Pennsylvania's cities were built dense, and many large rowhouses, twins and Victorian homes were split into five to eight apartments decades ago. Those conversions are some of the most traded small rentals in the state.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Pennsylvania with DSCR loans that qualify on the building's rent, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620, while maximum LTV on 5 to 8 units can be lower than on 1 to 4 units and varies by program. In Pennsylvania, the realty transfer tax, city rental licensing and lead rules, and old building systems are the items that decide most files.
Philadelphia has converted rowhouses and small apartment buildings in West Philadelphia near Penn and Drexel, Fairmount, Germantown, Northern Liberties and South Philadelphia. Pittsburgh has them in Oakland, Shadyside, Bloomfield, Lawrenceville and the South Side, often on hillside lots.
Allentown, Bethlehem, Reading, Lancaster, Harrisburg, Scranton and Wilkes-Barre all have large older homes split into apartments, at prices per unit well below Philadelphia's.
| Area | Typical buildings | What to check |
|---|---|---|
| Philadelphia | Rowhouse conversions and small buildings | Rental license, lead certification |
| Pittsburgh | Hillside walk-ups and conversions | Retaining walls, older systems |
| Lehigh Valley, Harrisburg, Scranton | Victorian conversions | Fire code, heat, deferred maintenance |
The ratio is simple: total monthly rent from all units divided by the monthly payment, which includes principal, interest, property taxes, insurance and any HOA dues. On standard programs it has to reach 1.0x, and a higher ratio can improve terms. Sub-1.0 programs exist for buildings that fall a little short.
Appraisers on 5 to 8 unit buildings usually look at both comparable sales and the income the building produces, and they give an opinion of market rent for each unit. If the in-place rents are well below market, underwriting generally works from the leases you actually have, so a building with old below-market leases may size smaller than its potential suggests.
For our programs, 5 to 8 units is still residential, so the loan is underwritten like a larger version of a fourplex loan rather than a commercial apartment loan. The difference is that maximum LTV can be lower on 5 to 8 unit properties and on larger balances, and reserve requirements can be higher. Both vary by program.
| Term | What to expect |
|---|---|
| Property type | 5 to 8 unit residential rental |
| Loan amount | From $150,000, no stated maximum |
| Purchase LTV | Up to 80% on some programs; often lower on 5-8 units |
| Cash-out LTV | Up to 75%; varies by program |
| Minimum DSCR | 1.0x standard; sub-1.0 programs exist |
| Credit score | 620 minimum |
| Income documents | None; qualifies on rent |
| Borrower | LLC standard; sign for the loan personally |
Pennsylvania charges a realty transfer tax of 1% at the state level, and most local governments add their own share. Philadelphia and Pittsburgh have notably higher local rates. Buyers and sellers commonly split the total, but the contract controls. On a 5 to 8 unit purchase this is a real closing cost, so ask your title company for the figure.
Property taxes are set by county, municipality and school district. Some counties have not reassessed in many years, so a bill can change if a county reassesses or if the sale triggers an appeal. Use the current bill and ask about any pending reassessment.
Many Pennsylvania conversions date to the early 1900s. Knob-and-tube wiring, older boilers, slate roofs and shared egress are common inspection items. Insurers ask about electrical updates and fire separation between units.
Winters bring freeze risk and heating costs, and many conversions still have owner-paid heat. Ask for utility bills, not just the rent roll.
This example is illustrative and not a quote. An investor buys a West Philadelphia six-unit conversion for $900,000. Each unit rents for about $1,350 a month, so gross rent is $8,100. Property taxes are budgeted at $750 a month and insurance at $400. The owner also pays about $350 a month in utilities and common-area costs, which affect cash flow but are not part of the DSCR payment.
At 75% LTV the loan is $675,000. On 30-year amortization, principal and interest is about $4,720, so the payment with taxes and insurance is about $5,870 and the DSCR is about 1.38x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $1,880 a month is left before vacancy, repairs and management, which is why a realistic expense budget matters as much as the ratio.
| Item | 75% LTV |
|---|---|
| Purchase price | $900,000 |
| Gross monthly rent | $8,100 |
| Loan amount | $675,000 |
| Principal and interest | $4,720 |
| Property taxes | $750 |
| Insurance | $400 |
| Monthly payment (PITI) | $5,870 |
| DSCR | About 1.38x |
Philadelphia requires a rental license for each rental property and lead-safe or lead-free certification for many pre-1978 rentals. Pittsburgh has its own rental registration program. Allentown, Reading and other cities run rental inspection programs.
Pennsylvania's Landlord and Tenant Act sets deposit and notice rules. Philadelphia adds its own tenant protections, so check current rules before changing leases.
Many conversions were done long ago, and the legal unit count does not always match the number of units in use. Check the zoning and the certificate of occupancy or rental license. Underwriting relies on legal units, so an extra unit without approval may not count.
A complete package gets a faster, clearer answer on a 5 to 8 unit building.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll and the loan amount you want. The team will run the ratio on realistic taxes and insurance, check it at a few loan amounts and come back with options, including sub-1.0 DSCR programs where they fit. Use the form below or call (877) 298-1001.
Buildings with nine or more units are commercial; for those, see our multifamily page.
The state charges 1%, and most local governments add their own share. Philadelphia and Pittsburgh are higher. Ask your title company for the total.
Yes. Philadelphia requires a rental license and lead certification for many pre-1978 rentals. Check with the city.
Underwriting usually relies on legal units. An unapproved unit may not count toward rent or value.
No. The loan qualifies on the building's rent. You need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
Vacant units can often be counted at a market rent the appraiser supports, but some programs want a minimum number of units leased. It varies by program, so tell us about vacancies up front.
On our programs, 1 to 8 units is residential, so 5, 6, 7 and 8 unit buildings qualify for a DSCR loan on rent. Nine or more units moves to commercial financing.
Purchase loans go up to 80% LTV on some programs, but 5 to 8 unit buildings and larger balances often get less. Plan for 20% to 30% down plus reserves, depending on the program and the ratio.
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