Question 1

How much new-build competition am I underwriting against in the Tri-Cities?

Accepted Answer

A real pipeline, and it moves differently in each county. Benton County permitted 1,012 single-family homes in 2025 and Franklin County 369, and through the first half of 2026 the metro's single-family pace was still running 6.8% ahead of the same period in 2025 (798 units versus 747). The counties diverge underneath that number: Benton's single-family permits rose 10.6% year to date while Franklin's fell 3.5%, so where in the metro you build changes how much competition you are underwriting against. Apartment permits nearly doubled metro-wide over the same stretch (678 units versus 353), which is a supply signal worth knowing if your exit strategy runs toward build-to-rent.

Question 2

Does Washington actually tax construction labor, not just materials?

Accepted Answer

Yes, and it is a real line item, not a rounding error. Washington charges retail sales tax on construction labor as well as materials, and the local rate depends on which city line the lot sits inside: Pasco 8.9%, Kennewick 8.8%, Richland 8.8%, West Richland 8.7%, Benton City 8.7%, Connell 8.3%, and unincorporated Benton or Franklin County 8.1%. On a $500,000 construction budget, the spread between a Pasco lot and an unincorporated county lot is about $4,000 in sales tax alone.

Question 3

What's a sane hard-cost benchmark before I lock a Tri-Cities spec-build budget?

Accepted Answer

Use the 2025 declared construction value per permit as a sanity check, not a bid. Benton County single-family permits averaged $323,531 in declared construction value per unit in 2025, and Franklin County averaged $317,031. Both figures exclude land and reflect what builders declared to pull the permit, so treat them as a sanity check against your own contractor bid, not as a cost estimate for your specific plan.

Question 4

What building code am I building to, and how long will permitting take in the Tri-Cities?

Accepted Answer

Kennewick publishes the code editions, but no city in this metro publishes a timeline. Kennewick's Building Safety page lists the adopted 2021 IBC, IRC, IMC, IFGC, IEBC, Washington State Energy Code and UPC, plus the 1996 Uniform Housing Code. No published permit-fee schedule or plan-review turnaround target was found for Kennewick, Pasco, Richland or West Richland, so do not build a draw schedule around an assumed number of weeks. Confirm current review times directly with the city before you set your carry budget.

Question 5

If my lot sits inside the Kennewick Irrigation District, does that change how I plan the build?

Accepted Answer

Yes, treat it as its own lien, separate from the property tax bill. The Kennewick Irrigation District bills an annual assessment by parcel size, running $30 to $1,320 a year depending on tier, plus a $78.60 capital upgrade charge and a New Water Infrastructure charge of $5.92 per parcel and $5.92 per irrigable acre for 2026. Under RCW 87.03.265 that assessment is a lien "paramount and superior" to any mortgage, so it sits ahead of your construction loan. Verify the KID account status before you close on the lot, and escrow for it through the build the same way you would for taxes.

Question 6

Does it matter where I sell the finished spec home for the exit tax?

Accepted Answer

By a quarter point, and only in one direction. Local real estate excise tax runs 0.50% in Kennewick, Richland, West Richland, Pasco, Prosser, Benton City and Connell, and 0.50% in unincorporated Franklin County, but only 0.25% in unincorporated Benton County. That local rate stacks on top of Washington's graduated state REET. Building on unincorporated Benton County land is the one place in this metro where the exit tax runs a quarter point lower than the rest.

Question 7

How much of a Tri-Cities build do I have to fund myself?

Accepted Answer

Plan on about 15% of total cost. We lend up to 85% of cost and up to 70% LTV, whichever binds first. On a $500,000 build cost that is $425,000 from us and $75,000 from you (500,000 x 85% = 425,000), drawn against the build schedule on a 12 to 24 month term. Remember that Washington's sales tax on construction labor and materials sits inside that cost, so a Pasco lot and an unincorporated county lot do not carry the same budget. Subject to underwriting.

Question 8

I have not built spec before. Can I still get a Tri-Cities construction loan?

Accepted Answer

Yes, though your track record moves your leverage. Experienced builders can access higher leverage inside the up-to-70% LTV and up-to-85% LTC caps, so a first build usually prices to the conservative end of that range. Bring your builder, your bid and your plan set. Since no published plan-review turnaround was found for any city in this metro, do not set a draw schedule around an assumed number of weeks, and confirm current review times with the city. Subject to underwriting.

Question 9

Does my credit score gate a Tri-Cities construction loan?

Accepted Answer

No. There is no minimum score on this program. We run credit, but on an asset-based construction loan it carries far less weight than it would at a bank, and weaker credit is usually offset with lower leverage rather than a decline. There is no hard credit pull to start, and we qualify off the project and the equity rather than W-2s or pay stubs. Subject to underwriting.

Ground-Up Construction in Tri-Cities

How it works

Run your Ground-Up Construction numbers.

Ground-Up Construction in Tri-Cities, answered.

More Ground-Up Construction questions, answered on the program page

Guides for Ground-Up Construction

Other programs in Tri-Cities

Funding Tri-Cities deals fast.