DSCR Refinance Loans: Replace the Loan, Keep the Property

The property is doing its job. The loan on it is not. Maybe it is a hard-money loan that was only ever meant to get you through the renovation. Maybe a balloon payment is coming due. Maybe the loan was written years ago in your personal name and the structure no longer fits the portfolio you actually run.

A DSCR rate-and-term refinance replaces the existing loan with new long-term financing sized to your current balance plus closing costs. Qualification is based on the property's rental cash flow; personal income documentation and tax returns are not required.

The situations that bring investors to a rate-and-term refinance

Exiting a bridge or hard-money loan. Short-term money is a tool: it wins the deal, funds the rehab, and closes fast. It is also expensive and it expires. Once the property is renovated and leased, the business plan says refinance into something you can hold. That handoff, from bridge loan to long-term DSCR financing, is one of the most common files we see.

Retiring a balloon. Plenty of investor loans, especially from local banks and private lenders, are written with a balloon: the payment schedule ends and the full remaining balance comes due at once. A balloon is a deadline. Refinancing ahead of it, on your schedule instead of the calendar's, is the difference between a routine transaction and a forced one.

Fixing the structure. Some loans simply age poorly: an adjustable structure you never wanted, a lender that no longer services investor loans well, a loan stuck in your personal name when the rest of your rentals sit in an LLC. A rate-and-term refinance is the clean moment to put the right structure in place, including vesting the property in your entity at closing.

Why your bank makes this harder than it should be

Conventional refinance underwriting runs on your tax returns and your debt-to-income ratio. For an investor, that means the same problems that complicate a purchase: write-offs that understate income, a portfolio of financed properties that inflates your ratios, and weeks of document chasing. It gets worse if the property was recently renovated, because the bank may struggle to credit the new rent or the new value.

A DSCR refinance is underwritten on the asset. The core question is whether the property's rent covers its monthly obligations - principal, interest, taxes, insurance, association dues - and the file is built around the lease, the appraisal, and your liquidity. Our DSCR loan requirements page walks through the full checklist.

What the program looks like on a rate-and-term refinance

• Leverage. Up to 80%; select programs up to 85% with strong credit. LTV is measured against the current appraised value.
• Coverage ratio. Typically 1.00. Below the standard minimum, options remain: Ratios down to 0.75 considered with compensating factors such as lower LTV, stronger credit, or higher reserves.
• Credit. Typically 660+; select programs down to 600 with reduced leverage. Strongest pricing typically 740+.
• Loan amounts. From $100,000; select programs from $75,000. At the top end: Up to $3,000,000 on most programs and up to $4,000,000 on select programs; larger scenarios considered case-by-case.
• Reserves. Typically 3–6 months of PITIA; up to 12 months for larger loan amounts. Cash-out proceeds may count toward reserves on many programs.
• Prepayment structure. Structures typically range from 0 to 5 years with buyout options; availability and terms vary by state law. Match the structure to how long you actually plan to hold.

Run the new payment scenario through our DSCR calculator first; the ratio at the new loan amount is what underwriting will look at.

Rate-and-term or cash-out: which one is this?

A rate-and-term refinance replaces your existing balance, plus closing costs, without pulling meaningful equity out. If you want the new loan to be larger so that equity comes back to you as capital at closing, that is a cash-out refinance, with its own leverage guideline and its own page: see DSCR cash-out refinance.

The distinction matters because leverage limits and underwriting treat the two differently. If you are close to the line, a scenario review sorts out which structure serves the goal better.

DSCR refinance FAQs

Can I refinance out of a hard-money or bridge loan with a DSCR loan?

Yes, that exit is a core use of the program. Once the property is stabilized, the DSCR refinance pays off the bridge loan and replaces it with long-term financing qualified on the property's rent. If the renovation raised the property's value, timing matters: Typically 6 months of ownership; recently purchased properties may be valued at purchase price plus documented improvements. That seasoning guideline governs when the current appraised value can be used.

What happens if my balloon is due soon?

Start now. A refinance has real lead time - appraisal, title, payoff coordination - and a balloon date does not move. On timing: Most files close in 3 to 4 weeks; timing varies with appraisal turn times and documentation. Bring us the balloon date during the scenario review and we will tell you honestly whether the calendar works.

Does the property need to be leased to refinance?

A lease helps, but vacancy is workable. Leased properties: generally the lower of the executed lease or appraiser market rent (Form 1007). Vacant properties: market rent, often with a modest LTV reduction. For a recently renovated property being re-tenanted, the market-rent path is often exactly what makes the refinance possible.

Can I move the loan into my LLC when I refinance?

Usually, yes. A refinance is the natural moment to fix vesting: title can be vested in the entity when the new loan records. Bring the entity documents early so escrow prepares it correctly. Individual, LLC, corporation, or LP vesting welcome. Entity vesting does not reduce leverage or change pricing on most programs; expect entity documents and personal guaranties from principal members. Details on our LLC and entity vesting page.

Do I need tax returns to refinance with a DSCR loan?

No. Qualification is based on the property's rental cash flow; personal income documentation and tax returns are not required. Plan on the property-centered stack instead: the lease or market-rent appraisal, insurance, payoff information for the existing loan, asset statements for reserves, and entity documents if vesting in an LLC.

The property earned better financing. Go get it.

Tell us what is on the property now - lender, balance, maturity date - and what you want the loan to look like instead. A experienced lender will map the exit and give you a straight answer, typically within one business day.