If you are seeking financing in Pennsylvania, it is imperative to have a solid understanding of DSCR loans. These loans, also referred to as Debt Service Coverage Ratio loans, evaluate your capacity to generate sufficient income for debt payments.

Undoubtedly, DSCR loans are an indispensable resource for individuals and businesses aiming to obtain funding in Pennsylvania - and Visio Lending is one of the best lenders for DSCR loans throughout the nation. We provide highly attractive DSCR mortgage rates, convenient loan terms, and approval based on the property's ability to satisfy its debts - not income verification.




Why Build Your Real Estate Portfolio With Pennsylvania DSCR Loans?

When looking for investment property, real estate investors have a plethora of options throughout the country; however, Pennsylvania offers unique investment opportunities that can't be find anywhere else thanks to its attractive positioning, strong inventory demands, and steady growth.

Steady Economic Development

While Pennsylvania isn't a superstar in terms of economic growth, it has made modest gains in the past few years, above the national average.

Unemployment is low, and new investments into its manufacturing industry by state and federal entities have helped to improve its capacity. It's expected to add 80,000 jobs in the next few years, giving renters multiple job opportunities to ensure they'll be able to pay every month's rent.

High Tourism

For potential borrowers who would like to open condo hotels, you're in luck! Tourism is Pennyslvania's second largest industry, and it's not hard to see why: beautiful sites like Lancaster County and the rich historical heritage of Philadelphia make it a hot tourist destination, particularly in the summer months.

The tourism industry supports over 450,000 jobs and has an overall economic impact of over $66 billion per year, making anything travel-adjacent a wise decision in terms of investment property. 

Landlord-Friendly Legislation

Statewide Pennsylvania law doesn't have rent controls, meaning that you can boost your rental income without concern of running afoul of the law. Landlords can also bring suit in the Philadelphia Municipal Court due to failure to pay, where there is no limit to the money judgment that they can be awarded.

You can even due a tenant if they did not provide an adequate security deposit or caused excessive damage. This means that your investment property is well protected against potential damage by renters, offering you immense peace of mind.

How Does the DSCR Loan Work?

DSCR loans operate by evaluating your property's capacity to produce sufficient income for debt service payments. This evaluation is based on the Debt Service Coverage Ratio, which compares the property's operating income to the annual debt service payment.

Utilizing this calculation, a DSCR lender can determine whether or not a real estate investor has enough cash flow from your property to cover your loan obligations.


Qualification Criteria for a DSCR Loan: Pennsylvania

Here are some key eligibility criteria for DSCR loans in Pennsylvania that real estate investors should consider.

Credit Score

It is crucial to have a strong credit score in order to qualify for a DSCR loan in Pennsylvania. Your credit score serves as an indicator of your financial responsibility and reliability.

Lenders typically prefer a minimum credit score of 640, ensuring that you have displayed consistent capability in managing your finances and meeting debt obligations punctually.

Property's Net Operating Income

When applying for a DSCR loan in Pennsylvania, it's important to note that lenders take into account not only your credit score but also the net operating income (NOI), which include mortgage payments as well as principal and interest payments.

NOI is the property's rental income minus its operating costs; in other words, it identifies whether your property is generating positive cash flow after it has satisfied its mortgage payment and other operating expenses.

Lenders typically set a minimum requirement for net operating income, which should at least meet or exceed the annual debt service payment on the loan. A strong NOI increases your chances of securing approval for your DSCR loan application.


As with traditional loans, a mortgage lender will approve a DSCR loan based partially on the average value of the property. Many lenders may request two appraisals of the rental property, though some may only need one.

Rent Schedule

You'll also need to prove the rental income through a rent schedule, which shows the average rent and the property's rental history. This will be used to calculate the DSCR, which is the primary component of a DSCR loan.

DSCR Ratio

The debt service coverage ratio is closely tied to the NOI, as it shows that the subject property is making enough to satisfy the mortgage.

To calculate DSCR, you divide rental income by PITIA (principal, interest, taxes, insurance, and association dues); a number above 1 shows that you have positive cash flow, while below 1 means that you're losing money.

Most lenders prefer a minimum DSCR of 1.25 or more before they will approve your DSCR loan, but you should strive for as high of a ratio as you can achieve based on market rent.

Loan-to-value (LTV)

When DSCR lenders in Pennsylvania review DSCR loan applications, they also take into account the loan-to-value ratio. This ratio compares the amount of the loan to the appraised value of the home or rental property. Lenders have a preference for lower loan-to-value ratios, as it signifies less risk for them as lenders.

Your LTV determines the size of your down payment, which will be between 20% and 30%. You should also expect to pay closing costs just as you would for a traditional loan. 



