Investors who bought on Oahu ten or more years ago are often sitting on large equity. The question on a Honolulu cash-out is rarely how much the house is worth. It is how big a payment the rent can carry.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals in Honolulu and across Oahu up to 75% LTV, qualified on rent, not tax returns. On Oahu, though, rent is low relative to value, so the 1.0x standard minimum DSCR usually limits the loan before the LTV cap does. Many owners cash out at 50% to 60% of value, or use a sub-1.0 DSCR program, and fee simple status and condo eligibility matter too.
Values across Oahu have risen a great deal over the past decade, and owners who bought in Pearl City, Aiea, Mililani, Kaneohe or town before that run-up often owe a fraction of what their rentals are worth.
Cash-out goes up to 75% LTV on 1-4 unit rentals, with lower limits on some 5-8 unit and larger loans. But the new payment, including taxes, insurance and any AOAO dues, must be covered by the rent at the standard 1.0x minimum. On a typical Oahu rental, the ratio drops below 1.0x well before you reach 75% of value.
That is not a reason to skip the cash-out. It means the loan should be sized to the rent, and the table below shows how that works on a real-world type of property.
Put another way, the cash-out on an Oahu rental is a rent question. Raising the rent at lease renewal, adding a legal second unit or lowering the insurance cost can each increase the loan more than a higher appraisal would.
This example is illustrative and not a quote. An owner has a fee simple Pearl City house appraised at $1,050,000, with $280,000 left on the mortgage. It leases for $4,600 a month. Taxes are $330 a month and insurance, including hurricane coverage, is $230. Closing costs are estimated at $9,000.
At 75% LTV the ratio is far below 1.0x. At 55% LTV the new loan is $577,500, the payment with taxes and insurance is about $4,500, the DSCR is about 1.02x, and the owner nets about $288,500 before other costs. A sub-1.0 DSCR program could allow a larger loan, usually with more reserves.
Even at 55% of value, the owner in this example walks away with a large sum, and the rental still covers its payment. For many long-time Oahu owners, that is the right balance: meaningful cash without pushing the property into negative cash flow.
| LTV | New loan | Est. net cash | Monthly payment with T&I | DSCR |
|---|---|---|---|---|
| 50% | $525,000 | $236,000 | $4,141 | About 1.11x |
| 55% | $577,500 | $288,500 | $4,500 | About 1.02x |
| 60% | $630,000 | $341,000 | $4,858 | About 0.95x |
| 75% | $787,500 | $498,500 | $5,932 | About 0.78x |
If your rental is a condo, the building matters as much as the unit. Leasehold units are not eligible on many programs. In fee simple buildings, we look at the AOAO's reserves, insurance, litigation and any pending special assessments. Many older Honolulu high-rises are working through life safety and fire sprinkler requirements under a city ordinance adopted after the 2017 Marco Polo fire, and large planned assessments can affect eligibility.
AOAO dues count in the payment, so high dues lower the ratio and the cash-out amount.
Townhomes in Mililani, Ewa Beach and Kapolei usually have a homeowners association rather than an AOAO, but the same idea applies: monthly dues count in the payment, and HOA leasing rules should allow your rental.
A permitted ohana or ADU adds a second rent, which can make a meaningful difference in the loan size on a cash-out. If your second unit was built without permits, the appraiser may not credit it, and legalizing it before the refinance can be worth the effort if the extra rent is large.
We use your current tax bill, which for a rental is already at the non-homeowner level. Insurance has become more expensive across Hawaii, and some carriers have limited new policies, so get a current quote for both the landlord policy and the hurricane policy before you size the loan. A higher premium lowers the ratio.
Tax bills in Honolulu are based on assessed values that the city updates each year. Check your latest assessment notice, since an increase will show up in next year's bill and in your cash flow after the refinance.
Seasoning rules, meaning how long you need to have owned the property before cash-out is based on today's appraised value, vary by program. If you recently bought and renovated, tell us the dates and costs, and we will match you to the right program.
If you are close to a seasoning milestone, waiting a few weeks can change which value the program uses, and with it the amount of cash available. Check the dates before you order the appraisal.
If you own five or more rentals, on Oahu or across several states, a blanket portfolio loan can refinance them together on one closing, qualified on combined cash flow, with release provisions when you sell. Combining a lower-leverage Oahu rental with stronger cash-flowing mainland properties can help the overall numbers.
Send the address, balance, rents, tax bill, insurance and AOAO details through the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. We will show you the cash available at loan sizes the rent can support.
If you have a lease renewal coming up at a higher rent, mention it. Timing the refinance after the new lease starts can increase the loan the property supports.
Up to 75% LTV on 1-4 units, but on Oahu the 1.0x DSCR minimum usually limits the loan to less. Sub-1.0 programs can allow more.
Because the rent usually does not cover the payment on a loan that large. The ratio, not the LTV cap, sets the loan.
Leasehold units are not eligible on many programs. Ask us about the specific building.
Yes. Large pending assessments can affect the building's eligibility and the payment used in the ratio.
No. The loan qualifies on the property's rent.
If it is a permitted unit, yes, which can increase the cash-out amount.
Yes. With five or more, a blanket portfolio loan may fit, including properties in more than one state on some programs.
Seasoning varies by program; see our cash-out seasoning guide.
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