Philadelphia Rental Investors Don't Always Need Traditional Income-Based Financing
DSCR financing gives investors another way to qualify for long-term rental financing by focusing on the income produced by the investment property.
Qualify by Rental Income
The property's cash flow is central to the qualification process, making DSCR financing useful for investors building or expanding a rental portfolio.
30-Year Rental Financing
Long-term financing can help investors structure rental properties for predictable ownership rather than relying exclusively on short-term debt.
Purchase or Refinance
Use DSCR financing when acquiring a qualifying Philadelphia rental or refinancing an existing investment property.
Investor-Friendly Structure
Borrowers can close in an eligible LLC or corporation, subject to program guidelines, making the program suitable for many established investors.
Philadelphia's Rental Housing Stock Fits the Strategy — When the Property Meets the Guidelines
Philadelphia has everything from traditional single-family rentals to rowhomes and smaller multifamily properties. Our DSCR program is designed for qualifying non-owner-occupied 1–4 unit residential investment properties.
Eligible property types can include single-family homes, 2–4 unit multifamily properties, warrantable condos, townhomes and PUDs.
Common Eligible Property Types
The Numbers That Matter
If you're evaluating a Philadelphia rental property, these are the core program benchmarks to understand before you submit the deal.
*Maximum LTV varies by credit score, transaction type and applicable program guidelines.
Buying a Philadelphia Rental?
DSCR financing can be a strong fit when you're acquiring a rental property and want the property's projected rental income to play a central role in qualification.
- 1–4 unit investment properties
- Non-owner occupied
- 660+ mid FICO
- 1.05+ DSCR
- 30-year financing
- LLC or corporation ownership permitted
Already Own the Property?
A qualifying Philadelphia rental can also be considered for rate-term or cash-out refinancing, subject to seasoning, equity, property and underwriting requirements.
Your Credit Profile Can Change the Maximum LTV
Stronger credit can provide access to higher leverage. The following matrix shows the standard maximum LTV by transaction type and mid FICO.
| Mid FICO | Purchase | Rate-Term | Cash-Out |
|---|---|---|---|
| 700+ | 80% | 80% | 75% |
| 680–699 | 75% | 75% | 70% |
| 660–679 | 65% | 65% | 60% |
Final leverage is subject to property eligibility, underwriting and applicable program guidelines.
A Strong DSCR File Starts With the Property
Have the basic property, borrower and transaction information ready so underwriting can evaluate the deal efficiently.
Property
Address, property type, unit count, purchase price or current value, estimated rent and occupancy information.
Borrower
Borrower information, mid FICO, entity structure and required identification and documentation.
Rental Income
Existing leases or applicable rental documentation help establish the income used in evaluating the property's DSCR.
Transaction
Purchase, rate-term refinance or cash-out refinance, along with the requested loan amount and available funds.
Reserves
Purchase transactions require the first three months of PITI paid at closing. Refinance reserve requirements vary by transaction.
Property Eligibility
The property must satisfy the program's residential, size, location, condition and eligibility requirements.
One Philadelphia Rental Market — Many Different Investment Strategies
Philadelphia investors may be evaluating rowhomes, single-family rentals, duplexes, triplexes and four-unit properties depending on the neighborhood and investment strategy.
Whether you're targeting established rental demand or looking for your next acquisition opportunity, the financing needs to match the property and the numbers. That's where DSCR underwriting can make sense for qualifying long-term rentals.
Areas Philadelphia Investors May Be Evaluating
How Philadelphia Investors Can Structure DSCR Deals
The best way to understand DSCR financing is to see how it can work on different types of Philadelphia rental properties. The examples below are illustrative scenarios designed to show possible financing structures, not representations of specific closed transactions.
Neighborhood Matters When You're Buying a Philadelphia Rental
Philadelphia is not one uniform rental market. Property type, tenant profile, rents, purchase price and investment strategy can vary substantially from one neighborhood to another.
Fishtown
Investors evaluating Fishtown may encounter a mix of renovated residential properties, rowhomes and smaller multifamily opportunities.
Northern Liberties
A neighborhood where investors may encounter a combination of residential rentals and newer or renovated housing stock.
South Philadelphia
South Philadelphia offers a broad range of residential properties and neighborhood-level rental strategies for local investors.
University City
Rental demand associated with the area's major institutions can make property selection and tenant strategy particularly important.
West Philadelphia
Investors may find a wide range of residential property types and acquisition opportunities across West Philadelphia.
Northeast Philadelphia
Single-family and smaller residential properties can provide different rental strategies than Philadelphia's denser central neighborhoods.
Not Every Philadelphia Property Needs the Same Loan
A stabilized rental is a different financing opportunity from a property that needs substantial renovation. The first question should always be: what are you actually trying to do with the property?
If you're buying or refinancing a qualifying turnkey rental, DSCR financing may be the appropriate long-term structure. If the property needs another type of financing, we have additional programs to consider.
A Philadelphia DSCR Deal Should Have a Clear Path to Closing
The fastest transactions are usually the ones where the property, borrower and documentation are ready from the beginning.
Submit the Deal
Provide the property, transaction and borrower information.
Evaluate the Property
Review property eligibility, rental income and leverage.
Underwriting
Complete the documentation and underwriting requirements.
Close
Qualified transactions can target a fast closing once requirements are satisfied.
Questions Philadelphia Rental Investors Ask
What credit score do I need for a Philadelphia DSCR loan?
The minimum mid FICO is 660. Higher credit scores may qualify for higher maximum LTV depending on the transaction.
Can I buy a Philadelphia rowhome with a DSCR loan?
A qualifying residential rowhome may be eligible when it meets the applicable property and underwriting requirements.
Can I use an LLC to buy a Philadelphia rental?
Yes. Eligible borrowers can use an LLC or corporation, subject to program requirements.
Can I refinance an existing Philadelphia rental?
Yes. Rate-term and cash-out refinance options are available for qualifying properties, subject to seasoning, equity and underwriting requirements.
How quickly can a Philadelphia DSCR loan close?
Qualified transactions can target closings in approximately 14 days, although actual timing depends on the property, appraisal, title, documentation and underwriting.
What if my Philadelphia rental does not qualify for DSCR financing?
You may want to consider our No-DSCR Rental Loan program for eligible 1–4 unit investment properties.
Have a Philadelphia Rental Deal?
Let's look at the property, rental income and financing structure and determine whether our Philadelphia DSCR program fits the deal.