Chicago's two-flats and three-flats are some of the most refinanced rental buildings in the Midwest. A DSCR cash-out uses their combined rents to support a larger loan, with no personal income documents.
In short: Yes, LendingStreet finances DSCR cash-out refinances on investment property in Illinois, up to 75% LTV, qualifying on the property's rent. Chicago's 2-4 unit buildings fit our standard DSCR programs, and rentals across the suburbs, Peoria, Rockford and Springfield qualify too. Property taxes are the main Illinois variable, since a high Cook County bill lowers the ratio. Standard programs need 1.0x after the cash-out, a 620 credit score and no W-2s or tax returns.
How much can I take out? Up to 75% of the appraised value, minus your existing loan and closing costs, provided the rent covers the new payment at the program minimum.
Will my taxes hurt the ratio? Often, yes. Illinois property taxes are among the highest in the country, and the monthly tax escrow is part of the DSCR payment. Use your most recent bill, and keep in mind that Cook County reassesses on a rotating three-year cycle, so a recent reassessment can change the number.
This example is illustrative and not a quote. An investor owns a two-flat appraised at $480,000 with an existing loan of $250,000. The two units rent for $4,000 a month combined. Taxes and insurance are $1,100 a month.
At 75% LTV the new loan is $360,000, which leaves $110,000 after the payoff, before closing costs. At a sample rate of 7.25% on 30-year amortization, principal and interest is about $2,456. The total payment is about $3,556 and the DSCR is about 1.12x, above the 1.0x standard minimum. Taxes and insurance make up nearly a third of that payment.
| Line | Monthly |
|---|---|
| Principal and interest on $360,000 | About $2,456 |
| Taxes and insurance | $1,100 |
| Total payment | About $3,556 |
| Combined rent | $4,000 |
| DSCR | About 1.12x |
Brick two-flats and three-flats line neighborhoods across the North, Northwest and South Sides, along with greystones and courtyard buildings. Two- to four-unit buildings fall under our standard DSCR programs. Larger courtyard and walk-up buildings with five or more units are underwritten as multifamily on net operating income.
Many of these buildings are a century old. Appraisers will note masonry, porches, boilers and garden units. A garden unit has to be a legal unit for its rent to count toward the ratio.
Chicago has its own Residential Landlord and Tenant Ordinance, and some suburbs have their own rental licensing or inspection programs. Lenders want the rent figure to come from real leases on legal units.
If a unit is vacant, some programs will use a market rent estimate from the appraisal. Tell us the occupancy up front so the right program is matched to the building.
Suburban Cook, DuPage, Will and Lake counties have single-family and townhome rentals with HOA dues in many newer developments. Downstate cities such as Peoria, Rockford, Springfield and Champaign offer lower prices, with rents that often support the payment well.
In lower-priced markets the $150,000 loan minimum can matter. A blanket portfolio cash-out across several rentals is one way to pull equity from smaller properties.
Attorneys are commonly involved in Chicago-area real estate closings, and a title company handles the payoff and recording. Ask them early for an estimate of title, recording and any local costs, and confirm the final figures with them.
If you plan to move title from your name into an LLC at the refinance, ask your attorney about any transfer declarations or local requirements first.
A complete file keeps the appraisal and underwriting moving.
Yes. LendingStreet finances investment property in Illinois, including DSCR cash-out refinances up to 75% LTV on non-owner-occupied rentals, from $150,000.
Yes. These buildings fit our 2-4 unit DSCR programs and qualify on combined rents against the new payment.
Taxes are part of the monthly payment in the ratio, so a high bill lowers the DSCR and can limit how much cash the rent supports.
Only if it is a legal unit. Rent from an unpermitted unit generally will not be counted.
That is fine. You can refinance in your name or ask about moving the property into an LLC, which is standard on our DSCR programs.
No. DSCR loans qualify on the property's rent. You need a 620 or higher credit score, reserves and entity documents if borrowing in an LLC.
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