Pennsylvania’s Non-QM
Philadelphia Pharma Bank Statement
Pocono STR
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BFF holds Pennsylvania Mortgage Lender License #107787 from the PA Department of Banking and Securities (DoBS) under Title 7, Chapter 61 (PA Mortgage Licensing Act). Four features unique to Pennsylvania in the BFF series: (1) $300,000 fidelity bond: required per FNMA/FHLMC fidelity bond guidelines; this is an employee dishonesty/internal fraud protection bond — separate from and in addition to the surety bond. Every PA Mortgage Lender must maintain this fidelity bond throughout the license period. No other state in the BFF series requires a fidelity bond at the licensing level. (2) $1,000,000 warehouse line of credit: applicants must demonstrate approval for a line of credit, repurchase agreement, or equivalent mortgage-funding capability of not less than $1,000,000 (per Title 7 §6131(c)(2)); must be maintained for the duration of the license. (3) Pennsylvania Tax Certification: every owner and officer must provide a certified memorandum confirming all PA tax obligations paid (or deferred payment plan with PA Dept. of Revenue). Applies individually to each person, not just the entity. Out-of-state owners/officers with PA-source income must verify individual PA tax compliance. (4) Bond mailing requirement: original surety bond must be uploaded to NMLS AND mailed to PA DoBS within 5 business days of NMLS application submission. Mail to: Pennsylvania Department of Banking and Securities, Non-Depository Licensing Office, 17 N 2nd Street, Suite 1300, Harrisburg, PA 17101-2290. Minimum net worth: $250,000; must be maintained at all times. No in-state office required (eliminated August 1, 2009). Renewal: December 31. PA MLO pre-licensing: 20 hours including 3 hours PA law. Criminal background check: FBI AND Pennsylvania State Police (both required; PA is one of the only states requiring both). Verify at pa.gov/agencies/dobs or NMLS Consumer Access.

The most important pre-submission step for any Pocono Mountains DSCR STR file is verifying the subject property’s HOA or community association STR rules before anything else. This is not a documentation formality — it is the single most common point of failure in Pocono DSCR STR files. Many Pocono Mountain investment properties are located within one of the region’s dozens of private lake communities and gated resort developments: Lake Naomi (Monroe County; one of the largest; community association rules vary by section and have changed over time), Pocono Mountains Club, Big Bass Lake, Lake Harmony Estates, Arrowhead Lake, Timber Trails, Locust Lake Village, and dozens of others. Each community association operates independently and may permit non-owner-occupied STRs, restrict STRs to owner-occupied properties only, or prohibit STRs entirely in certain sections or for certain property types. Monroe County (the most active Pocono investment market) is generally permissive at the county and township level — the restriction layer is in the HOA documents, not in the public zoning code. This means a standard zoning search at the county level will not reveal HOA STR restrictions. The broker must obtain the specific community’s CC&Rs and HOA rules, confirm the STR status of the subject property’s section/lot, and document this in the file before submitting. Tobyhanna Army Depot note: Tobyhanna Army Depot (Monroe County; 3,700+ employees; the DoD’s largest electronics maintenance facility) is the single largest employer in the Pocono Mountains and creates BAH-backed DSCR LTR demand in Monroe County that is often overlooked by investors focused on the STR market. VA loans for Tobyhanna personnel are also available and active in Monroe County.

Pharmaceutical consulting income normalization: Philadelphia’s Pharmaceutical Triangle produces the most distinctive consulting income pattern in the BFF Northeast portfolio. Former GSK, AstraZeneca, Merck, and Pfizer executives who start independent consulting firms typically work on 3-6 month retainer agreements with pharma companies or CROs. Income pattern: large lump-sum deposits when a new engagement begins (often a 30-60 day upfront retainer payment), then monthly retainer payments during the active project, then a gap period between projects. A 12-month bank statement may capture one large upfront project payment + two months of retainer + then nothing for three months — understating average income dramatically. 24-month bank statement normalizes two full project cycles and shows the true average. Documentation best practices: (1) Current consulting agreement(s) showing retainer amount and duration; (2) invoice/engagement letters for completed prior projects in the 24-month window showing project size and payment timing; (3) LinkedIn or professional profile confirming the borrower’s seniority level at their former pharma employer (Director-level or above is the standard that supports the consulting fee amounts depositing in the statements). Penn Medicine / Jefferson Health biotech startup founders: these borrowers may have overlapping income streams in the same bank account — university/hospital salary direct deposits (bi-weekly W-2), grants (periodic lump-sum federal or foundation grants that are not personal income and must be excluded), and startup consulting income (monthly advisory fees from pharma companies that fund the startup’s clinical development). Separate the income streams carefully: W-2 salary is qualifying income; grants are not; consulting fees may be qualifying income with 24 months of history.

UPMC multi-stream income classification: UPMC physicians and surgeons in Pittsburgh frequently receive income from multiple simultaneous sources: (1) UPMC institutional salary (W-2 from UPMC; base salary + quality bonus + academic productivity bonus); (2) UPMC Faculty Practice Plan distributions (separate entity from UPMC's hospital operations; physician groups that bill professional fees independently; may issue a K-1 or separate W-2 from the Faculty Practice Plan LLC); (3) consulting/advisory income from pharmaceutical companies, medical device companies, or CROs (1099 income); (4) grant income (NIH, industry grants; not personal income; exclude from qualifying income). For UPMC borrowers: identify all income sources before selecting the documentation approach. If the W-2 base salary alone qualifies the borrower, use Full Doc or conventional approach. If the consulting/advisory income is material and improves qualification, add bank statement documentation for the consulting layer. Philadelphia “rowhouse” DSCR property type accuracy: Philadelphia rowhouses are often 2-4 story single-family attached homes (not technically condominiums or townhomes in the legal sense for most older stock). For DSCR appraisal purposes: confirm the subject property’s exact legal classification (fee simple, condominium, PUD) before submission — some newer Philly townhome developments are technically condominiums with HOA fees that affect PITIA calculations. Also note: Philadelphia rowhouses in rapidly gentrifying neighborhoods (Fishtown, Northern Liberties, South Kensington) may be subject to Philly’s LOOP (Long-Term Owner Occupied Properties) tax abatement program — confirm the property’s current tax status from the Philadelphia OPA (Office of Property Assessment) for accurate PITIA calculations, as abatements affect property tax and thus DSCR qualification.