Our Pennsylvania DSCR loan page has the statewide lease, deposit and closing rules. If you are still choosing a city, our best Pennsylvania cities for rental property post scores eight markets outside Philadelphia. Here we stay inside the city line and the four Pennsylvania counties around it.

Every figure was checked on November 11, 2026 against HUD User's FY2027 Fair Market Rents, Census Bureau QuickFacts, the City of Philadelphia and the Pennsylvania Department of Revenue.

One Rent for Five Counties

Philadelphia shares one HUD rent with Bucks, Chester, Delaware and Montgomery counties, and it rose at every bedroom size for FY2027.

HUD's Philadelphia Camden Wilmington area spans four states: the five Pennsylvania counties plus Camden, Burlington, Gloucester and Salem in New Jersey, New Castle in Delaware and Cecil in Maryland. So a row house in Kensington and a split level in Upper Darby screen against the same benchmark.

The bump is small, about 2% on the three bedroom. It will not rescue a deal that did not work last year, but it does not hurt one either, which is more than investors in Reading or Erie can say this year.

City and Suburb Prices

The city is the cheapest place to buy in the region by a wide margin, and it is roughly half renters.

The Census median gross rent mixes every lease in town, from old studios to new builds, so it sits far below HUD's three bedroom figure. Neither number is your rent. Your rent is what three bedroom comps on your block lease for today.

The City Tax Line

Philadelphia's real estate tax is a flat 1.3998% of the assessed value, which makes the tax line easier to price than almost anywhere else in Pennsylvania.

The city splits it as 0.6159% for the City and 0.7839% for the School District. The city says the rate is unchanged since 2016 and stays the same for 2027. What does change is the assessment: the Office of Property Assessment mailed 2027 valuation notices this year, so the number on a listing may not be the number on your next bill. The bill is due March 31. The city's $80,000 Homestead Exemption is for a home you live in, so plan on a rental paying the full rate on the full assessment.

On a $243,100 house assessed at its price, that is about $3,403 a year, or $284 a month. If the new value looks high, the city's rule is that an appeal has to be filed by the first Monday in October of the year before the tax year you are appealing. For the 2027 bill that window closed in early October 2026, so a buyer today is mostly pricing the value as mailed and watching the next cycle.

Run the DSCR on your deal

The DSCR Math

At the city median, every bedroom size clears 1.00; above about $330,000, only the four bedroom does.

The setup: 25% down on a 30 year amortization at Freddie Mac's 30 year fixed average of 7.18% from November 5, 2026. That is a reference rate only, a conventional loan average, not a DSCR rate and not a rate we are quoting. Tax is 1.3998% of the price, assuming the assessment equals the price. Insurance is $1,800 a year, an example number, not market data and not a quote.

Flip it around and you get a buying rule. On these assumptions a two bedroom at the HUD rent holds 1.00 up to about $273,700, a three bedroom up to about $330,700 and a four bedroom up to about $367,400. With 30% down and interest only, the three bedroom at the median moves from 1.33 to about 1.53.

The Transfer Tax at Closing

Philadelphia's transfer tax is 4.578% of the price, the 3.578% city share plus the 1% state share, and it is cash you bring to closing.

The city says the tax is usually split evenly between buyer and seller, though your contract decides. On a $243,100 purchase the total is about $11,129, so a buyer's half is roughly $5,565. It does not touch the DSCR, because it is not part of the monthly payment. It does mean a Philadelphia purchase takes noticeably more cash than the same price in a town that charges only the state 1% plus a small local share.

City Rules Before the First Lease

Before a tenant signs, Philadelphia wants your tax accounts open, your rental approved by the city and the unit certified lead safe or lead free.

• Business accounts: the city's new landlord page says a property you do not live in needs a Commercial Activity account and Business Income and Receipts Tax filing, plus a city tax account.
• Rental approval: the city lists its prerequisites: a compliant tax account, proof of ownership, the lead certification, no open violations and the managing agent if you use one.
• Lead: landlords must test and certify the property lead safe or lead free before you sign a new or renewed lease, using an approved technician.
• Paperwork to the tenant: the Certificate of Rental Suitability, the Partners in Good Housing brochure, the lead certification, a bed bug notice and a written smoking policy.

