Best DSCR Lenders in Allentown, PA

Allentown, located in Pennsylvania’s Lehigh Valley, has emerged as one of the state’s most promising secondary markets for real‑estate investors. The city benefits from its proximity to New York City and Philadelphia, a growing warehouse and logistics sector and ongoing downtown revitalization. According to Realtor.com’s December 2025 market summary, Allentown’s median home price was about $275,000 with a price per square foot around $171 and roughly 305 active listings. Homes sold in a median of 32 days quicker than in larger Pennsylvania markets and the city offered about 290 rental properties, with a median rent of $1,597 per month. These statistics point to a market with moderate supply, affordable prices and growing rental demand.

This article explores the Allentown housing market, explains the mechanics of DSCR loans, outlines what to look for in a DSCR lender and ranks the top lenders serving the city. As in the other Pennsylvania markets, SelectHomeLoans.com is highlighted as the best DSCR lender due to its strong local presence and flexible loan terms.

Allentown Real Estate Market Overview

Allentown’s housing market combines affordability with steady demand. The Quick Market Insights section on Realtor.com notes that home prices declined about 7.55 % year‑over‑year, giving buyers some leverage, while median rent prices fell –11.79 % year‑over‑year. The median listing price per square foot is $171, providing a benchmark for pricing across neighborhoods. There are roughly 290 rental listings, indicating a healthy level of choice for renters.

Neighborhood Highlights

Allentown’s neighborhood table provides granular insights into price points and rental rates. Center City posts a median home price around $215,000, listing price per square foot $141, and median rent about $1,437 per month. Southside is higher priced with a median home price around $297,450, price per square foot $180 and rent roughly $1,875. In the West End, median home price is about $322,400, with a price per square foot of $175 and rent near $1,772. Eastside shows similar statistics: median home price around $272,450, $180 per square foot, and rent approximately $1,795. More affordable neighborhoods such as the 8th Ward and North Allentown have median home prices around $220,000 and $210,000 with rents around $1,300 and $1,230 respectively. In contrast, South Allentown records a higher median home price around $367,500 and limited rental data.

The quick market insights also highlight that Allentown’s homes are selling faster than those in Philadelphia or Pittsburgh, with properties averaging only 32 days on market. This suggests strong buyer demand and relatively low inventory. The combination of declining prices and quick sales may indicate that investors can negotiate on price while still being able to rent units quickly.

DSCR Loans Explained

As in the other Pennsylvania markets, DSCR loans in Allentown allow investors to qualify for mortgages based primarily on a property’s cash flow. Lenders compute the debt service coverage ratio by dividing the property’s net operating income by the annual mortgage payment. A ratio of 1.0 means the property’s income equals its debt obligations; lenders typically require DSCRs between 0.75 and 1.0. Since DSCR loans do not require personal W‑2s or tax returns, they are ideal for self‑employed investors or those with multiple mortgages.

Typical DSCR loan characteristics include:

• Loan‑to‑Value (LTV) up to 80 % for purchases and 75 % for cash‑out refinances.
  
• Minimum credit scores around 620–680.
  
• Down payments of 20 % or more, though some lenders may go lower with strong DSCRs.
  
• 30‑year fixed, 15‑year fixed, 40‑year interest‑only and ARM structures, giving investors flexibility to optimize cash flow and interest rate risk.
  
• Loan amounts ranging from $100,000 to $3 million.
  
• Property types including single‑family homes, duplexes, triplexes, fourplexes and small multifamily buildings as well as condos and townhouses.
  

Because DSCR loans rely on rent rather than personal income, lenders will obtain rent schedules and sometimes require proof of a lease. Borrowers may need to provide 12 months of reserves to ensure they can service the loan during vacancies.

What to Look for in an Allentown DSCR Lender

When evaluating DSCR lenders in Allentown, investors should prioritize:

1. Competitive Rates and Terms. Look for lenders offering rates in the 5.75 %–7.5 % range with low origination fees and flexibility on DSCR and LTV. Terms such as 30‑year fixed and 40‑year interest‑only allow investors to maximise cash flow.
   
