Can I get a 30 year loan in PA?

Question

I'm new to the state of Pennsylvania and searching for a rental property in the state. I'd really like to have a 30 year mortgage (or close to 30). Do any banks in Pennsylvania offer a 30 year mortgage option for my first rental?

Thank you!

Steve Babiak · Answer

The sort of lender who does this type of loan is called "portfolio" because they keep the loan in their own loan portfolio and don't sell the loan off in the secondary market.

Tell them you have a multi-member LLC that is seeking a loan for a rental property, and would like to speak with a loan officer. Then ask the loan officer what sort of terms they offer on loans for rental property owned by an LLC. Then listen. If you tell them you are looking for 30 year fixed rate right up front, they might be short and tell you no and you won't learn as much. It might be that you can't find a 30 year term, but 20 or 25 might be out there so you want to learn what is available in case you have to settle for that. And after they have told you what they have, you can ask if they are willing to consider longer term if you pay points; and ask if they are aware of any lenders that might have longer term fixed rates once you have pretty much got everything explained that they offer.

Steve Babiak · Answer

@Chris K. - it is available to all qualified investors for 1 to 4 units residential (no store fronts or mixed use), but limited to locales where they are willing to do loans. Portfolio product, with LLC borrowers acceptable.

Steve Babiak · Answer

There is one other thing to ask to see if you can get a lower interest rate - sometimes a lower rate is offered if the mortgage is paid by ACH direct debit, and usually the lender wants that to come from a checking account from their bank to get a lower rate. It usually isn't much, say 1/8 or 1/4 point, but it can't hurt to ask.

This can also work to get a lower rate with HELOCs and home mortgages too.

John D. · Answer

+1 @Marty Gold

Good process @Steve Babiak

Steve Babiak · Answer

Since you are buying under the LLC from the sound of things, you need a portfolio lender willing to do so. Most of them won't do 30 year fixed rate loans - but there are some that do; I would give the name of one that I know of, but you are located outside of their lending footprint. I suggest you call all the local smaller banks and credit unions to see if any are willing to do what you seek; make enough calls and you could find that needle in the haystack. Be aware that you will have to be prepared for all LLC members to offer a personal guarantee.

Chris K. · Answer

@Steve Babiak

Very interesting! Is that a standard product that they offer to all investors?

Steve Babiak · Answer

@Chris K. - Harleysville Savings Bank does offer a 30 year loan for LLC borrowers.

Chris K. · Answer

@Marty Gold

To add to what other posters have already said, I never met a lender offering a 30 year note for a LLC. Just based on my experience representing both national and community banks, most lenders prefer 15 to 20 year notes. Most of them will have a balloon on year 10 or 15. Once in a while, you can find unusual loans but getting them is tricky without established relationship with the lender.

Good luck!

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.

Marty Gold · Answer

Amazing.  So helpful.

Thank you !

Can I get a 30 year loan in PA?

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