In Allentown, five to eight units usually means an old brick building: a center-city rowhome block cut into apartments, a converted twin on a corner, or a former storefront with flats above. These buildings are solid but old, and the city's rental licensing shapes how they operate.
In short: Yes, LendingStreet finances 5 to 8 unit rental buildings in Allentown with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and maximum LTV on 5-8 units varies by program. In Allentown, plan around the city's rental licensing and inspections, Pennsylvania's realty transfer tax and the age of the building.
Center city Allentown, Old Allentown and the Old Fairgrounds area have long blocks of brick rowhomes, many converted into three to eight apartments. The West End has larger homes and some purpose-built small apartment buildings, while the East Side mixes twins and walk-ups.
Across the Lehigh Valley, Bethlehem's South Side near Lehigh University and downtown Easton near Lafayette College have similar converted buildings. Whitehall, Emmaus and Catasauqua add some 1950s and 1960s small apartment buildings.
| Area | Typical building | What to check |
|---|---|---|
| Center city, Old Allentown | Converted brick rowhomes, 5-6 units | Licensing status, fire separation, egress |
| West End | Larger homes and small apartment buildings | Higher prices, parking, updated systems |
| Bethlehem South Side, Easton | Conversions near colleges | Student turnover, local licensing rules |
Lenders treat one to four units and five to eight units a little differently. Both are residential on our programs, but a five to eight unit building has more rent to verify, a larger insurance policy and usually a different appraisal approach that leans on the building's income and comparable small-building sales in Allentown.
The core terms are the same: qualify on rent with a 1.0x standard minimum DSCR (sub-1.0 programs exist), 620 minimum credit, no W-2s or tax returns, LLC borrowers welcome and loans from $150,000 with no stated maximum. Maximum LTV can be lower on five to eight units than on a fourplex, and it varies by program.
The rent on each unit is added together, so one strong unit can offset a weaker one, but every unit's lease or market rent still has to be documented. If the building is not yet stabilized, a bridge loan can carry it through renovation and lease-up before a DSCR refinance.
Pennsylvania charges a 1% state realty transfer tax, and local municipalities and school districts add their own share, which can be higher in some cities. Buyer and seller customarily split it, but check the total for the specific municipality with your title company.
Lehigh County does not reassess on a regular cycle, so assessed values may lag market prices. Look up the county assessment and the combined county, city and school district millage, and confirm whether the school district has raised its millage recently.
Allentown requires rental units to be licensed and inspected, and a building that is out of compliance can face delays before units can be occupied. Ask the seller for current licenses and the last inspection report, and confirm the legal number of units with the city.
For pre-1978 buildings, lead-safe practices apply to renovation, and older wiring, stairs and fire separation between units are common inspection items.
This example is illustrative and not a quote. Take a 6-unit converted brick building in Old Allentown under contract at $750,000, with average rent of $1,150 per unit, or $6,900 a month in total. Monthly taxes are estimated at $850 and insurance at $380.
At 75% LTV the loan is $562,500, estimated principal and interest is about $3,933 and the total payment is about $5,163, for a DSCR of about 1.34x. At 70% LTV the loan drops to $525,000, the total payment to about $4,901 and the DSCR rises to about 1.41x. School district millage is a large share of the tax line here, so check it before you set your offer.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $562,500 | $525,000 |
| Gross monthly rent | $6,900 | $6,900 |
| Estimated principal and interest | $3,933 | $3,671 |
| Property taxes | $850 | $850 |
| Insurance | $380 | $380 |
| Total monthly payment | $5,163 | $4,901 |
| DSCR | About 1.34x | About 1.41x |
Underwriting adds up the rent on each unit, then checks it against what the appraiser says the market supports. If several units are leased well below market, or the seller cannot produce leases, the figure used for the ratio may be lower than the asking-price math assumed.
Ask for signed leases, a unit-by-unit rent roll and a few months of deposits before you finalize your offer, so the income you are paying for is the income the file can use.
Rowhome conversions share party walls with neighbors, so insurers ask about roofs, chimneys and fire separation. Older boilers and knob-and-tube wiring can raise premiums or limit carriers. Get a quote that reflects the actual building before you lock in your numbers.
Some properties near the Lehigh River and Jordan Creek are in flood zones; check the FEMA map.
The Lehigh Valley sits between New York City and Philadelphia, and warehouse, health care and manufacturing employers have grown here. Renters priced out of New Jersey and the Philadelphia suburbs add demand for apartments in older buildings.
Because many buildings need updates, investors sometimes buy with a bridge or rehab loan, finish the work, get licenses in place and then refinance into a DSCR loan once units are leased.
Bethlehem and Easton each run their own rental programs and tax rates, so a building a few miles away can carry a different set of rules than one in Allentown.
A complete package gets a faster and clearer answer. Have these ready before you call (877) 298-1001 or use the form below.
LendingStreet underwrites small buildings on their rent, not your tax returns. Our investor loans are business-purpose loans on non-owner-occupied property. Send what you have and we will tell you plainly what leverage the building supports.
Allentown requires rental licensing and inspections. Confirm the building's license status and the legal unit count with the city before closing.
Pennsylvania's state realty transfer tax is 1%, and local shares are added on top. Ask your title company for the exact combined figure for the municipality.
Yes. Once units are licensed and leased, the DSCR refinance qualifies on the combined rent. Seasoning rules vary by program.
Underwriting looks at leases and market rent for each unit. A vacant unit may be counted at market rent on some programs, but documented leases help.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
On our programs, buildings with up to 8 units are residential. Nine or more units is commercial financing.
The standard minimum is 1.0x, meaning the rent covers the full monthly payment. Sub-1.0 DSCR programs exist with different pricing and leverage.
Loans start at $150,000 with no stated maximum. Maximum LTV on 5-8 unit buildings can be lower than on 1-4 units and varies by program.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.