Philadelphia runs on the rowhome. Investors buy them block by block in Port Richmond, Kensington, Grays Ferry and West Philadelphia, renovate with hard money and lease them out. The refinance is where that short-term loan becomes a 30-year payment the rent can carry.
In short: Yes. LendingStreet offers DSCR rate-and-term refinances on Philadelphia-area rentals with 1 to 8 units, replacing short-term or maturing debt with a loan that qualifies on the rent instead of your personal income. Loans start at $150,000 with no stated maximum, leverage reaches 80% LTV on some rate-and-term programs, and most programs look for a 1.0x DSCR and a 620 credit score. In Philadelphia, most refinances are rowhomes, twins and duplex conversions, and a current rental license, lead-safe certification and the end date of any tax abatement are the local items to have ready.
Philadelphia has one of the largest renter populations on the East Coast, supported by Penn, Drexel and Temple, the hospital systems and a deep base of service jobs. The housing stock is mostly brick rowhomes and twins built before World War II, many of them converted to two or three units over the years.
The usual path is to buy with hard money, renovate, license and lease, then refinance. A rate-and-term DSCR refinance pays off the rehab lender and qualifies on the lease, which matters for investors whose tax returns show little income after depreciation and repairs.
Rental stock and rent levels change quickly from one Philadelphia neighborhood to the next.
| Area | Typical rental stock | Common refinance situation |
|---|---|---|
| Port Richmond, Kensington and Fishtown | Rowhomes and duplex conversions | Refinancing after a gut renovation |
| Grays Ferry and South Philadelphia | Two-story rowhomes | Rate-and-term on a long-held rental |
| West Philadelphia and Cobbs Creek | Twins and porch-front rowhomes | Paying off rehab money |
| Mayfair, Frankford and Olney | Rowhomes and small multi-units | Replacing a bank balloon |
| Upper Darby and Delaware County | Rowhomes and twins outside the city | Refinancing a bridge loan |
In a rate-and-term refinance, the new loan covers the payoff of your current debt plus closing costs, and you walk away with little or no cash. That is why leverage can go higher than on a cash-out: up to 80% LTV on some rate-and-term programs, compared with up to 75% LTV for cash-out.
Investors in Philadelphia usually choose rate-and-term when the goal is a better payment or a longer term, not new money. If you do want to pull equity, our Pennsylvania cash-out page covers that path.
This example is illustrative and not a quote. A three-bedroom rowhome in Port Richmond was bought with a hard money loan, fully renovated, licensed and leased for 12 months. It appraises at $275,000 and rents for $2,050 a month. The hard money loan balance is $185,000, with an interest-only payment of about $1,773 a month.
A rate-and-term DSCR refinance of $192,000 covers the payoff plus about $7,000 in estimated closing costs, roughly 70% LTV. Estimated principal and interest on a 30-year fixed loan is about $1,294. With taxes of $230 and insurance of $140, the monthly payment is about $1,664, for a DSCR of about 1.23x.
The new payment is about $479 a month lower than under the hard money loan, and it is fixed for 30 years instead of coming due. The ratio clears the 1.0x standard minimum.
| Item | Before (hard money loan) | After (DSCR refinance) |
|---|---|---|
| Loan balance | $185,000 | $192,000 |
| Monthly loan payment | $1,773 (interest-only) | $1,294 (est. principal and interest) |
| Property taxes | $230 | $230 |
| Insurance | $140 | $140 |
| Total monthly payment | $2,143 | $1,664 |
| DSCR at $2,050 rent | About 0.96x | About 1.23x |
| Loan term | Short term, comes due | 30-year fixed |
The appraiser decides two numbers that matter here: the value, which sets your LTV, and the market rent, which most programs compare with the lease to calculate DSCR. In Philadelphia, appraisers compare rowhomes on nearby blocks, and a legal duplex conversion needs the right certificate of occupancy to be valued as two units.
The Office of Property Assessment has issued several citywide reassessments in recent years, and many neighborhoods saw large jumps. Check the current OPA value and the bill for the coming year, not the value from when you bought.
Many renovated and newly built homes carry a 10-year tax abatement on the improvement value, and newer abatements phase down over the term. When an abatement ends, taxes can rise sharply, so check the end date and test the ratio at the full tax figure. Pennsylvania has no mortgage recording tax, and the realty transfer tax applies to sales, not to a refinance.
Most rowhomes have flat roofs with rubber or modified bitumen membranes, shared party walls and older basements that can take on water. Insurers want to know roof age, electrical updates and whether old knob-and-tube wiring is gone. Keep renovation invoices handy.
Philadelphia requires a rental license from the Department of Licenses and Inspections for rental units, and landlords must give tenants a Certificate of Rental Suitability. Duplex and triplex conversions also need the right zoning and certificate of occupancy for the unit count.
Under the city's lead law, most pre-1978 rentals must be certified lead-safe or lead-free when leases start or renew. Without a license and the lead certification, a landlord can have trouble collecting rent in court, so have both in place before the appraisal.
Most investors start the DSCR refinance once the property is leased and about two months before the short-term note comes due. How long you need to own the property first, and whether the appraised value or your cost basis is used, depends on the program. In Philadelphia, that often means a rowhome renovated over four to six months, licensed by L&I and leased before the hard money note comes due.
To get a quote, use the form below or call (877) 298-1001 with the address, current payoff and rent. LendingStreet reviews 1-8 unit rentals across Philadelphia County plus Delaware, Montgomery and Bucks counties, and the team will show the ratio at more than one loan amount. Before you call, it helps to run the deal through our DSCR calculator using the actual tax bill and insurance quote, so there are no surprises.
You should have one. Philadelphia requires a rental license from L&I, and a missing license can stall both the appraisal and the closing.
Taxes can rise sharply once the abatement phases out. Test the DSCR at the full tax figure so the loan still works after it ends.
Most pre-1978 rentals in Philadelphia need lead-safe or lead-free certification when leases start or renew. Have it before you refinance.
Yes, if the conversion is legal for two units with the right certificate of occupancy. The loan qualifies on the combined rent.
Seasoning varies by program. Some programs can use the appraised value sooner than others. Our seasoning guide explains the options.
Yes. LLC borrowers are standard on DSCR loans, and a refinance is a common time to move title into an entity.
Loans start at $150,000 with no stated maximum, and the minimum credit score is 620.
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