Three Ways to Buy Your Next Pennsylvania Home First
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
The three structures are the same everywhere. What Pennsylvania adds is a count of how many deeds each one records, because every deed is a taxable transfer.
Start with the count
Pennsylvania realty transfer tax attaches to a transfer of real estate, at 1 percent at state level and often with an additional local rate on top, collected by the county Recorder of Deeds.
So the first useful question about any Pennsylvania structure is how many deeds it produces. See the transfer tax page.
Carry both payments, then recast
You qualify carrying the current mortgage and the new one together, buy, and when the old home sells apply the proceeds to the new loan's principal and ask the servicer to recast. Recasting re-amortizes the remaining balance over the remaining term, lowering the payment without a refinance or new closing costs.
Cleanest structure when income supports both payments, and the most predictable in any market. Two deeds get recorded across the move, so two taxable transfers.
Borrow against the equity you already have
A closed-end second or an equity line against the departing residence converts trapped equity into a down payment, repaid from the sale at closing.
Pennsylvania permits it. There is no state constitutional restriction of the kind Texas imposes, where Article XVI Section 50(a)(6) caps all homestead liens at 80% combined loan-to-value and prohibits a subordinate home equity line outright.
On the transfer tax it is the same count as the first structure: you still buy and you still sell, so two taxable transfers.
Keep it and rent it
The departing home becomes a rental. One deed is recorded across the whole move, the purchase, so one taxable transfer rather than two.
In Pennsylvania that is a real saving, because the tax scales with the value of the property transferred and the departing home is often the larger of the two numbers in a downsizing or a lateral move.
What you give up is the proceeds. The financing side changed in September 2026. Fannie Mae B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08:
- No leases. Lease agreements are not permitted for any departing residence. Market rent comes from a complete appraisal with market rents, a Form 1007, or market analysis tools with at least three comparable rentals.
- Offset only. Gross rent times 75% less that property's PITIA. Positive offsets that payment; negative goes into the ratio.
- Reserves. Six months on the vacated home under 12 months of property management experience.
One thing to ask about rather than assume: the Department's wording reaches real estate transferred by long-term lease, a defined category distinct from an ordinary residential tenancy. If your arrangement is unusual, ask your attorney. See the rental conversion page.
How the choice gets made in Pennsylvania
| If this is true | Look first at |
|---|---|
| Income comfortably carries both payments | Carry and recast |
| Equity is strong and the sale is weeks away | Borrow against it |
| The departing home is the more valuable of the two | Price the rental route properly, since it removes the larger taxable transfer |
| You are buying in Pike County | The loan limits page, since the limit differs there |
Start with the Pennsylvania guide, or how qualifying works without a sale.
Frequently asked questions
Which Pennsylvania structure produces the fewest taxable transfers?
Keeping the departing home as a rental. It records one deed, the purchase, so one taxable transfer instead of the two produced by buying and then selling.
Does Pennsylvania limit a second mortgage against my current home?
No. Pennsylvania has no constitutional cap of the kind Texas imposes under Article XVI Section 50(a)(6), which limits all homestead liens to 80% combined loan-to-value and prohibits a subordinate equity line.
How much rental income counts when I keep my old Pennsylvania house?
Monthly gross rent times 75%, less that property's PITIA. A positive result offsets the departing residence's payment only and never adds qualifying income; a negative result is added to your debt-to-income ratio. Fannie Mae B3-3.8-05, dated 09/02/2026.
Could renting my home out itself be a taxable transfer?
The Department's wording reaches real estate transferred by long-term lease, which is a defined category rather than an ordinary residential tenancy. We do not state a threshold because we have not verified one; if your arrangement is unusual, ask your attorney before signing.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Pennsylvania realty transfer tax is collected by county Recorders of Deeds and local rates vary by municipality and school district; your closing agent, your CPA or a Pennsylvania attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.