Indiana DSCR Refinance Replaces a Maturing Private Money Loan
An Indiana investor replaced a private money loan with a balloon coming due on his duplex, qualifying on the property's rental income after voluntarily reducing his work schedule.
Loan Snapshot
- State
- Indiana
- Property Type
- Duplex
- Loan Purpose
- Rate & Term Refinance
- Loan Amount
- $312,000
- LTV
- 60%
- DSCR
- 1.19
- Days to Close
- 19
Borrower profile, generalized to protect privacy: an investor with three rental properties who had recently chosen to work fewer hours.
An actual closed transaction. Certain details have been generalized to protect client privacy.
The Situation
An Indiana investor owned a duplex that had been financed several years earlier with a private money loan. The loan carried a balloon payment that was coming due, and the existing lender was unwilling to extend the maturity date. The duplex itself was healthy: stable tenants, substantial equity, and rental income comfortably above its costs.
Why the Bank Said No
The borrower had voluntarily reduced his work schedule, and his personal income had declined with it. On employment income alone he no longer fit conventional guidelines, even though the property had never missed a beat.
The Financing Approach
A DSCR rate-and-term refinance replaced the maturing private loan. Qualification was based on the duplex's rental income measured against the proposed payment rather than the borrower's reduced employment earnings. Title remained in his personal name, and conservative leverage reflected the equity he had built.
The Outcome
The loan closed in November of 2025, in under three weeks and ahead of the balloon maturity. The private lender was paid off on time, and the borrower kept the property on predictable long-term financing.
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The Borrower's Challenge
The balloon payment was approaching quickly, and the borrower no longer qualified using employment income alone. The duplex, however, had stable tenants and sufficient rental income to support the proposed payment.
The Loan Structure
A DSCR rate-and-term refinance replaced the maturing private money loan, qualified on the duplex's rental income, with title in the borrower's personal name.
How We Solved It
Underwriting measured the property's stabilized rents against the proposed payment and set aside the question of the borrower's voluntarily reduced work schedule entirely.
The Result
The private lender was paid off before the maturity date, and the borrower retained the property with more predictable long-term financing.
Actual scenario; certain details have been generalized to protect client privacy. Individual results vary. This is not a commitment to lend, and past outcomes do not guarantee the terms, timing, or approval of any future loan.
Reviewed by Eddie Luhrassebi, Founder & CEO, NMLS #337071 | CA DRE #01230650
Last updated: July 16, 2026 · About the reviewer