Toledo's older rental stock is aging, and the city's lead-safe rental rules have raised the cost of keeping pre-1978 houses in service. New construction sidesteps that, but it has to compete with low resale prices, so location matters.
In short: LendingStreet lends on new 1-8 unit investor construction in and around Toledo. Loans are sized on loan-to-cost, terms are set project by project, and money is released through a draw schedule after inspections. Typical projects include spec homes in Perrysburg, Sylvania and Maumee, build-to-rent homes in Holland and Oregon, and infill duplexes near the University of Toledo and downtown. Our investor loans are business-purpose loans on non-owner-occupied property.
The suburbs carry most new construction. Perrysburg and Rossford in Wood County, and Sylvania, Maumee, Holland, Waterville and Whitehouse in Lucas County, draw buyers and renters for schools and newer homes. Bowling Green, home to Bowling Green State University, adds student demand to the south.
In Toledo itself, neighborhoods near the University of Toledo such as Old Orchard, the Westgate area and parts of South Toledo can support new homes, and the Lucas County Land Bank sells vacant lots for infill in many neighborhoods. The Old West End is a historic district where new building faces design review.
| Project type | Where it tends to fit | Local issues to check |
|---|---|---|
| Spec homes | Perrysburg, Sylvania, Maumee, Waterville | Resale comparables, school district |
| Build-to-rent houses | Holland, Oregon, Rossford | Rent versus total cost, taxes |
| Infill single-family and duplex | Near the University of Toledo, land bank lots | Appraisal support, lot conditions |
Toledo issues building permits and enforces zoning inside city limits, and each suburb and township has its own office. Lots bought from the Lucas County Land Bank can be inexpensive but may come with build deadlines or design requirements.
Toledo's lead-safe rental ordinance requires many pre-1978 rental units to pass a lead-safe inspection. New construction is not affected, which is one reason some investors build rather than renovate. Confirm current rental registration rules with the city before leasing.
Northwest Ohio's flat terrain and clay soils can hold water, so drainage and foundation waterproofing matter. Areas near the Maumee River and Lake Erie shoreline carry flood risk. Winter limits foundation work, and frost-depth footings and basements or crawl spaces are standard.
Construction loans are based on loan-to-cost (LTC). Add the land, the hard construction budget and the soft costs such as plans, permits and fees, and the loan is a share of that total, with terms set per project.
Three things move the number: a detailed, line-item budget; a builder or general contractor with a track record on similar homes; and an after-completion value that leaves a cushion over total cost.
This example is illustrative and not a quote. An investor builds a 3-bedroom build-to-rent home in Holland. Land costs $35,000, the hard-cost budget is $270,000 and soft costs such as plans, permits, fees and builder's risk insurance are $25,000, for a total project cost of $330,000. If the project is sized at 80% of total cost, the construction loan is $264,000 and the investor brings $66,000 in cash or land equity.
At completion the property appraises at $365,000 and leases as one 3-bedroom ranch with an attached garage, for $2,450 a month. Because Ohio taxes and school levies take a meaningful share of the rent, the investor plans the DSCR refinance at 70% LTV instead of the 75% maximum. That loan is $255,500, so the investor pays down about $8,500 of the $264,000 construction loan with cash and leaves more equity in the property. Estimated principal and interest on a 30-year loan is about $1,743; with taxes of $480 and insurance of $120 a month, the payment is about $2,343 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 | $35,000 |
| Hard costs | $270,000 |
| Soft costs | $25,000 |
| Total project cost | $330,000 |
| Construction loan at 80% LTC | $264,000 |
| Completed value | $365,000 |
| DSCR refinance at 70% LTV | $255,500 |
| Estimated principal and interest | $1,743 |
| Taxes and insurance | $600 |
| Monthly rent | $2,450 |
| DSCR | About 1.05x |
Funds for land are typically advanced at closing, and construction money is released in draws as work is completed. Before each draw, an inspector confirms progress against the budget, such as foundation, framing, dry-in, mechanicals and finishes. Interest is generally charged on funds drawn, not on the full commitment.
Build a draw schedule before you close so you know how much cash you need between draws. Our construction draw schedule calculator can help you map it out.
Ohio assesses property at a 35% assessment ratio, meaning taxable value is 35% of appraised value, and counties reappraise every six years with an update at the midpoint. Rentals do not receive the owner-occupancy credit, so a finished rental pays the full rate, and school levies vary widely between districts.
Ohio counties charge a conveyance fee on deed transfers, commonly paid by the seller. Budget title and recording costs on the land and the DSCR refinance.
These items let us size the loan and set the draw schedule. Without plans, permits or an experienced builder on the team, a project is usually not ready for a construction loan.
Our construction loans are business-purpose loans on non-owner-occupied 1-8 unit projects in Lucas and Wood counties. Tell us about the project, including land, plans, budget, builder and exit, and the team will review it and outline terms. You can also read our Ohio construction loans page. Get a quote with the form below or call (877) 298-1001.
No. It applies to older rental units built before 1978. New homes avoid that inspection, though you should confirm current rental registration rules.
Yes, in many cases. Land bank lots can carry build deadlines or design rules. Share the purchase terms so we can plan the schedule.
Loan-to-cost (LTC) is the loan amount divided by total project cost, including land, hard costs and soft costs. Construction loans are sized on LTC, with terms set per project.
Yes. Exits are by sale or refinance. Spec builders usually sell, while build-to-rent investors usually refinance into a DSCR loan.
Yes. Spec and build-to-rent homes in Perrysburg, Sylvania, Maumee and across Lucas and Wood counties fit our program with plans, permits and an experienced builder.
At a 35% assessment ratio of appraised value times local millage, without the owner-occupancy credit. Use the completed value in your estimate.
Plans and permits, or a clear path to them, are expected. Projects without plans or permits usually do not qualify.
Terms are set per project, based on the size of the build and the schedule. Short-term, interest-only financing during the build is typical, followed by a sale or a DSCR refinance.
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