Investment Property Loans in Philadelphia, PA

Lenders classify a home as an investment property when you rent it out or hold it for income rather than living in it. That label shapes everything from the documents you provide to the pricing you see. If you are shopping for a rental in Pennsylvania, comparing the main loan types side by side helps you call a Philadelphia loan officer with a clear question instead of a vague one.

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Call to speak with a licensed loan officer about investment property loans for a property in Philadelphia. Programs vary by borrower, property and investor.

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Investment property lending in Philadelphia County

4,644Loans on investment properties in Philadelphia County (2024)

20.3%Share of all home loans

$185,000Median investor purchase loan (2024)

$1,400Median gross rent

Lenders made 4,644 loans on investment properties in Philadelphia County in 2024, 20.3% of all home loans there. The median rent in Philadelphia is about $1,400 a month. Whether a conventional investment loan, a DSCR loan or a portfolio loan fits usually comes down to how you document income and how many properties you already finance.

Matching the loan type to your situation

A quick way to sort the menu is to ask three questions. Can your tax returns carry one more payment along with your other debts? Is the home ready to rent as it stands? How many mortgages do you already have?

Yes, yes and only a few usually points to a conventional investment loan. A no on the first question points toward DSCR. A no on the second may point to hard money or a renovation-friendly portfolio lender, with a later refinance. A long list of mortgages often points to DSCR or portfolio. These are starting points for a talk with a loan officer serving Philadelphia, not a decision.

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Prefer to talk first? Call (888) 865-8230. Applying is not a loan approval or commitment to lend; programs vary by borrower, property and investor. ClearPoint Mortgage Advisors, NMLS #173855. Properties in FL, NY, NJ, PA, CT and VA only.

Investment, second home or primary residence: getting the label right

Lenders sort every home by how you will use it. A primary residence is where you live most of the time. A second home is one you use yourself for part of the time, that is not rented full time and is not a timeshare. An investment property is rented out or held for income.

The label drives the loan type, the pricing and the documents. Pick the one that matches your real plan for the Philadelphia property. Misrepresenting occupancy on a loan application is mortgage fraud, and lenders verify it after closing. If your plans may change, explain them to the loan officer before you apply.

Who this tends to fit

You are weighing a conventional loan against a DSCR loan
You plan to buy in your own name or through an LLC
The home you want needs work before it can be rented
Your tax returns may or may not support another mortgage
You are buying your first rental and want to compare every route

Philadelphia offices and Pennsylvania rules for investors

Rental registration: Rental License (plus Certificate of Rental Suitability) (Department of Licenses and Inspections). Long-term landlords need a BIRT number, a Commercial Activity License (or Activity License Number for small owner-occupied buildings), zoning approval, proof of legal occupancy, and a Rental License naming a local managing agent. New tenants must receive a Certificate of Rental Suitability issued by L&I, and owners must meet lead-safety certification rules. Lenders and insurers may ask whether a rental is registered.
Property assessment: Office of Property Assessment (OPA); Homestead Exemption applications handled by the Philadelphia Department of Revenue. Owner-occupants apply for the Homestead Exemption with the Department of Revenue online through the Philadelphia Tax Center, by phone through the Homestead Hotline, or by mailing a paper application.

Pennsylvania landlord-tenant law: The Landlord and Tenant Act of 1951. Pennsylvania's main landlord-tenant statute, covering leases, recovery of rent, security deposit (escrow) rules, and recovery of possession. Leases you show a lender should follow it.

How lenders in Philadelphia count rental income

How rent is counted depends on the loan type. On a conventional investment loan, lenders often use the rent shown on your tax returns for homes you already own and, for the home you are buying, a signed lease or an appraiser's market rent estimate on Fannie Mae Form 1007. Only part of that rent may be counted, to allow for vacancy and upkeep.

On a DSCR loan, the rent is compared with the full housing payment instead of being added to your personal income. Short-term rental income may be treated differently from a standard lease, depending on the program. Ask the loan officer exactly which rent figure each option will use.

Before you call

Leases on any rentals you already own
Your last two tax returns, including Schedule E if you own rentals
A list of every mortgage you carry
A clear statement of how you will use the property
Bank statements showing funds for the down payment and reserves

Questions Philadelphia investors ask about investment property loans

Is a conventional loan or a DSCR loan more common for a rental in Philadelphia?

Both are widely used. A conventional investment loan follows agency rules and qualifies you on your full income, so it often suits borrowers whose tax returns are strong. A DSCR loan qualifies mainly on the property's rent, which often suits self-employed investors and LLC buyers. Pricing and terms vary, so compare written offers for both.

What counts as an investment property for a loan?

A home you rent out or hold for income rather than live in. Lenders separate it from a primary residence, where you live, and a second home, which you use some of the time and do not rent full time. The category affects pricing, documents and the down payment. Be accurate: misrepresenting occupancy on a loan application is mortgage fraud.

When does hard money make sense for a rental purchase?

Hard money is short-term, asset-based financing, usually used when a home needs work or a deal has to move faster than a bank can. It costs more in exchange for speed and flexibility and is usually a business-purpose loan. Most investors use it as a bridge, planning to refinance into a longer-term loan or sell.

What if I want to live in one unit and rent the others?

If you will live in one unit of a two- to four-unit building, the loan is usually an owner-occupied loan, not an investment property loan. Owner-occupied purchase, FHA and VA loans are other options in that case. Tell the loan officer your real plan, because occupancy shapes which programs you may be eligible for.

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Get answers about investment property loans for a property in or around Philadelphia. Subject to credit approval; programs vary.