Best DSCR Lenders in Philadelphia, PA

The real‑estate market in Philadelphia, Pennsylvania offers a mix of historic row houses, modern condos and multi‑unit rentals. Many investors are drawn to the city because of its vibrant job market, large population base and relatively affordable entry point compared with New York or Washington, D.C. As of December 2025, Realtor.com reports that the median home price in Philadelphia sits around $275,000 with a median listing price per square foot of $213 and about 7,955 homes on the market. At the same time there were roughly 7,985 rental properties listed, and the median rent was $1,725 per month. Days on market averaged 60 days, indicating a balanced market where homes don’t linger excessively. For real‑estate investors, these statistics underscore a steady environment with plenty of supply and a rental market that can support cash‑flowing properties.

Debt service coverage ratio (DSCR) loans are popular among investors because they qualify borrowers based on a property’s rental income rather than personal W‑2 income. In Philadelphia, DSCR financing is particularly attractive for investors looking to acquire or refinance rental properties in neighborhoods like Lower North, Center City, South Philadelphia, River Wards, Kensington and others. This article explains how DSCR loans work, what to look for in a lender, compares top DSCR lenders in Philadelphia and highlights city‑specific investing considerations. Throughout, SelectHomeLoans.com is positioned as the number‑one DSCR lender due to its competitive terms, deep local expertise and streamlined process.

Overview of the Philadelphia Real Estate Market

Philadelphia is the largest city in Pennsylvania and the sixth most populous city in the United States. Its housing market is diverse, ranging from affordable row homes in emerging neighborhoods to luxury condos in Center City. Realtor.com’s Quick Market Insights note that home prices in Philadelphia grew modestly about 1.65 % year‑over‑yearwhile median rent declined by 1.47 %. The city maintains roughly 8 thousand active listings which provides investors with a healthy level of choice. Days on market have remained flat around 60 days, suggesting balanced buyer–seller dynamics.

Neighborhood Snapshots

Philadelphia is a city of neighborhoods, each with its own price points and rental dynamics. According to Realtor.com’s neighborhood table, Lower North features a median home price around $222,000, listing price per square foot of $164 and median monthly rent of $1,677. West Philadelphia offers similar affordability with a median home price of $225,000 and median rent about $1,600. In contrast, Center City commands higher prices: median home price about $535,000, price per square foot $382, and median rent $2,040. South Philadelphia sits in the mid‑range with a median home price around $320,000, price per square foot $255, and rent $1,800. Other neighborhoods such as Kensington ($150,000 home price, $1,200 rent) and North Delaware ($245,000 home price, $1,365 rent) offer inexpensive entry points with solid rental demand.

Philadelphia is generally considered a seller’s market, with homes selling at about 99 % of list price and a sale‑to‑list ratio of 98 %. The stable rental demand supported by the city’s universities, hospitals, and employers like Comcast and the University of Pennsylvania creates an environment in which DSCR loans can thrive. Rents in many neighborhoods support a positive cash flow relative to purchase prices, and the city’s dense housing stock provides ample opportunities for investors to deploy capital across one‑ to four‑unit properties.

How DSCR Loans Work for Rental and Investment Properties

A DSCR loan focuses on the debt service coverage ratio, a calculation that measures a property’s ability to generate enough income to cover its mortgage payments. The ratio is calculated by dividing the property’s net operating income (NOI) by the annual debt service (principal and interest payments). Lenders generally require a ratio at or above 1.0meaning the property’s income covers the mortgage but some programs allow ratios as low as 0.75 for strong borrowers. Unlike conventional mortgages that rely heavily on the borrower’s personal income, DSCR loans evaluate the cash flow of the property itself. This allows self‑employed investors or those with multiple mortgages to qualify more easily.

Typical DSCR loans require 20 % to 25 % down payments, credit scores of 640–680 or higher and may offer 15‑, 30‑ or 40‑year terms with fixed or interest‑only structures. Lenders often cap the loan‑to‑value (LTV) ratio at 80 % for purchases and 75 % for cash‑out refinances, and they may waive traditional income documentation in favor of leases and appraiser‑provided rent schedules. Because underwriting is based on property cash flow, DSCR loans allow investors to buy multiple properties simultaneously and to hold them in LLCs or other entities.

