Plenty of Durham landlords bought a bungalow for a fraction of what it is worth today. That equity can fund the next purchase, a renovation or a down payment on a small multi-unit building, without selling a house that still rents well.
In short: LendingStreet offers DSCR cash-out refinances on Durham rentals up to 75% LTV, qualified on the property's rent with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x at the new payment and the minimum credit score is 620. Seasoning requirements vary by program.
Owners who bought in Trinity Park, Old West Durham, Watts-Hillandale, Duke Park or near Golden Belt more than a few years ago often have substantial equity. So do landlords who renovated East Durham mill houses before the surrounding blocks changed.
Equity on paper is not the same as cash you can borrow. The new loan has to be supported by the rent at the new, larger payment, and in Durham that is usually the limit that binds, not the 75% LTV cap.
Two tests apply. The loan cannot exceed 75% of the appraised value, and the rent has to cover the full new payment, including principal, interest, property taxes, insurance and any HOA, at the program's minimum ratio. Whichever test produces the smaller loan wins.
A larger loan raises the payment, so many Durham cash-outs end up between 65% and 75% LTV. Sub-1.0 DSCR programs can stretch the amount on some files.
Before you apply, run your own estimate with our DSCR calculator at 75%, 70% and 65% LTV. In Durham that quick check usually shows where the rent caps the loan, which keeps expectations realistic and helps you decide whether a sub-1.0 program is worth exploring.
This example is illustrative and not a quote. A landlord owns a Watts-Hillandale house worth about $560,000 with a remaining balance of $205,000. It rents for $3,325 a month. After the county's most recent revaluation, taxes are about $430 a month, and insurance is $140.
At 75% LTV the new loan is $420,000. Estimated principal and interest is about $2,865, the total payment is about $3,435 and the DSCR is about 0.97x, under the 1.0x standard minimum. At 70% LTV the loan is $392,000, the payment is about $3,244 and the DSCR is about 1.02x.
After paying off the old loan and about $9,000 in closing costs, the 70% option puts roughly $178,000 in the landlord's hands, compared with about $206,000 at 75% if a sub-1.0 program fit the file.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| New loan | $420,000 | $392,000 |
| Estimated principal and interest | $2,865 | $2,674 |
| Taxes and insurance | $570 | $570 |
| Total monthly payment | $3,435 | $3,244 |
| DSCR at $3,325 rent | About 0.97x | About 1.02x |
| Estimated cash after payoff and costs | $206,000 | $178,000 |
Durham County's most recent revaluation raised many assessed values. If you have owned a rental for years, your escrow may still reflect the older bill, but the refinance will be underwritten on the current one. Look up the current assessment and combined county and city rate on the Durham County Tax Administration site before you estimate the loan.
If you think the new assessment is too high, the county has an appeal process with deadlines. A successful appeal lowers the tax line and helps the ratio on future refinances.
If you bought or renovated the property recently, the program may cap the cash-out based on your purchase price plus documented improvements until a seasoning period passes. Requirements vary by program, so read our seasoning guide and keep receipts for any renovation.
For a property you are still holding on short-term financing, a rate-and-term refinance may be the better first step.
Investors who inherited a Durham rental or received it from a family member should gather the deed, any estate paperwork and proof of ownership date. Clear title and a documented ownership history make the appraisal and seasoning review much simpler, and the closing attorney will need them to issue title insurance.
Cash-out proceeds from a business-purpose loan are typically used for investment purposes. Durham investors commonly use them in a few ways.
Appraisers in Durham see wide value swings between nearby blocks. Give the appraiser a list of improvements with dates and costs, current leases and any recent comparable sales you know of. Make the property easy to access and show it in its best condition.
For small multi-unit properties, provide the rent roll and unit mix. Leverage on 5 to 8 unit buildings and larger balances can be lower and varies by program.
Small multi-unit rentals often handle a cash-out better than single-family homes in Durham, because two or more rents are supporting one payment. A duplex in Old West Durham or a converted house with three units near Duke can sometimes reach the 75% LTV cap while a single-family house next door tops out lower.
The appraiser will look at the combined rents and recent sales of similar small multi-unit properties, which are less common in Durham than single-family sales. Provide every lease, the rent roll and any recent improvements. If one unit is vacant or below market, consider leasing it at market rent before you apply, since the rent we count drives how much cash the loan can produce.
Send the address, estimated value, current balance, rent and how much cash you are hoping to take out. We will show you the loan at several LTVs so you can see where the ratio lands. Use the form below or call (877) 298-1001.
Up to 75% of the appraised value, as long as the rent covers the new payment at the program minimum. In Durham the rent test often limits the loan first.
No. DSCR loans qualify on the property rent. You need a 620 minimum credit score, reserves and documents for the property and your entity.
Seasoning varies by program. Recent purchases may be limited to cost plus documented improvements until the seasoning period ends.
Yes. The new loan is underwritten on current taxes. A higher assessment raises the payment and lowers the ratio.
Yes. Small multi-unit properties qualify on the combined rent of all units.
Yes. LLC borrowers are standard. If the property is in your name, ask about titling before closing.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Yes. Cash-out proceeds from a business-purpose loan are typically used for investment purposes, and many Durham investors use them to buy rentals elsewhere in North Carolina or in other states.
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