Grand Rapids has one of Michigan's tightest rental markets, fed by healthcare on the Medical Mile, manufacturing and steady population growth. Investors with two-families in Creston or Eastown can use a DSCR cash-out refinance to pull equity on the rent alone.
In short: LendingStreet offers DSCR cash-out refinances on Grand Rapids-area investment properties with 1-8 units, up to 75% of appraised value. The loan qualifies on rent, not W-2s or tax returns, starts at $150,000 and needs a 620 credit score, and the rent has to cover the new payment at 1.0x on standard programs. In Grand Rapids, the city's rental certification, Michigan's non-homestead taxes and the condition of older two-family homes are the local items.
A cash-out refinance replaces your current mortgage with a larger one and hands you the difference at closing. The new loan can reach 75% of appraised value, and no W-2s or tax returns are needed because the loan qualifies on the property's rent.
The test is simple: monthly rent divided by the full new payment, which covers principal, interest, taxes, insurance and HOA dues. Standard programs need 1.0x or better at the new loan amount, and sub-1.0 programs exist for some properties.
Common uses include the down payment on the next rental, renovation budgets on other properties, paying off short-term bridge or rehab debt and building reserves for the portfolio.
Heritage Hill, Eastown, East Hills, Midtown, Creston and Belknap Lookout have older homes and two-family conversions. The West Side and Garfield Park offer lower prices, and Alger Heights carries solid single-family rentals.
Wyoming, Kentwood, Walker, Grandville and Byron Center add suburban rentals, and Allendale in Ottawa County serves Grand Valley State students.
Low vacancy and steady rent growth in Grand Rapids help appraisals support market rent, and two-family homes often produce strong ratios because two rents cover one payment.
Rentals in Grand Rapids range from older two-families near downtown to 1950s ranches in Wyoming and Kentwood and newer homes in Byron Center. The housing type affects condition questions, insurance and how the appraisal finds comparable rents.
Michigan caps annual taxable value increases while one owner holds a property, then uncaps after a sale. Rentals also pay additional school millage because they lack the principal residence exemption.
Use the current bill, which varies by city and township in Kent County.
Kent County cities and townships set their own millage, so a rental in Wyoming or Kentwood can carry a different bill than one in the city.
Recent sales in Grand Rapids have pushed many uncapped taxable values well above what long-time owners pay, so a property bought in the last few years may carry a much higher bill than its neighbors.
Many Grand Rapids rentals are older two-family homes. Appraisers look at separate utilities, egress, roofs and basements. Most predate 1978, so lead rules apply.
Lake-effect snow and freeze cycles can stress roofs and foundations. Get a current insurance quote.
Older two-families may have shared utilities. Separate meters can help both the appraisal and your operating costs.
Many Grand Rapids rentals still have older boilers or furnaces. Updated mechanicals help the appraisal and reduce winter repair calls.
The City of Grand Rapids requires rental properties to be certified and periodically inspected. Keep the certificate current, since lenders may ask for it.
Grand Rapids has limited short-term rentals largely to owner-occupied homes, so investor properties usually rent long-term.
Grand Rapids also enforces housing codes through complaint-based inspections between certification cycles, so keep units in good repair.
This example is illustrative and not a quote. An investor owns a Creston two-family with both units leased. It appraises at $330,000 with an existing payoff of $130,000. Combined rent is $2,700 a month, non-homestead taxes are $560 a month and insurance is $120.
At 75% LTV the new loan is $247,500, which leaves about $117,500 after the $130,000 payoff, before closing costs. Estimated principal and interest on a 30-year schedule is about $1,731, so the total payment is about $2,411 and the DSCR is about 1.12x, above the 1.0x standard minimum.
Before settling on a cash amount, test the ratio at two or three loan sizes. The cash difference between them is often smaller than investors expect, while the extra cushion helps when taxes or insurance rise.
| Item | At 75% LTV |
|---|---|
| Appraised value | $330,000 |
| New loan amount | $247,500 |
| Existing loan payoff | $130,000 |
| Cash before closing costs | $117,500 |
| Estimated principal and interest | About $1,731 |
| Taxes and insurance | $680 |
| Total monthly payment | About $2,411 |
| DSCR at $2,700 rent | About 1.12x |
Michigan's transfer taxes apply to deed transfers, not refinances, and there is no mortgage recording tax. Expect title, recording, the appraisal and lender fees.
Grand Rapids title work can take longer on older properties with long ownership chains, so start early.
Kent County recording is handled electronically for most refinances, which helps keep the closing timeline short once title is clear.
How long you have owned the property affects the loan. Seasoning requirements vary by program, so share your purchase date and any renovation costs up front.
Pull these together before you apply.
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us the address, rent, payoff and the cash you need, and we will check the ratio with realistic Kent County taxes and insurance before ordering an appraisal.
If the full 75% does not fit, we will show what does, including sub-1.0 programs. Get a quote with the form below or call (877) 298-1001, and see our Michigan cash-out page for statewide details.
The city requires one for rentals, and lenders may ask for it. Keep it current.
Yes. Two-unit properties qualify on combined rent at the program minimum.
Two things: the 75% LTV cap on cash-out and the ratio at the new payment. Whichever produces the smaller loan sets the amount.
Seasoning varies by program. Some allow a cash-out soon after purchase; others require several months of ownership or cap the loan at cost plus documented improvements.
None. The rent qualifies the loan. Expect a credit check, a 620 minimum score, reserves and LLC documents if applicable.
Usually not for investor-owned homes, since the city has largely limited STRs to owner-occupied properties.
Yes. We finance 1-8 unit rentals across Kent and Ottawa counties.
Yes. Allendale and downtown rentals near GVSU qualify on their leases, with loans starting at $150,000.
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