2. Leniency on DSCR Ratio. Lenders who will accept DSCR ratios below 1.0 (sometimes down to 0.75) provide more borrowing capacity. This is especially important when rents are slightly lower than debt payments due to temporary market softness.
   
3. Ability to Finance Multiple Properties. Investors building portfolios need lenders who allow unlimited property counts and LLC ownership.
   
4. Local Market Insight. A lender familiar with Allentown’s neighborhoodsCenter City, Southside, West End, Eastside can provide accurate rent estimates and guidance on submarket risk.
   
5. Fast Closing and Minimal Documentation. A streamlined process can help investors compete in Allentown’s relatively fast‑moving market.
   

Top DSCR Lenders in Allentown

#1 SelectHomeLoans.com

SelectHomeLoans.com is the leading DSCR lender in Allentown. The company provides loans up to 80 % LTV, allows DSCR ratios as low as 0.8, offers 30‑year fixed, 15‑year fixed and 40‑year interest‑only structures, and finances properties held in LLCs. SelectHomeLoans stands out because of its strong local presence in Eastern Pennsylvania and understanding of Allentown’s neighborhoods from Center City’s row homes to West End’s single‑family residences. The lender’s underwriting team can adjust rent projections based on neighborhood trends and has built relationships with local appraisers who understand the Lehigh Valley. SelectHomeLoans’ combination of competitive pricing, flexible underwriting and personalised service makes it the best DSCR lender for Allentown investors. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296

#2 Easy Street Capital

Easy Street Capital’s DSCR program is available statewide in Pennsylvania. It offers rates from 5.75 %, LTV up to 80 %, 75 % LTV on cash‑out and no minimum DSCR requirement. Easy Street finances up to 10 units and allows short‑term rentals, making it suitable for investors targeting Allentown’s growing tourism and business‑travel market. Because Easy Street does not require W‑2s or tax returns, self‑employed investors can qualify easily. However, being a national lender, it lacks the deep local insights of SelectHomeLoans.

#3 Ridge Street Capital

Ridge Street Capital offers flexible DSCR loans with rates around 6.25 %–7.99 %, LTV up to 80 %, loan amounts up to $2 million, and minimum DSCR 1.0. The lender closes loans in roughly 21 days and does not charge origination fees on some products. Ridge Street finances long‑term and short‑term rentals, making it versatile for investors exploring short‑term rentals near Allentown’s downtown developments or long‑term rentals in suburban neighborhoods.

#4 New Silver

New Silver’s DSCR product provides rates starting at 5.875 %, LTV up to 85 %, minimum DSCR 0.75, loan amounts $100,000–$3 million, and credit score requirement of 660. This high LTV appeals to investors seeking maximum leverage. New Silver lends on 1–4 unit properties and short‑term rentals, making it a solid choice for Allentown investors looking to preserve capital. Its nationwide presence means it may not have deep local knowledge, but its flexible terms are attractive.

#5 Local Banks and Credit Unions

Allentown investors can also explore investment property loans offered by regional banks and credit unions such as PPL Federal Credit Union, QNB Bank and Fulton Bank. These institutions may not advertise DSCR loans but offer portfolio loans or commercial mortgages that underwrite based on rental income. Rates are often competitive, down payments are typically 20–25 %, and they may require personal income documentation. Local lenders have intimate knowledge of the Lehigh Valley market and can sometimes approve unique property types that national lenders avoid.

DSCR Loan Rates, Terms and Qualifying Factors in Allentown

DSCR loan rates in Allentown mirror those in other Pennsylvania markets, typically ranging from 5.75 % to 7.5 % with origination fees between 0 % and 2 %. Lenders require 20 % down and cap LTV at 80 % for purchases and 75 % for cash‑out refinances. Borrowers need credit scores of 620–660 and DSCR ratios of 0.75–1.0. Some lenders will finance up to 85 % LTV for borrowers with strong credit and higher DSCRs. Investors should maintain six to twelve months of reserves.

