Maryland Rowhouse DSCR Loans for Baltimore-Style Rentals

Rowhouse DSCR Loans for Maryland Rental Investors

TL;DR

Rowhouses are Maryland's signature rental, and a DSCR loan can finance one on its rent rather than your income when it is non-owner-occupied and habitable. The rowhouse-specific issues are older systems that affect insurance, minimum loan sizes on low-priced houses, shared walls and roofs, and the licensing and lead rules that apply to most of the stock.

Why rowhouses need their own playbook

Maryland has one of the largest concentrations of attached rowhouses in the country, especially in Baltimore City, and also in older parts of Baltimore County, Frederick, Hagerstown, Cumberland and Annapolis. Many were built before 1940 with brick party walls, flat or low-slope roofs and narrow footprints. A renovated rowhouse can be an efficient rental: compact, durable, and close to transit and jobs.

Underwriting looks closely at condition. Appraisers want comparable sales and rents from the same blocks, because two rowhouses with the same floor plan can be worth very different amounts a few streets apart. Insurance carriers look at roof age, wiring, plumbing and heating. A house that is habitable and well maintained is much easier to finance than one with deferred maintenance.

Rowhouse checklist before you apply

Loan size. Some lenders set minimum loan amounts; very inexpensive rowhouses can fall below them. Share the price early.
Roof and party walls. Shared roofs and walls can complicate repairs and insurance. Know the roof age.
Systems. Updated electrical, plumbing and heating help with both insurance and the appraisal.
Licensing and lead. In Baltimore City, plan for the rental license inspection and lead registration. See the lead-paint guide.
Ground rent. Older Baltimore-area rowhouses can be subject to ground rent; read the ground rent guide.

Buy, renovate, then refinance

Many rowhouse investors buy with short-term rehab money, renovate to a standard that passes licensing, lease the house and then refinance into a long-term DSCR loan. The DSCR vs. hard money comparison shows how the two loans fit together, and the Baltimore City page covers local context.

Questions Maryland investors ask

Can I get a DSCR loan on a Baltimore rowhouse?

Often, yes, if it is habitable, leasable, non-owner-occupied and meets the lender's minimum loan amount and property standards.

Does ground rent stop a rowhouse DSCR loan?

Not necessarily. The title company identifies the ground lease, and the lender decides how it must be handled. Some owners redeem the ground rent.