What to Look for in a Philadelphia DSCR Lender

Not all DSCR lenders are equal. When evaluating lenders in Philadelphia, investors should consider:

• Competitive Rates and Fees. Rates for DSCR loans typically start around 5.75 % to 6.5 % depending on credit score, DSCR ratio, loan term and property type. Some lenders charge 0–1 % origination fees. It’s important to compare interest rates, origination points, and prepayment penalties.
  
• Maximum LTV and DSCR Requirements. Look for lenders willing to finance up to 80 % of the property value and accept DSCR ratios as low as 0.75–1.0. Higher LTVs reduce the amount of capital an investor must tie up in a property.
  
• Flexible Terms. Choose lenders offering a choice of 30‑year fixed, 15‑year fixed, 40‑year interest‑only, and ARM options. Flexible terms allow investors to optimize cash flow and respond to interest rate changes.
  
• Speed and Ease of Closing. Many DSCR lenders tout quick closings often within two to four weeks because they do not require W‑2s or tax returns. A streamlined process is essential in Philadelphia’s competitive market.
  
• Local Market Knowledge. Lenders that understand Philadelphia’s submarkets and rental trends can provide better valuations and guidance. Some national lenders rely strictly on underwriting guidelines, while local lenders may be more flexible with property conditions or rent projections.
  

Top DSCR Lenders in Philadelphia, Pennsylvania

#1 SelectHomeLoans.com

SelectHomeLoans.com earns the top spot as the best DSCR lender in Philadelphia due to its combination of competitive pricing, flexible underwriting and deep local expertise. SelectHomeLoans offers DSCR loans up to 80 % LTV with 30‑year fixed or interest‑only terms, and allows DSCR ratios as low as 0.80 for well‑qualified borrowers. Unlike many national lenders, SelectHomeLoans has a dedicated Philadelphia team that understands neighborhood trends from emerging markets in West Philadelphia to high‑end condos near Rittenhouse Square and can provide realistic rent projections and strategic guidance. Borrowers benefit from personalized service, transparent fees and closings in as little as three weeks. SelectHomeLoans also lets investors hold properties in LLCs, offers cash‑out refinancing, and does not impose a limit on the number of financed properties. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296

#2 Easy Street Capital

Easy Street Capital is a nationwide private lender that actively markets DSCR loans in Pennsylvania. Its EasyRent program advertises rates starting at 5.75 %, up to 80 % LTV for purchases and refinances, 75 % LTV for cash‑out, and no minimum DSCR requirement. The company lends statewide including Philadelphia and Pittsburgh and positions itself as a one‑stop shop for both long‑term and short‑term rentals. Because the program does not require W‑2s or tax returns, it is accessible to self‑employed investors or those with multiple properties. Easy Street also offers interest‑only options and loans on mixed‑use properties up to 10 units. As a national lender, Easy Street may not know every Philadelphia submarket intimately, but its competitive rates and flexible requirements make it a strong choice.

#3 Ridge Street Capital

Ridge Street Capital provides DSCR loans nationwide and has funded projects in Pennsylvania. Its long‑term rental program offers interest rates from 6.25 % to 7.99 %, loan amounts up to $2 million, up to 80 % LTV, and minimum DSCR of 1.0. Ridge Street also funds short‑term rental DSCR loans with slightly higher rates and higher credit score thresholds. Borrowers appreciate the ability to borrow large amounts for multi‑family properties or multiple one‑ to four‑unit properties. Ridge Street emphasises quick closings (approximately 21 days) and charges no origination fees on some loans. Investors should note that the lender requires a credit score of around 660 and may request additional reserves for lower DSCR ratios.