Budget the lead test and any fix before closing, because a unit that cannot be certified cannot be leased, and a DSCR deal needs that lease.

When the Suburbs Make Sense

Delaware County still works at its median; Montgomery and Bucks only work below their medians.

With the same 25% down and reference rate, the $2,216 three bedroom rent covers principal and interest about 1.31 times at Delaware County's $332,200 median, leaving roughly $528 a month for tax and insurance. At Montgomery County's $436,700 median the rent barely covers principal and interest, and at Bucks County's $445,700 it falls short before a dollar of tax. Suburban deals need either a price well under the county median or interest only.

Loan Terms That Fit

Philadelphia prices keep most loans small, so the reserve rule and gifts do the heavy lifting.

• Reserves: none required when the loan is under $1 million and the LTV is under 75%. There is no asset sourcing, large deposit sourcing or seasoning.
• Gifts: a 100% gift can pay the down payment, the closing costs and the reserves, transfer tax included.
• Interest only runs ten years on a 40 year term or a 30 year term with interest only, at up to 70% LTV on a purchase and 65% on a cash out.
• Cash out goes up to 80% LTV with no ownership seasoning, a fit for a row house you rehab and lease up.
• New investors do not need to own a home or show a VOR. Ratios go as low as 0.50 and loans go up to $5 million.

Our interest only DSCR loan guide shows when the lower payment helps, and DSCR loan insurance shows how much premium a rental can carry. Our loan programs page lists the rest.

Where Philadelphia Deals Break

They break on the assessment, the lead test and the rent comp, not on the rate.

My Philadelphia Checklist

1. Look up the 2027 assessment for the parcel and multiply by 1.3998%.
2. Pull three bedroom comps for the block.
3. Budget your share of the 4.578% transfer tax in cash to close.
4. Line up the lead test and the city rental approval before the move in date.
5. Get a landlord insurance quote before you write the offer.
6. Send us the address. We run the DSCR the way the lender will.

Sources

All sources checked November 11, 2026. Data changes, so confirm before you rely on it.

1. HUD User, FY2027 Fair Market Rents, Philadelphia County, PA (Philadelphia Camden Wilmington, PA NJ DE MD MSA). Studio $1,438, 1 bed $1,558, 2 bed $1,860, 3 bed $2,216, 4 bed $2,445 (FY2026 $1,397, $1,520, $1,810, $2,170, $2,423); area includes Bucks, Chester, Delaware, Montgomery and Philadelphia counties, PA, plus counties in NJ, DE and MD
2. U.S. Census Bureau QuickFacts, Philadelphia city and Delaware, Montgomery and Bucks counties, Pennsylvania. Median value of owner occupied housing units, owner occupied rate and median gross rent, ACS 2020 to 2024; population estimates July 1, 2025 (V2025)
3. City of Philadelphia, Real Estate Tax. 1.3998% of assessed value (0.6159% City, 0.7839% School District); due March 31; Homestead Exemption $80,000
4. City of Philadelphia, Learn how to lower your property tax bill ahead of the 2027 valuations (July 20, 2026). 2027 valuation notices mailed; rate unchanged since 2016 and the same in 2027
5. City of Philadelphia, Realty Transfer Tax. 3.578% City plus 1% Commonwealth equals 4.578%; usually split evenly between buyer and seller
6. Pennsylvania Department of Revenue, Realty Transfer Tax. State realty transfer tax 1 percent of the value
7. City of Philadelphia, Landlord Gateway: New landlords. Business accounts for a property you do not occupy; rental approval prerequisites; lead safe or lead free certification to execute a new or renewed lease; tenant documents
8. Freddie Mac Primary Mortgage Market Survey. 30 year fixed average 7.18% as of November 5, 2026 (reference only)

Frequently asked questions