| Purpose | Investment rental property review |
| Local focus | Recurring taxes and transfer costs belong in separate budgets |
| Availability | Varies by state, property, lender and program |
A debt service coverage ratio (DSCR) loan uses rental income to evaluate an investment property under the selected lender's rules. For rental property in Pennsylvania, this guide focuses on recurring taxes and transfer costs belong in separate budgets. Start with the local records below before relying on a projected loan payment.
Recurring taxes and transfer costs belong in separate budgets
Pennsylvania's realty-transfer-tax guidance explains that county recorders collect the state tax, often with an additional local transfer tax. Those acquisition costs are different from annual property taxes. Ask for a settlement estimate and a recurring expense estimate separately; a rental can support a payment while still requiring more cash to acquire than expected.
State reference: Pennsylvania Department of Revenue: realty transfer tax.
Documents and questions for this property review
Ask the closing professional for transfer-related charges and other acquisition costs on a settlement estimate. Obtain the separate recurring property-tax accounts for the collateral. Compare the required cash to acquire the property with the continuing operating budget, so a favorable DSCR does not hide an unfunded closing requirement.
A property review example
Hypothetical planning example, not a completed transaction. A Pittsburgh investor focuses on a property's rental coverage and overlooks transfer charges in the cash-to-close calculation. Obtain the title or settlement estimate early and identify which party pays each item under the agreement. Evaluate the loan's ongoing affordability separately from whether enough verified funds remain for closing and reserves.
Does a passing DSCR prove I have enough cash to close?
No. Acquisition charges, required funds and reserves are separate from the recurring coverage calculation.
Connect local costs to the DSCR calculation
Many residential rental programs divide qualifying monthly rent by the full housing payment, including principal, interest, taxes, insurance and applicable association dues. Confirm the selected program's formula and accepted rent evidence. Keep vacancy, management, maintenance and capital work in a separate operating budget: meeting a lender's ratio does not establish profitability. Use the DSCR Program Calculator and read the full DSCR qualification guide for the broader framework.
Request a property scenario review
Stonehaven Lending is a mortgage brokerage arranging business-purpose DSCR financing nationwide, with availability varying by state, property, lender and program. Request a DSCR review with the property location, legal unit count, intended use, purchase or refinance goal and available rent and expense records.