Lincoln landlords who bought before the last run-up in values often have plenty of equity. How much of it they can pull out is usually set by the tax bill, not the appraisal.
In short: LendingStreet's DSCR cash-out refinance lets Lincoln investors pull equity from 1-8 unit rentals at up to 75% LTV, qualifying on the property's rent instead of personal income. Loans start at $150,000 with no stated maximum, the minimum credit score is 620 and the standard minimum DSCR is 1.0x. In Lincoln, the full property tax bill often decides whether the maximum loan is realistic.
Many Lincoln landlords own houses near campus or in established neighborhoods that they bought years ago for far less than today's values. Some have paid them down or own them free and clear. A cash-out refinance turns that equity into a down payment on the next rental, money for a renovation or a way to retire higher-cost debt on another property.
Because a DSCR loan qualifies on rent, there are no W-2s or tax returns. That suits investors whose returns show heavy depreciation, self-employed owners and anyone with more rentals than a conventional lender will count.
Nebraska assesses residential property at or near full market value, and the combined levy in Lincoln is high compared with many states. A large tax bill sits inside the monthly payment used in the ratio, so it reduces how much new debt the rent can support.
The Lancaster County Assessor sends valuation notices each spring, and owners can protest a value they think is too high with the County Board of Equalization during the protest period in early summer. A successful protest lowers the tax bill and can help your DSCR. Bring recent sales or an appraisal that supports a lower value. Use the most recent notice, not an old tax bill, when you run the numbers. If a protest is pending, tell us; we can show the numbers at both the current and the protested value.
Insurance works the same way. A newer roof and a reasonable hail deductible keep the premium in check, and every dollar saved on insurance or taxes supports more loan at the same rent.
This example is illustrative and not a quote. A landlord owns a four-bedroom house near UNL's East Campus worth $280,000, with $60,000 left on the mortgage. It leases to a family for $1,900 a month. Taxes are about $440 a month and insurance $160.
At the 75% LTV maximum, the loan would be $210,000 and the payment about $2,068, a DSCR of about 0.92x, below 1.0x. At 65% LTV, the loan is $182,000, estimated principal and interest is about $1,273, the payment is about $1,873 and DSCR is about 1.01x. That still pays off the old loan and leaves about $122,000 before closing costs.
If the landlord wants more, the options are a higher documented market rent, a successful valuation protest that lowers taxes, or a sub-1.0 DSCR program where it fits.
| LTV | New loan | Cash before costs | Est. principal and interest | Total payment | DSCR |
|---|---|---|---|---|---|
| 75% | $210,000 | $150,000 | $1,468 | $2,068 | 0.92x |
| 70% | $196,000 | $136,000 | $1,370 | $1,970 | 0.96x |
| 65% | $182,000 | $122,000 | $1,273 | $1,873 | 1.01x |
If the house is leased by the bedroom to students, the qualifying rent is the lease total supported by the appraiser's market rent, and the number of tenants has to fit the city's limits on unrelated occupants for that zoning district. Twelve-month leases that run August to July are standard, and a signed lease for the coming school year helps support the rent.
Most programs require you to have owned the property for some time before the loan is based on today's appraised value rather than your purchase price, and the rule varies by program. Our cash-out seasoning page explains the options. If the property is in your personal name, some programs let you move it into an LLC at closing.
Common uses include a down payment on another Lincoln rental, funding a rehab, or paying off a maturing loan on a different property. Investors with five or more rentals may prefer a blanket portfolio loan, which refinances several properties together on one closing. Others take a smaller cash-out on several houses so each one keeps a comfortable DSCR.
Whatever you choose, leave room for the next valuation notice. Taxes in Lincoln tend to rise with values, and a payment that barely clears 1.0x today can slip below it after a reassessment.
Your appraiser will compare the rental with recent sales in the same neighborhood and estimate market rent. Lincoln's established neighborhoods usually have enough sales to support value, but houses near campus with extra bedrooms or basement conversions can be harder to compare. List the improvements you have made with dates and costs, and make sure every counted bedroom has legal egress.
If your current lease is below market because a long-term tenant has stayed for years, the appraiser's market rent estimate may support a higher figure, subject to the program.
Send the address, estimated value, payoff, rent, latest valuation notice and insurance premium through the form below, or call (877) 298-1001. We will show the cash and DSCR at several loan amounts. Our investor loans are business-purpose loans on non-owner-occupied property. For statewide details, see our Nebraska DSCR cash-out page.
Up to 75% of the appraised value minus your payoff and closing costs, as long as the rent clears the DSCR minimum on the new payment.
In Lincoln, high property taxes often push the ratio below 1.0x at maximum leverage. A lower loan amount, higher rent or a lower tax bill can fix it.
It can. A lower assessed value means lower taxes and a higher DSCR. Use the final value from the county when you apply.
No. DSCR loans qualify on the property's rent, not personal income.
Seasoning varies by program. Some use the appraised value after a shorter hold than others.
Yes, if occupancy fits the city's limits and the rent is supported by leases and the appraisal.
Yes. We lend on 1-8 unit rentals across Nebraska, including Omaha, Grand Island and Kearney.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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