Scranton has a deep supply of big wood-frame houses and Victorian conversions with five to eight units, many built when the city was a coal and rail center. Prices per unit are low, and two local issues come up on almost every file: old county assessments and mine subsidence.
In short: LendingStreet finances 5-8 unit buildings in Scranton, Dunmore, Wilkes-Barre and the Lackawanna Valley with DSCR loans that qualify on combined rent, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, and leverage on 5-8 units varies by program. Ask about mine subsidence insurance and budget carefully for taxes and repairs on older buildings.
The Hill Section, near the University of Scranton and the hospitals, has large Victorian houses split into apartments. Green Ridge and the Lower Hill add more, and the West Side and South Side have older multi-unit houses at lower prices.
Dunmore, Clarks Summit and Dickson City have small buildings near jobs and highways, and Wilkes-Barre to the south has a similar housing stock.
Many buildings here are three-story wood-frame houses with two or three units per floor, deep porches and a shared basement. Others are former single-family mansions in the Hill Section and Green Ridge that were divided decades ago, sometimes with units added in attics and rear wings.
| Area | Typical building | Tenant base |
|---|---|---|
| Hill Section | Victorian conversions with 5-8 units | Students, hospital and university staff |
| Green Ridge | Large houses and small buildings | Professionals and families |
| West Side and South Side | Older multi-unit houses | Working households |
| Dunmore and Clarks Summit | Small apartment buildings | Commuters |
The Lackawanna Valley was heavily mined for anthracite coal, and some areas are at risk of ground movement over old mines. Standard property insurance usually excludes mine subsidence.
Pennsylvania runs a Mine Subsidence Insurance program, and coverage is affordable for most buildings. Ask your agent whether the property is in a mining area and add the premium to your budget.
A building with five to eight units is still residential for our DSCR programs, so it qualifies on the property's rent rather than your personal income. There are no W-2s or tax returns to collect, LLC borrowers are standard and the minimum credit score is 620. Loans start at $150,000 with no stated maximum, and 30-year terms are available.
The ratio is the combined monthly rent of every unit divided by the full monthly payment: principal, interest, taxes and insurance. The standard minimum is 1.0x, and sub-1.0 programs exist for buildings that fall a little short. Maximum LTV on 5-8 unit buildings can be lower than the 80% purchase and 75% cash-out ceilings that apply to smaller rentals; it varies by program.
Expect the appraiser to review the rent roll unit by unit and compare each rent with similar units nearby. Leases well above the local market can be questioned, and vacant units need a supportable rent figure, so a clean rent roll matters as much as the purchase price.
For many years, Lackawanna County assessments were based on old values, and a countywide reassessment has been under way. Tax bills on similar buildings can differ widely. Check the county record and ask whether a new assessment is coming.
Pennsylvania charges a 1% state realty transfer tax plus a local share, and the combined local rate in Scranton is higher than in many Pennsylvania towns. The tax is often split between buyer and seller, so confirm the split in your contract.
This example is illustrative and not a quote. An investor buys a six-unit Victorian in the Hill Section for $560,000. The units rent for $925 each, for a combined $5,550 a month. Taxes are budgeted at $900 a month and insurance at $400.
At 75% LTV the loan is $420,000, estimated principal and interest is about $2,937 and the total payment is about $4,237, for a DSCR of about 1.31x. At 70% LTV the loan drops to $392,000, the payment to about $4,041 and the DSCR rises to about 1.37x. Insurance here includes a small mine subsidence premium. The ratio is comfortable at either leverage level.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $560,000 | $560,000 |
| Combined monthly rent | $5,550 | $5,550 |
| Loan amount | $420,000 | $392,000 |
| Estimated principal and interest | $2,937 | $2,741 |
| Taxes and insurance | $1,300 | $1,300 |
| Total monthly payment | $4,237 | $4,041 |
| DSCR | About 1.31x | About 1.37x |
Many Scranton conversions have old boilers, knob-and-tube wiring in places, slate or older roofs and stone foundations. Fire separation and egress between units matter for insurance and for city inspections.
Scranton has used rental registration and inspection rules, so ask the city what applies to your building and whether the unit count is legal.
Budget for snow removal, roof and gutter work and heating costs if the owner pays for heat. A building with a single old boiler and owner-paid gas can look strong on rent but thin once utilities are counted.
The University of Scranton, Marywood University, Geisinger Commonwealth School of Medicine and the regional hospitals support steady rental demand. Warehouses along I-81 and I-84 also employ many workers.
Rents are modest, but low prices often let buildings cover the payment comfortably.
Scranton is also within reach of New York City and Philadelphia by highway, and some tenants work hybrid jobs while paying far less than they would in those metros. That supports demand for updated units in walkable neighborhoods.
Have these on hand when you request a quote.
Our investor loans are business-purpose loans on non-owner-occupied property. To get a quote, use the form below or call (877) 298-1001 with the address, units, current rents and price.
The LendingStreet team will check the ratio against a realistic tax and insurance budget and show what loan amount the rent supports. Investors comparing markets can also read our Pennsylvania 5-8 unit DSCR page.
It is often recommended in mining areas. Pennsylvania runs a state program, and premiums are generally affordable.
Assessments were based on old values for many years. Check the county record and ask about reassessment.
Pennsylvania charges 1% plus a local share, and Scranton's local share is higher than average. Confirm with your title company.
The city has used registration and inspection rules. Ask the city what applies to your building.
Yes. We finance 5-8 unit buildings throughout northeastern Pennsylvania.
On our DSCR programs, 1 to 8 units is residential. Nine or more units is commercial and is covered on our multifamily pages.
No. A DSCR loan qualifies on the property's rent. We do not collect W-2s or tax returns. The credit score minimum is 620.
You can bring more cash to lower the loan amount, or look at a sub-1.0 DSCR program if the numbers are close.
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