Billings home values climbed sharply over the past decade, and many investors who bought Heights duplexes or older triplexes years ago now hold significant equity. A DSCR cash-out refinance lets you use it without documenting personal income.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals in Billings and Yellowstone County up to 75% LTV, qualifying on the property's rent with no W-2s or tax returns. The new payment must be covered by rent at the program minimum, 1.0x on standard programs, and the minimum credit score is 620. In Billings, the rent often sets the practical limit before the LTV cap does, so properties with several units tend to support the most cash.
The new loan can be up to 75% of the appraised value, and the rent must cover the new payment. In Billings, values have risen faster than rents, so a single-family home may hit the DSCR limit before reaching 75% LTV. Multi-unit properties with combined rent usually support more of the value.
Maximum LTV can also be lower on 5-8 unit buildings and larger balances; it varies by program.
Run both tests before setting expectations. Divide the rent by the payment at 75% LTV; if the result is under 1.0x, the loan is reduced until it clears, unless a sub-1.0 program fits your credit and reserves.
This example is illustrative and not a quote. An investor owns a Heights triplex now appraised at $450,000, with $160,000 left on the loan. A cash-out refinance at 75% LTV is $337,500. After the payoff and about $9,500 in estimated closing costs, the investor receives about $168,000.
The three units rent for $1,150 each, $3,450 in total. Estimated principal and interest is about $2,360, taxes $330 and insurance $190, for a total payment of about $2,880 and a DSCR of about 1.20x.
The same home rented as a single-family property for about $2,000 a month would support a much smaller loan, which shows why multi-unit properties are the strongest cash-out candidates in Billings.
| Item | Amount |
|---|---|
| Appraised value | $450,000 |
| New loan at 75% LTV | $337,500 |
| Existing loan payoff | $160,000 |
| Estimated closing costs | $9,500 |
| Cash to investor | $168,000 |
| Rent, three units | $3,450 |
| New payment | $2,880 |
| DSCR | About 1.20x |
Montana does not disclose sale prices in public records, so the appraiser depends on MLS data and other sources. For a cash-out, value drives the loan, so help the appraiser with a list of improvements and dates, current leases and any known sales of similar properties nearby.
Schedule access to every unit and give tenants notice. An appraiser who cannot enter a renovated unit may not credit the improvements.
Yellowstone County bills follow values set by the Montana Department of Revenue, which reappraises residential property on a set cycle. Recent state changes tax primary homes, qualifying long-term rentals and other residential property at different rates, and an owner may have to apply for long-term rental treatment. Check your property's current classification with the Department of Revenue before you rely on a tax figure.
Because taxes are part of the payment in the ratio, a lower bill from a qualifying long-term rental classification can increase the loan the rent supports.
If the property was recently a primary residence before you converted it to a rental, its classification may need updating. Ask about the timing so the bill used in underwriting matches what you will actually pay.
Many programs require a period of ownership before the loan can use the current appraised value rather than your purchase price plus documented improvements. The period varies by program; see the cash-out seasoning guide. If you just finished a rehab, a rate-and-term refinance may come first.
Inherited rentals can follow different timing rules. If you received the property through an estate, share the transfer date and estate documents.
A recent hail claim and a new roof can help both the appraisal and the insurance premium. An old roof can raise the premium, lower the ratio and lead to questions from underwriting. Get the quote before you apply.
Insurance companies may also ask about the heating system and any past water claims from frozen pipes. Clear answers make the quote faster and more accurate.
Montana has no transfer tax, and a refinance would not trigger one anyway. Expect lender fees, appraisal, title insurance, escrow and recording costs, which can be rolled into the new loan if the LTV and ratio allow.
Investors commonly use the proceeds as down payments on the next rental, to pay off a higher-cost loan, to fund repairs or to build reserves for Montana winters. With five or more rentals, a blanket portfolio loan can cash out several properties in one closing.
Keep a reserve from the proceeds. A furnace failure in January or a roof replacement after a hail storm can come at any time, and a larger loan payment leaves less room for surprises.
Send the address, estimated value, loan balance and rents. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below.
Include the purchase date and a list of improvements so seasoning and value can be reviewed together.
Up to 75% of the appraised value on standard programs, as long as the rent covers the new payment.
Values have risen faster than rents, so the payment on a full 75% loan can exceed what the rent supports on some single-family homes.
No. Montana has no transfer tax. Closing costs on a refinance are mainly lender fees, appraisal, title insurance, escrow and recording.
No. The loan qualifies on rent, with credit and reserves reviewed. LLC borrowers are standard, and the minimum credit score is 620.
It can. A lower tax bill lowers the payment and raises the DSCR.
It varies by program. Some require seasoning before the new value can be used. If you recently finished a rehab, a rate-and-term refinance can come first, with a cash-out later.
Yes, with maximum LTV that can be lower and varies by program. Six- and eight-plexes often support more cash than single-family homes in Billings because combined rent covers more of the payment.
Yes, with a blanket portfolio loan on five or more properties. One closing, one payment and release provisions make it easier to manage a growing Billings portfolio.
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