Lancaster's rental stock is built from brick: 19th century rowhomes, twins that share a wall, and big Victorians carved into apartments. Those buildings rent well, but in Pennsylvania the school tax bill often matters as much as the purchase price.
In short: LendingStreet finances rentals of 1 to 8 units in the City of Lancaster and across Lancaster County with DSCR loans that qualify on the property's rent rather than your W-2s or tax returns. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and cash-out refinances up to 75% LTV, with a 1.0x standard minimum DSCR and a 620 minimum credit score. LLC borrowers are standard and 30-year terms are available.
A DSCR loan compares the property's monthly rent with its full monthly payment: principal and interest, real estate taxes, insurance and any HOA or condo dues. At 1.0x the rent exactly covers that payment. We qualify the property rather than your personal income, so self-employed investors and people with large deductions are on equal footing.
The appraiser provides a market rent schedule; where a lease is in place, programs typically consider it alongside market rent. Programs below 1.0x exist for properties that come up a little short.
In a market like Lancaster, where purchase prices are moderate but taxes are meaningful, the ratio usually turns on two items: the rent the appraiser will support and the real tax bill. Get both right before you write an offer.
Inside the city, investors look at rowhomes and twins in Cabbage Hill, the Southeast, the West End, Chestnut Hill, the Northwest near Franklin and Marshall College and the blocks around Musser Park. Tenants include hospital staff at Lancaster General, students and employees at F&M, and workers commuting to warehouses and manufacturers around the county.
In the suburbs and boroughs, Lancaster Township, Manheim Township, East Hempfield, Millersville, Lititz, Ephrata, Elizabethtown, Mount Joy and Columbia each offer something different, from student rentals near Millersville University to cheaper river-town rowhomes in Columbia and newer single-family homes in Manheim Township.
A Lancaster County property pays three real estate taxes: county, municipal (city, borough or township) and school district, and the school tax is usually the largest. Pennsylvania counties reassess infrequently, so assessed values can lag far behind market values, and school districts in the state sometimes appeal assessments after a property sells well above its assessed value.
Pull the actual bills for the parcel and ask whether the school district has a practice of filing sale-based appeals. If it does, budget taxes on something closer to your purchase price, not the old assessment.
This example is illustrative and not a quote. An investor buys a three-bedroom brick rowhome for $245,000 that leases for $1,750 a month. Annual county, city and school taxes come to about $340 a month, and insurance is $100.
At 80% LTV the loan is $196,000. Estimated principal and interest on a 30-year term is about $1,354, for a total payment of about $1,794 and a DSCR of about 0.98x. At 75% LTV, the loan is $183,750, the payment about $1,709 and the DSCR about 1.02x. In the city, the tax line is a large share of the payment, so the ratio is sensitive to an appeal or reassessment.
| Item | 80% LTV | 75% LTV |
|---|---|---|
| Loan amount | $196,000 | $183,750 |
| Estimated principal and interest | $1,354 | $1,269 |
| Taxes | $340 | $340 |
| Insurance | $100 | $100 |
| Total monthly payment | $1,794 | $1,709 |
| DSCR at $1,750 rent | About 0.98x | About 1.02x |
The City of Lancaster runs a rental housing program that requires rental units to be registered and inspected on a regular cycle, and many boroughs and townships in the county have their own rental registration or occupancy rules. Before you buy, ask the seller for the current rental permit and the last inspection report, and check whether any violations are open.
Older city housing often has lead paint, and properties built before 1978 come with federal lead disclosure requirements. Factor lead-safe repairs into your budget if paint is in poor condition.
Pennsylvania charges a realty transfer tax of 1% to the state, plus local shares levied by the municipality and school district, so the total is commonly about 2% of the price and can be higher in some places. By local custom it is often split between buyer and seller, but your contract decides. Pennsylvania has no separate mortgage recording tax.
Lancaster County draws visitors to downtown Lancaster and to the farm country around Strasburg, Bird-in-Hand and Intercourse. Short-term rental rules differ by municipality: the city regulates STRs, and townships set their own zoning. Our STR DSCR programs can use projected short-term revenue on some programs, but only where the property can legally operate as one, so confirm with the municipality first.
Twins and rowhomes are single-family for lending purposes when they sit on their own deeded lot. Converted houses with two to four apartments qualify on combined rent, and five- to eight-unit buildings use the same DSCR approach with leverage that varies by program. Nine or more units is commercial; see our multifamily loans page.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, lease or expected rent, tax bills and insurance quote through the form below, or call (877) 298-1001. For statewide context, see our Pennsylvania DSCR loans page.
Yes. Rowhomes and twins on their own deeded lots are financed as single-family rentals, qualified on rent. Loans start at $150,000.
No. The loan qualifies on the property's rent compared with the full monthly payment. The minimum credit score is 620.
In Pennsylvania the school district tax is usually the largest part of the real estate tax bill, and it counts in the DSCR payment.
They can. Assessments often lag market values, and some school districts appeal assessments after a sale. Ask about the district's practice and budget conservatively.
The city runs a rental registration and inspection program. Confirm current requirements with the city before you close.
It is commonly split between buyer and seller by local custom, but the purchase contract controls.
Yes, if it is a 1-8 unit investment property with leases or market rent that supports the payment. Check borough occupancy rules for unrelated tenants.
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