Your rental is paid off and earning rent, but the equity is just sitting there. A DSCR cash-out loan turns part of that value into cash without touching your tax returns.
In short: You can take a DSCR cash-out refinance on a paid-off rental for up to 75% of appraised value, qualified on the property’s rent rather than your personal income. Because there is no existing loan to pay off, nearly all the proceeds go to you after closing costs. LendingStreet finances these loans from $150K, with 620 minimum credit and LLC ownership allowed.
With no mortgage on title, there is no payoff eating into your proceeds. Every dollar of the new loan, minus closing costs, comes back to you.
Free-and-clear properties also tend to have clean title and a long ownership history. That usually makes the file simpler than a refinance with a lien already in place.
Two numbers set the loan. The first is the appraised value, with cash-out up to 75% on our DSCR programs. The second is the DSCR, meaning monthly rent divided by the new payment including taxes and insurance.
Standard programs need at least 1.0x. If the maximum loan pushes DSCR below that, the loan is reduced, or a specialty program with a lower minimum may apply at different pricing.
This example is illustrative and uses a sample 7.0% rate, not a quote. A single-family rental appraises at $420,000 and rents for $3,100 a month. Taxes and insurance total $500 a month.
At 75%, the loan is $315,000 and the payment is about $2,596, for a DSCR of about 1.19x. At 65%, the loan is $273,000 and DSCR rises to about 1.34x.
| 75% of value | 65% of value | |
|---|---|---|
| Loan amount | $315,000 | $273,000 |
| Principal and interest | $2,096 | $1,816 |
| Taxes and insurance | $500 | $500 |
| DSCR on $3,100 rent | ≈1.19x | ≈1.34x |
| Existing loan to pay off | $0 | $0 |
Not always. Taking less can mean a better pricing tier, a stronger DSCR and more monthly cash flow. It also leaves a cushion if rents dip or a big repair comes up.
Take what your next move actually needs. If the cash is for a down payment on another rental, size the refinance to that purchase plus reserves.
If you bought the property with cash recently, some programs let you refinance soon after closing. In that case, the loan is often based on what you paid plus documented improvements, not the new appraised value.
If you have owned it longer, the appraised value is used. Seasoning rules vary by program, so tell your loan officer when and how you bought the property.
The file is lighter than most because there is no existing lender involved.
Send the address, estimated value, rent and how much cash you want. Our financing team typically returns 2–3 options, often within 48 hours, so you can compare loan size, rate and prepayment terms.
Yes. A DSCR cash-out loan can be made on a free-and-clear rental for up to 75% of appraised value. The loan qualifies on rent, not your income. There is no payoff, so proceeds go to you after closing costs.
Some programs allow it shortly after purchase, typically basing the loan on your purchase price plus documented improvements. Rules vary by program. Your loan officer will confirm what applies to your dates.
No. Our DSCR programs do not require W-2s or tax returns. You provide leases, bank statements, credit and property documents.
Often, yes, by deeding the property to your LLC at or before closing. Title and program rules decide how that is handled. Ask before you move the deed.
These are business-purpose loans, so proceeds are commonly used for more investing, such as a down payment, renovations or reserves. Many investors use them to buy the next rental. Let us know the purpose during the application.
It depends on how you will use the money. A DSCR cash-out loan gives you a lump sum with fixed options and qualifies on rent. HELOCs on investment property are harder to find and usually carry variable rates.
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