In the Poconos, the HOA Decides — Not the Township
Most short-term rental due diligence starts with the municipality. In Pennsylvania’s Pocono region that is the wrong first call.
A large share of Pocono investment inventory sits inside private community associations gated developments with their own governing documents, their own boards, and their own rules about short-term rental. Those association rules frequently govern where township ordinance does not, and they can differ by section and even by lot within the same community.
The failure pattern is consistent and expensive. An investor confirms the township permits short-term rental, closes, and then discovers the community association prohibits it on their specific lot or permits it only with a permission that the previous owner held and that does not convey.
Verify in this order: the specific lot’s permissibility under the association’s governing documents, in writing, from the association then the township. Get the association’s written confirmation into the loan file, because a lender underwriting projected rental income will want it too.
This applies less to a 1099 loan, where you qualify on your own income rather than the property’s projections. But it determines entirely whether the investment works.
The Lenders
Select Home Loans
Select Home Loans is a Non-QM mortgage broker (NMLS #2384002) writing 1099 investor loans across Pennsylvania. The state has two very different metro economies and a distinct resort market, and investor appetite varies across all three working multiple wholesale shelves is how a Philadelphia rowhouse file and a Pocono cabin file both get placed.
We quote DSCR and bank statement alternatives alongside the 1099 program so you can compare paths on the same property.
Get a quote · (888) 550-3296
Other lenders worth calling — listed in no particular order:
Brokers First Funding A wholesale Non-QM lender licensed in Pennsylvania, publishing state-specific file guidance including Pocono DSCR short-term rental protocols that lead with association verification, Philadelphia pharmaceutical consulting bank statement structuring, and multi-stream income handling for the Pittsburgh health system workforce. Broker channel.
Capital Home Mortgage Pennsylvania Pennsylvania operations across 1099, bank statement, asset, and DSCR programs.
Cliffco Mortgage A Non-QM lender offering bank statement, asset-based, 1099, and DSCR programs for self-employed borrowers and investors across the Mid-Atlantic and Northeast.
Angel Oak Mortgage Solutions One of the largest dedicated Non-QM investors nationally, with a purpose-built 1099 income program. Reached through a broker.
Griffin Funding Publishes qualifying on 90 to 100 percent of gross 1099 income, 620 minimum credit, and loan amounts to $4 million.
Deephaven Mortgage A long-established Non-QM lender with DSCR and alternative documentation programs across the Mid-Atlantic.
Verify current licensure and program availability before relying on any listing. See the disclaimer at the end of this page.
Two Metros, Two Income Profiles
Pennsylvania’s 1099 population splits along the same line as its economy.
Philadelphia and the surrounding counties are anchored by pharmaceutical and life sciences employment, which supports a deep independent consulting layer. These borrowers frequently hold a mix of consulting income and grant or research income, and the two document very differently — grant income often does not qualify at all. Identify what is what before the file goes in, and expect a lender to want consulting agreements rather than just the 1099 forms. Twenty-four months is generally the right lookback here, because engagement-based consulting is lumpy by nature.
Pittsburgh is anchored by an unusually large integrated health system and a technology and robotics sector built around the universities. Multi-stream income is common — clinical work, consulting, teaching, and equity or research income arriving through several channels at once. A 1099 program may capture only part of your picture; a combined or asset-based approach frequently qualifies these borrowers for substantially more. Flag the full structure at the outset.
Across both metros, construction and specialty trades working a genuinely old housing stock make up the other large 1099 group, with the heavy documented expense that makes gross-receipts qualifying decisive.
How Qualifying Works
A 1099 loan qualifies you on income documented on your 1099 forms rather than the net profit shown after deductions. Appraisal, assets, credit, reserves, and ability-to-repay analysis all work normally.
Programs split into two camps. Some apply 90 percent or more of gross 1099 income with no expense deduction. Others apply an expense factor of 10 to 25 percent first.
On $180,000 of annual 1099 income:
| Method | Qualifying income |
|---|---|
| 90% of gross | $162,000/yr — $13,500/mo |
| Gross less 20% expense factor | $144,000/yr — $12,000/mo |
| Net profit from your tax return | frequently under $80,000 |
Model your payment with our mortgage calculators.