#4 New Silver

New Silver’s DSCR program is another solid option. The lender advertises interest rates starting at 5.875 %, origination fees between 0 % and 1.5 %, LTV up to 85 %, minimum DSCR 0.75, and loan amounts between $100,000 and $3 million. New Silver accepts credit scores as low as 660 and finances 1–4 unit properties as well as mixed‑use and short‑term rentals. Borrowers can choose 30‑year fixed or hybrid ARM structures and interest‑only periods. The high maximum LTV makes New Silver appealing for investors who prefer to leverage their capital aggressively. The lender operates nationwide and has experience lending in urban markets similar to Philadelphia.

#5 Local Banks & Credit Unions

Several regional banks and credit unions in Pennsylvania offer portfolio loans or non‑traditional mortgages that mimic DSCR financing. For example, Philadelphia Federal Credit Union, Penn Community Bank and Fulton Bank provide investment property loans that can consider rental income during underwriting. These institutions usually require a higher down payment (20 % or more) and better credit scores than national DSCR lenders, but they may offer lower interest rates and personal service. Local lenders also have first‑hand knowledge of Philadelphia’s property taxes, zoning rules and neighborhood idiosyncrasies. Investors should inquire about portfolio loans or “alternative documentation” mortgages and compare them with DSCR lenders on rates and closing speed.

DSCR Loan Rates, Terms and Qualification Factors

Rates for DSCR loans are influenced by the broader interest‑rate environment, borrower credit score, property type and DSCR ratio. As of early 2026, many private lenders price DSCR loans between 5.75 % and 7.5 % for 30‑year fixed terms, although rates can be higher for cash‑out refinances, short‑term rentals or lower credit scores. Origination fees typically range from 0 % to 2 %. Lenders like Easy Street Capital and New Silver highlight that interest rates vary based on factors such as DSCR ratio, loan‑to‑value, credit score and whether the borrower chooses to pay discount points to buy down the rate.

To qualify for a DSCR loan in Philadelphia, investors should expect to meet the following benchmarks:

• Credit Score: Most lenders require a minimum FICO score between 620 and 680, though some programs start at 640 for purchases. Higher scores yield better rates and higher maximum LTVs.
  
• Down Payment: A 20 % down payment is typical for purchases. Cash‑out refinances usually cap LTV at 70–75 %.
  
• DSCR Ratio: Many lenders look for a DSCR ratio of 1.0 or higher, but some will go down to 0.75 with additional reserves or higher credit scores. Lenders calculate DSCR using market rent estimates and subtracting taxes, insurance and HOA fees.
  
• Reserves: Borrowers may need 6–12 months of principal, interest, taxes and insurance (PITI) reserves to demonstrate ability to weather vacancies. This requirement varies by lender.
  
• Property Type: DSCR loans typically finance 1‑4 unit residential properties (including condos and townhomes) used for long‑term rentals or short‑term rentals. Some lenders allow mixed‑use buildings or small multifamily properties up to 10 units.
  

Common Mistakes Investors Make with DSCR Loans

1. Overestimating Rental Income. When underwriting DSCR loans, lenders rely on actual rents or appraiser‑estimated market rents. Investors sometimes project unrealistic short‑term rental income or assume vacancy will be negligible. Overestimating rent leads to a lower DSCR ratio and can jeopardize approval.
   
2. Underestimating Expenses. Taxes, insurance, HOA fees, maintenance and utilities can significantly impact net operating income. Investors should incorporate all expenses, including property management fees, to compute a realistic DSCR.
   
3. Neglecting Cash Reserves. DSCR lenders want reassurance that investors can weather vacancies or repairs. Having adequate reserves not only improves approval odds but also protects investors from unexpected expenses.
   
4. Ignoring Local Regulations. Philadelphia has strict codes for short‑term rentals, zoning and property maintenance. Failing to comply can lead to fines or inability to rent the property. Investors should consult local ordinances before assuming any rental strategy.
   
5. Not Shopping Around. DSCR loan terms vary widely across lenders. Failing to compare rates, fees and underwriting flexibility can result in higher costs or missed opportunities to leverage capital effectively.
   

