Pennsylvania Private Money Lending:
Licensing, Compliance & Documents
By Anthony Geraci, Managing Partner & CEO, Geraci LLP | February 2026
Pennsylvania's private money lending market is active in Philadelphia, Pittsburgh, and their surrounding suburbs. The Philadelphia market in particular offers strong fix-and-flip opportunities. Judicial foreclosure extends enforcement timelines, but the broad usury exemptions for business-purpose loans provide rate flexibility.
This guide covers the essential licensing, usury, foreclosure, and document requirements for private money lenders originating loans in Pennsylvania.
Pennsylvania at a Glance
Security Instrument: Mortgage
Foreclosure Type: Judicial
Typical Foreclosure Timeline: approximately 9-18 months
Usury: Pennsylvania's usury limit is 6% for most consumer transactions under the Loan Interest and Protection Law (41 P.S. Section 201). However, business-purpose loans and loans above $50,000 are broadly exempt. For residential mortgage loans, the rate is limited to 6.5% above the Federal Reserve discount rate. Licensed lenders operate under separate rate authority.
Related: Usury Laws by State | Deed of Trust vs. Mortgage Guide | How to Lend in Multiple States
Licensing Requirements
Pennsylvania requires a Mortgage Lender license from the Department of Banking and Securities for consumer mortgage lending. Private money lenders making business-purpose loans are generally exempt, particularly for loans above $50,000.
Key Compliance Considerations
Pennsylvania is a judicial foreclosure state. The process involves filing a complaint, obtaining a judgment, and conducting a sheriff's sale. Philadelphia County foreclosures can be particularly slow.
Pennsylvania has a relatively unique 'Act 91' notice requirement for residential mortgage foreclosures, requiring 30 days written notice and information about housing counseling before filing.
The state provides a right of redemption until the sheriff confirms the sale.
Pennsylvania's 6% general usury rate is low, but the broad exemption for business-purpose loans and loans above $50,000 covers most private money transactions.
Document Requirements for Pennsylvania Private Money Loans
Pennsylvania private money loans require a mortgage as the primary security instrument, along with a promissory note, loan agreement, personal guaranty (for entity borrowers), and state-specific disclosures and compliance riders. For fix-and-flip and construction loans, draw agreements, scope of work exhibits, and completion guarantees are also required.
Automate Loan Docs generates complete, Pennsylvania-specific document packages that comply with all applicable state requirements. Every template is drafted by the attorneys at Geraci LLP, whose team has over 30 years of combined experience advising private money lenders across all 50 states — including extensive experience with Pennsylvania lending transactions.
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