plans, permits and an experienced builder.
Ask the county assessment office. The county has been working through a reassessment, and how new construction is valued affects your taxes and DSCR.
Yes. We finance 1-8 unit ground-up projects across Lackawanna, Luzerne and nearby counties.
Through a draw schedule. After each stage of work, an inspection confirms progress and the matching funds are released.
Yes. Buildings with 5 to 8 units are residential construction under our program, though they get closer review. Nine or more units is commercial.
Plan for it. A contingency line helps, and overruns beyond the budget are generally covered by the borrower, so keep reserves.
Yes, land you own can count toward your equity in the project. Bring the deed, any existing loan payoff and the plans, and we will size the loan on total cost.
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