Appealing a Denied DSCR Loan Application

When it comes to securing a DSCR loan in Pennsylvania, meeting the qualification requirements is crucial. The Debt Service Coverage Ratio plays a vital role in determining loan eligibility, so it's essential to have a clear understanding of the qualifications and ensure that they are met accordingly.

If you believe your application was wrongfully denied, there may still be avenues to challenge the decision. By presenting compelling evidence such as updated financial statements or a comprehensive strategy to boost cash flow, you have the opportunity to bolster your case and improve the chances of having your loan application reevaluated.


Best Spots for a DSCR Loan: Pennsylvania

If you're considering real estate investment in Pennsylvania, there are multiple cities that present promising opportunities for financial gain using DSCR loans. Here are a few options to explore.

📍 Philadelphia

Philadelphia's real estate market has been thriving in recent years, making it an appealing choice for investors. Neighborhoods such as Old Town, University City, and Fishtown have witnessed substantial growth in property values and rental demand.

The average home value in Philadelphia is $221,032, which is a slight drop year-over-year. However, high rental income more than makes up for this: the price of an apartment is up nearly 21%. The median cost of an apartment is $1,795.

📍 Pittsburgh

Pittsburgh is another city in Pennsylvania that offers great potential for real estate investment. With its booming technology and healthcare sectors, Pittsburgh has experienced steady population growth and a strong rental market.

The average Pittsburgh home is worth $229,643, while the average rent across all residential properties is $1,417. Commercial real estate investors can rejoice at the rents of $24 per square foot for retail and office rental property.

📍 Harrisburg

Harrisburg, the capital of Pennsylvania, is a compelling choice for real estate investment. Even as the national market slows down, Harrisburg stands out with stable or even increasing rental prices.The recent data shows that the median rent in Harrisburg has increased by a significant 6% compared to last year, reaching $1,009.

Two-bedroom apartments have also seen a rise of 3%, with an average price now at $1,390. On the other hand, one-bedroom apartment rents have remained stable and did not change from their current level. This upward trend indicates strong demand and potential for investment opportunities in the rental market of Harrisburg.

📍 West Chester

West Chester is a hidden gem in Pennsylvania when it comes to real estate. With its charming downtown area, top-ranked schools, and proximity to Philadelphia, West Chester offers a desirable location for real estate. As of December 2022, the real estate market in PA is experiencing above-average home values ranging from $49,000 to as high as $4.2M.

In West Chester specifically, the median home value stands at an impressive $564,884, according to Zillow data. This indicates a strong investment opportunity with the potential for favorable returns on properties in this area for real estate investors. 



Closed DSCR Loans Pennsylvania

Check out some of Visio Lending's recently closed DSCR loans in Pennsylvania.


  Pittsburgh, PA


  Pittsburgh, PA

  • $252,000 Loan Amount
  • Purchase
  • STR 
  • DSCR: 2.64
  Pittsburgh, PA2


 Pittsburgh, PA

  • $186,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.32
Gouldsboro, PA


 Gouldsboro, PA

  • $212,000 Loan Amount
  • Purchase
  • STR
  • DSCR: 2.18

Frequently Asked Questions about Debt Service Coverage Ratio Loans in Pennsylvania

To be considered for DSCR loans in Pennsylvania, it is crucial that a real estate investor meet specific criteria.


These requirements typically entail having a robust DSCR, demonstrating consistent and reliable cash flow, reducing current debts as much as possible, and emphasizing favorable property characteristics like a good rental or lease agreement.


However, potential borrowers should be aware that you cannot use DSCR loans for a primary residence, only commercial property. Single-family homes that are to be rented are acceptable, but not those that the borrower will live in.

There are a variety of different ways that you can improve your chances of being approved for this unique loan type, which include the following:

  • Get familiar with the local real estate market through comprehensive research.
  • Improve the property's ability to generate sufficient cash flow by increasing rents according to market values.
  • Develop cash reserves that will be sufficient to cover your mortgage payment should you fall on hard times.

To enhance your chance at DSCR loans, there are several crucial actions you can undertake to be approved by a DSCR lender. Firstly, prioritize the growth of your property's operating income by implementing efficient cost-saving strategies and maximizing rental rates. Furthermore, reducing your current debt will also contribute to stronger DSCR loans.

DSCR loans have several lenders, including banks, financial institutions, and banks. It is possible to use them for various purposes, including buying or refinancing of investment properties, the building of new investment properties as well as the restoration of existing properties.

A property DSCR is calculated by multiplying its net operating profit (NOI) with its total debt service. Those numbers indicate the ability of the property to generate enough money to cover its underlying liabilities.

map of pennsylvania

Our DSCR Loans in Pennsylvania have:

  • · Full 30 year terms, no balloons for rental residential properties

  • · The ability to finance in an LLC

  • · No tax documents or personal income verification

  • · Real estate investor-friendly loan programs

  • · Interest only loan options


Contact Us to Start Your Loan