Philadelphia's rental market is built on rowhomes and converted multi-unit buildings, and many investors have spent years renovating them neighborhood by neighborhood. A DSCR cash-out refinance lets you pull equity out of those properties based on rent, but Philadelphia's licensing and lead rules need to be in order first.
In short: Yes. LendingStreet finances DSCR cash-out refinances on Philadelphia-area rentals up to 75% LTV, qualifying on the property's rent with no tax returns or W-2s. The rent must cover principal, interest, taxes and insurance at the 1.0x standard minimum. Loans start at $150,000, LLC borrowers are standard and the minimum credit score is 620. Expect to show a current rental license and, for older buildings, lead-safe certification.
Philadelphia values have climbed steadily rather than spiking, with the strongest gains in neighborhoods near Center City and along transit lines. Fishtown, Kensington, Grays Ferry, Graduate Hospital, Brewerytown and Passyunk have seen heavy renovation and new construction, while Germantown, Frankford, Mayfair and parts of West and Southwest Philadelphia offer lower prices and stronger rent relative to value.
Because many Philadelphia rowhomes sell below $200,000, the $150,000 minimum loan amount matters. Renovated rowhomes, duplexes and small multifamily in stronger neighborhoods are the most common fit for a cash-out. Investors with several lower-value rowhomes sometimes combine them into one blanket loan so the total balance clears the minimum and one payment covers the group.
Philadelphia requires landlords to hold a rental license for each rental property, along with the business tax accounts the city requires. Underwriting may ask for the license, and an unlicensed rental can create problems with tenants and the city, including limits on collecting rent or pursuing an eviction. Renewals are annual, so check the expiration date before you apply.
Philadelphia also requires lead-safe or lead-free certification for most rentals built before 1978. Much of the city's rowhome stock predates that year. Have the certification on file before you refinance, and confirm current requirements with the city.
The Office of Property Assessment sets values for the city's real estate tax, and recent reassessments raised values in many neighborhoods. Rentals do not qualify for the homestead exemption. Check the current assessment and bill, since the city's rate is applied to the full assessed value.
Pennsylvania's realty transfer tax and Philadelphia's own transfer tax apply to deeds on a sale, not to a straightforward refinance, though moving a property into an LLC by deed can trigger it unless an exemption applies. Ask your title company before you change the vesting.
This example is illustrative and not a quote. An investor owns a renovated three-bedroom rowhome in Newbold appraised at $300,000, owing $120,000. It rents for $2,350 a month. Taxes run about $300 a month and insurance about $150.
At 75% LTV the new loan is $225,000, leaving $105,000 after the payoff and before closing costs. On 30-year amortization, principal and interest is about $1,535. The full payment is about $1,985, for a DSCR of about 1.18x, above the 1.0x minimum.
| Item | Amount |
|---|---|
| Appraised value | $300,000 |
| Loan at 75% LTV | $225,000 |
| Existing loan payoff | $120,000 |
| Cash before closing costs | $105,000 |
| Principal and interest (30 years) | About $1,535 |
| Taxes, insurance and any HOA (monthly) | $450 |
| Total monthly payment | About $1,985 |
| Monthly rent | $2,350 |
| DSCR | About 1.18x |
Many Philadelphia investors own rowhomes converted to two or three units, larger twins split into apartments, or corner buildings with a storefront. The appraiser will look for the legal unit count, typically from the zoning permit and certificate of occupancy. Rent from units that are not legally permitted may not count.
Two to four unit properties qualify on combined rent, and 5 to 8 unit buildings can be financed on residential programs at a lower maximum LTV that varies by program. A building with a commercial storefront is usually reviewed as mixed-use; our commercial page covers that.
Philadelphia avoids hurricanes and most severe wind, so premiums are often moderate, but older rowhomes bring questions about roofs, party walls, electrical systems and plumbing. Flat roofs and shared walls mean a neighbor's problem can become yours. Some low-lying areas near the Schuylkill, the Delaware and smaller creeks are in mapped flood zones, and basement water is common in older blocks after heavy storms. A current landlord policy quote, with flood coverage if required, is the number to use.
Philadelphia investors tend to work block by block, buying, renovating and holding rowhomes in neighborhoods where they already know the contractors, the comparable sales and the rents. A cash-out on a finished, leased property is how many of them fund the next renovation without selling.
Investors also own rentals in Delaware County, Bucks, Montgomery and Chester counties, and across the river in South Jersey. Each has its own tax rates, rental registration rules and inspection requirements, and some suburban townships require a rental inspection before a new tenant moves in. Pennsylvania counties outside Philadelphia have not reassessed in many years in some cases, which can make tax bills vary widely between similar homes.
Have these ready before you apply.
Yes. We finance DSCR cash-out refinances on non-owner-occupied rentals in Philadelphia and its suburbs, up to 75% LTV, starting at $150,000.
Underwriting may ask for it. Philadelphia requires landlords to license each rental property, so have the license current.
Philadelphia requires most rentals built before 1978 to be certified lead-safe or lead-free. Have the certificate on file before you refinance.
If the units are legally permitted, generally yes. The appraiser looks for zoning and certificate of occupancy records.
A straightforward refinance usually does not trigger Pennsylvania or Philadelphia transfer tax, but deeding a property into an LLC can unless an exemption applies.
The minimum loan is $150,000, so a lower-value rowhome may not support a cash-out on its own. A blanket loan on several properties can be an option.
Seasoning varies by program. Some allow cash-out soon after purchase; others want several months or limit the loan to cost plus improvements.
No. The loan qualifies on rent. You need a 620 or higher credit score, reserves and, if the property is held in an LLC, the operating agreement and formation documents.
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