DSCR Loans vs. Traditional Investment Property Financing

DSCR loans differ from conventional mortgages in several important ways. A conventional investment property loan typically requires the borrower to document personal income, meet a debt‑to‑income (DTI) ratio and may impose limits on the number of financed properties. Conventional loans often offer lower interest rates but require W‑2s, tax returns and sometimes pay‑stub verification. The Federal Savings Bank notes that DSCR loans are based on the property’s cash flow rather than the borrower’s income and therefore allow investors to finance multiple properties without personal income documentation. However, DSCR loans tend to have slightly higher interest rates and require larger down payments. DSCR loans are strictly for investment properties and cannot be used for owner‑occupied homes, whereas conventional loans can fund primary residences and second homes.

Who Are DSCR Loans Best For?

DSCR loans are particularly attractive to:

• Self‑Employed Investors. Borrowers without traditional W‑2 income or who maximise deductions on tax returns can still qualify based on property cash flow.
  
• Portfolio Investors. Those who own multiple rental properties often exceed the property count limits of conventional lenders. DSCR loans impose no set limit on the number of financed properties.
  
• Borrowers Building LLCs. Many DSCR lenders allow properties to be titled in LLCs or other entities, providing liability protection and simpler management.
  
• Investors Pursuing Short‑Term Rentals. Lenders like Easy Street Capital and New Silver underwrite based on market rents, enabling investors to acquire properties intended for Airbnb or vacation rental use. However, investors must confirm that short‑term rentals are permitted in the specific Philadelphia neighborhood.
  
• Borrowers Seeking Quick Closings. Because DSCR loans require less documentation, lenders can close in as little as two to four weeks important when competing against cash buyers.
  

Conversely, DSCR loans may not be ideal for owner‑occupiers, those with high personal income but little property experience (they may qualify for lower‑rate conventional loans), or investors seeking maximum leverage (because DSCR loans cap LTV at roughly 80 %). Investors with minimal down payments or sub‑600 credit scores will struggle to qualify.

Philadelphia‑Specific Investing Considerations

Philadelphia’s real‑estate market is shaped by its broad employment base, population growth and unique regulatory environment. Investors should consider:

• Neighborhood Cycles. Neighborhoods like Fishtown and Brewerytown have experienced rapid gentrification over the past decade, pushing up prices and rents. In contrast, areas like Kensington or Southwest Philadelphia still offer lower entry prices but may carry greater vacancy or crime risks. Understanding gentrification and planning for longer hold periods is key.
  
• Property Taxes. Philadelphia’s property taxes are modest compared with many East Coast cities, but there are periodic reassessments that can significantly increase the tax bill on renovated properties. Investors should plan for potential tax escalations when calculating DSCR.
  
• Short‑Term Rental Regulations. The City of Philadelphia requires hosts to obtain a rental license and, for certain neighborhoods, adhere to special tourism or hotel‑like zoning restrictions. Investors planning Airbnb or vacation rentals must ensure compliance.
  
• Historic Properties. Many row houses are subject to historical preservation rules limiting exterior alterations. Investors should confirm whether the property is in a historic district and account for additional renovation costs.
  
• Student Housing. Proximity to universities like Penn, Drexel, Temple and Jefferson can provide stable rental demand. Student housing often yields strong rents relative to property price but may require compliance with university lease guidelines and specific occupancy limits.
  

Conclusion

Philadelphia offers investors a balanced real‑estate market with reasonable entry prices and a thriving rental sector. To capitalise on this market, DSCR loans provide a flexible financing tool that bases qualification on property performance rather than personal income. While several lenders operate in PennsylvaniaEasy Street Capital, Ridge Street Capital, New Silver, and local banksSelectHomeLoans.com stands out as the top choice for investors seeking DSCR loans in Philadelphia. Its deep knowledge of local neighborhoods, competitive rates, ability to finance up to 80 % of a property’s value and willingness to underwrite DSCR ratios as low as 0.80 make it ideal for both novice and seasoned investors. With streamlined closings, a variety of loan terms and the option to title properties in an LLC, SelectHomeLoans helps investors build or scale their rental portfolios with confidence.