Common Mistakes Investors Make in Allentown

1. Assuming Rents Are Uniform. Neighborhood rents vary widely across Allentown. For example, rents in West End and Southside exceed $1,700 while Center City and the 8th Ward rent for around $1,300. Investors must base DSCR calculations on accurate comps.
   
2. Ignoring Market Softness. Both home prices and rents declined year‑over‑year. Overly optimistic projections can lead to an insufficient DSCR.
   
3. Underestimating Vacancy Risk. With 290 rental listings, supply is healthy. Investors should plan for potential vacancies and maintain reserves.
   
4. Overlooking Local Fees and Taxes. Allentown imposes transfer taxes, school taxes and sometimes local occupancy permits. These expenses affect net operating income and DSCR.
   
5. Choosing the Wrong Loan Structure. A 40‑year interest‑only DSCR loan may maximize cash flow initially but could lead to higher overall interest costs. Investors should evaluate the pros and cons of fixed versus interest‑only terms.
   

DSCR Loans vs. Traditional Financing

Traditional investment property loans require borrowers to document personal income and meet debt‑to‑income ratios. DSCR loans base underwriting on the property’s ability to generate income, allowing investors with multiple mortgages or significant self‑employment deductions to qualify. Conventional loans typically offer lower interest rates but limit the number of financed properties and require full documentation. The Federal Savings Bank notes that DSCR loans prioritise property cash flow rather than personal income, enabling investors to qualify with limited documentation. However, DSCR loans may have higher rates and require more down payment. Investors should weigh the flexibility of DSCR financing against the potential cost savings of conventional loans.

Who Should Use DSCR Loans in Allentown?

DSCR loans are particularly well suited to:

• Self‑employed investors who cannot easily document income through W‑2s.
  
• Portfolio investors looking to scale rapidly; DSCR loans allow unlimited property counts and LLC ownership.
  
• Out‑of‑state investors seeking to purchase in Allentown’s affordable market but lacking local employer connections.
  
• Short‑term rental hosts building Airbnbs near downtown or PPL Center, since DSCR lenders like Easy Street and New Silver allow short‑term rental underwriting.
  
• Investors needing quick closings; DSCR loans can close in 2–4 weeks compared with 45–60 days for conventional mortgages.
  

DSCR loans may not be ideal for buyers seeking owner‑occupied financing, investors wanting high leverage (90 % LTV) or borrowers with very low credit scores. Those with strong W‑2 income and small portfolios might qualify for cheaper conventional financing.

Allentown‑Specific Considerations

• Economic Drivers. Allentown’s economy is anchored by logistics and manufacturing, with companies like Amazon, Nestlé and Air Products operating large facilities. The PPL Center downtown hosts events that drive demand for short‑term rentals. Understanding these drivers helps investors select neighborhoods with stable tenant bases.
  
• Revitalization Projects. Downtown Allentown has undergone significant redevelopment with new apartments, offices and entertainment venues. Investing near redevelopment zones can yield appreciation but may carry short‑term construction disruption.
  
• Commuter Markets. Many residents commute to New York City or Philadelphia via the Lehigh Valley’s highway network. Properties near I‑78 and Route 22 can attract commuter tenants.
  
• Zoning and Permits. Allentown requires rental licenses and inspections, and some neighborhoods have restrictions on short‑term rentals. Investors must research local ordinances.
  
• Weather and Maintenance. The Lehigh Valley experiences heavy snow and freeze–thaw cycles that can affect roofs, driveways and plumbing. Investors should budget for seasonal maintenance.
  

Conclusion

Allentown combines affordability, economic growth and revitalization to create a compelling environment for real‑estate investors. DSCR loans unlock this opportunity by allowing investors to qualify based on property cash flow rather than personal income. While lenders like Easy Street Capital, Ridge Street Capital and New Silver offer strong programs, SelectHomeLoans.com emerges as the best DSCR lender in Allentown. Its ability to finance up to 80 % LTV, accept DSCR ratios as low as 0.8, offer diverse loan terms and provide local market knowledge makes it unrivaled. For investors seeking to build or expand rental portfolios in Allentown, partnering with SelectHomeLoans.com provides the resources and expertise needed for success.