Plenty of Maui rentals were bought years ago and now carry small balances against large values. A DSCR cash-out refinance turns that equity into cash for the next property, a renovation or reserves, without personal income documents.
In short: LendingStreet's DSCR cash-out refinance lets owners of 1-8 unit rentals in Kahului, Wailuku and across Maui borrow up to 75% of appraised value, qualifying on the property's rent instead of tax returns. The standard minimum DSCR is 1.0x and the minimum credit score is 620. On Maui, the cash-out amount is often capped by the ratio rather than the LTV, because higher insurance costs and a larger new loan both raise the payment.
Long-time owners of Kahului and Wailuku rentals, including families who inherited a home and now lease it, often have homes worth several times what they paid. Investors who bought and renovated a few years ago may also have built equity they want to redeploy.
Common uses include buying another rental, funding an ohana addition, paying off a high-cost loan, or building reserves before a big insurance renewal.
Cash-out goes up to 75% LTV, and maximum leverage can be lower on 5-8 unit properties and larger balances. Seasoning requirements vary by program; see /dscr-cash-out-refinance-seasoning.html. The new payment, including taxes and insurance, still has to clear the program's DSCR minimum.
That second test is where Maui files get trimmed. A bigger loan means a bigger payment, and the island's insurance premiums have risen. Run the ratio at a few loan amounts before you decide how much to take out.
Before applying, compare your current payment with the new one at each loan size. On Maui, even a modest increase in the loan can move the ratio more than owners expect.
This example is illustrative and not a quote. An owner holds a Kahului duplex worth $1,200,000 with a $290,000 mortgage balance. The units lease for $3,600 and $3,400, for $7,000 a month. Taxes are budgeted at $380 a month in the long-term rental class and insurance at $430.
At 75% LTV the new loan is $900,000. Estimated principal and interest is about $6,140 and the total payment about $6,950, for a DSCR of about 1.01x. That clears 1.0x with little cushion. At 70% LTV the loan is $840,000, the total payment about $6,540 and DSCR about 1.07x, with a stronger cushion and about $60,000 less cash out.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| New loan | $900,000 | $840,000 |
| Estimated principal and interest | $6,140 | $5,730 |
| Taxes and insurance | $810 | $810 |
| Total payment | $6,950 | $6,540 |
| DSCR | 1.01x | 1.07x |
| Cash out before costs | $610,000 | $550,000 |
Maui County taxes long-term rentals, non-owner-occupied homes and short-term rentals in different classes. If your duplex is leased year-round, make sure it is classified correctly with the Real Property Assessment Division before you refinance; the right class can lower the tax line and raise your ratio. Confirm current requirements with the county.
The appraiser will value what is permitted. Enclosed lanais, garage bedrooms and unpermitted back units can be excluded from value and rent, which can shrink both your LTV and your ratio. If you have legalized work, bring the permit records.
Comparable sales can be thin for duplexes and homes with ohana units, so a well-documented rent roll and leases help the review.
If your property holds a valid Maui vacation rental permit, some STR programs can qualify on rental history or projected revenue; see /str-dscr-refinance.html. Apartment-district condos are subject to the county's 2024 phase-out law and its legal challenges, so expect lenders to underwrite many of those on long-term rent instead.
Investors often use cash-out proceeds as the down payment on another rental or to fund a construction project. If you plan to build, pair the refinance with our Kahului construction program. If you own five or more rentals, a blanket portfolio loan may refinance several at once.
Owners who have held a Kahului or Wailuku rental for many years often weigh two options: sell and pay capital gains tax plus Hawaii's conveyance tax, or keep the property and borrow against it. A cash-out refinance lets you keep the asset and its rent while freeing equity, and loan proceeds are generally not taxed as income. Talk with your tax advisor about your own situation.
The trade-off is a larger loan and a higher payment. With Maui insurance and tax costs rising, run the numbers on a realistic budget before you commit. If the ratio is tight at 75% LTV, a smaller cash-out with a stronger cushion often makes more sense than stretching.
Some owners also use the refinance to move a rental from personal ownership into an LLC at the same time. LLC borrowers are standard on DSCR loans, though you should check with your attorney and insurer about the transfer.
Before you apply, gather a year of rent deposits and your current leases. A clear rent history makes the appraiser's job easier and supports the rent used in the ratio, especially on duplexes and homes with ohana units where comparable rentals are harder to find.
Also check your insurance renewal date. If a premium increase is coming, use the new figure in your own math so the closing numbers hold.
If any unit is between tenants, try to have a new lease signed before the appraisal so the full rent can be counted toward the ratio.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, estimated value, current balance and rents through the form below or call (877) 298-1001. See our Hawaii cash-out page for statewide details.
Up to 75% of appraised value minus your payoff and costs, as long as the rent clears the program's DSCR minimum at the new payment.
On Maui, the ratio often limits the loan before the LTV does, especially with higher insurance. Larger balances and 5-8 unit properties can also have lower limits.
No. A DSCR cash-out qualifies on the property's rent, your credit and reserves.
Seasoning varies by program. Our seasoning guide explains the common rules.
Often not. Appraisers value permitted space, so unpermitted units may add no value or rent.
Possibly, on STR programs that qualify on rental history or projected revenue. Permit status matters.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Often, yes. LLC borrowers are standard, but confirm the transfer with your attorney, escrow officer and insurance agent.
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