The two-year self-employment history requirement is separate from the two-year income lookback. These get conflated constantly ask about both.
Pennsylvania Investment Markets
Philadelphia offers deep rowhouse inventory with some of the better rent-to-price ratios in the Northeast. The city requires rental licensing and has meaningful tenant protections confirm compliance status before applying on a refinance. Multi-unit rowhouse conversions are common and generally financeable, but confirm the legal unit count matches the deed and the appraisal.
Pittsburgh offers similarly strong yields with a distinctive housing stock and significant topographical variation that affects condition and appraisal hillside foundations, retaining walls, and access are routine underwriting items.
Lehigh Valley Allentown, Bethlehem, Easton has absorbed substantial logistics employment and supports steady rental demand at mid-market prices.
Harrisburg, Lancaster, Scranton offer value-corridor pricing with stable government, healthcare, and agricultural employment.
The Poconos are the seasonal short-term rental market discussed above, drawing from New York and New Jersey.
Rural counties are where loan minimums bind. A meaningful share of inventory prices below common Non-QM floors of roughly $75,000 to $150,000.
Other Pennsylvania Specifics
Judicial foreclosure. Pennsylvania forecloses through the courts, which lengthens timelines and makes Non-QM investors somewhat more conservative on leverage than in a power-of-sale state.
Very old housing stock. Both major metros are largely pre-1940 in their core neighborhoods. Lead disclosure obligations apply to pre-1978 property, and appraisers flag deferred maintenance knob-and-tube wiring, older heating systems, roof and structural condition more frequently than in newer markets.
Local tax structure is unusually fragmented. Pennsylvania has thousands of separate taxing bodies including municipalities and school districts, and rates vary substantially. Because taxes sit inside both DTI and DSCR, pull the actual bill rather than a county average.
Realty transfer tax is levied at both state and local level in most jurisdictions, and the combined rate in Philadelphia and Pittsburgh is meaningfully higher than the state baseline. It does not affect your loan; it affects your returns. Model it.
Investment Property Terms
- Down payment: 20–25 percent typical, better pricing at 25 percent and above
- Credit: 620 floor at most investors; real improvements at 680, 700, 740
- Reserves: 6–12 months PITIA, often with additional reserves per financed property already owned
- Prepayment penalties: common on investment property, typically 1–3 years, often buyable at a quarter to a half point
Compare with our purchase loan options and refinance loan options.
1099 or DSCR?
Use DSCR on Philadelphia and Pittsburgh rowhouse and multi-unit inventory, where rent-to-price ratios genuinely support it these are among the better DSCR markets in the Northeast.
Use a 1099 loan in the higher-priced suburban counties where ratios tighten, on Pocono seasonal property whose annualized rent gets discounted, on anything below a DSCR investor’s loan minimum, on properties needing work before they rent, or where a fragmented local tax rate has sunk the ratio.
If you already hold Pennsylvania rentals, a DSCR refinance works well on the urban multi-unit stock.
Questions to Ask
- For a Pocono property do you require written HOA confirmation of short-term rental permissibility, and what form?
- Do you qualify on gross 1099 income, or apply an expense factor?
- Part of my income is grant or research income does that qualify, and how?
- What is the actual combined tax rate for this municipality and school district?
- Does the legal unit count on this rowhouse match the deed and appraisal?
- Can you quote DSCR on the same property?
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Disclaimer
The lenders described on this page are listed in no particular order. Select Home Loans appears first because we publish this page and originate these loans; we have a commercial interest in this category. No lender listed has paid for placement.
This page reflects our opinion based on publicly available information at the time of writing. It is general information, not a recommendation, an endorsement, or an offer of credit. Lender programs, guidelines, licensure, pricing, and availability change frequently and without notice, and nothing here guarantees that any lender is currently licensed in Pennsylvania, currently offers the program described, or will approve your file.
Nothing here is legal advice. Community association governing documents, municipal ordinances, rental licensing, and tenant law obligations carry real consequences and should be reviewed with a Pennsylvania attorney and confirmed in writing with the relevant association or authority. Consult a licensed mortgage professional and where appropriate a tax advisor, attorney, or financial advisor before making any borrowing decision. Verify any lender’s licensure through NMLS Consumer Access at nmlsconsumeraccess.org.
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