Pennsylvania DSCR Loan Helps a First-Time Investor Purchase a Student Rental
A first-time investor bought a townhome near a major Pennsylvania university that rents by the bedroom, after the original lender refused to look past a standard market rent estimate.
Loan Snapshot
- State
- Pennsylvania
- Property Type
- Townhome (Student Rental)
- Loan Purpose
- Purchase
- Loan Amount
- $290,000
- LTV
- 70%
- DSCR
- 1.11
- Days to Close
- 23
Borrower profile, generalized to protect privacy: a first-time investor who recently moved from salaried work to a commission-based role.
An actual closed transaction. Certain details have been generalized to protect client privacy.
The Situation
A first-time investor found a townhome near a major Pennsylvania university that had historically been rented to students by the bedroom. Rented that way, the property produced more income than a typical long-term lease would suggest, and the existing tenants were already in place.
Why the Bank Said No
The buyer's original lender would only underwrite to a standard market rent estimate, ignoring the existing student leases entirely. At the lower figure, the property fell outside that lender's qualifying guidelines. The borrower had also recently moved into a commission-based position, which made conventional personal income qualification harder still.
The Financing Approach
The purchase was structured through a DSCR program that permitted review of the actual leases and the property's rental history. The borrower contributed a substantial down payment, documented post-closing reserves, and took title in an LLC; the property's real income, not an averaged estimate, was measured against the proposed payment.
The Outcome
The loan closed in April of 2026, before the next student leasing cycle began. The borrower acquired his first investment property with paying tenants already in place.
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The Borrower's Challenge
The property was leased by the bedroom, but the first lender would not consider the existing student leases. The borrower had also recently started a commission-based position, making conventional income qualification more difficult.
The Loan Structure
A DSCR purchase loan closed in an LLC, underwritten on the property's actual leases and rental history rather than a standard market rent estimate, with a substantial down payment and documented reserves.
How We Solved It
Underwriting reviewed the existing by-the-bedroom leases and the property's operating history, letting the real income support the file where an averaged market estimate had failed.
The Result
The borrower closed before the next student leasing cycle and acquired his first investment property with tenants already in place.
Actual scenario; certain details have been generalized to protect client privacy. Individual results vary. This is not a commitment to lend, and past outcomes do not guarantee the terms, timing, or approval of any future loan.
Reviewed by Eddie Luhrassebi, Founder & CEO, NMLS #337071 | CA DRE #01230650
Last updated: July 16, 2026 · About the reviewer