Maryland investors hold Baltimore rowhomes, suburban single-family rentals in the Washington and Baltimore suburbs, and small multifamily across the state. A DSCR cash-out refinance can turn that equity into cash using the rent.
In short: Yes. LendingStreet finances DSCR cash-out refinances on 1-8 unit investment property in Maryland, up to 75% LTV, qualified on the property's rent instead of your tax returns, with a 620 minimum credit score and LLC borrowers standard. In Maryland, the recordation tax on the new money, rental licensing and lead paint compliance are the three items to sort out before you apply.
You take out a new loan larger than your current balance, pay off the old mortgage and keep the difference. On a DSCR cash-out the new loan is sized on the appraised value, up to 75% LTV, compared with up to 80% LTV on a purchase.
The loan qualifies on the debt service coverage ratio: monthly rent divided by the full new payment, meaning principal, interest, taxes, insurance and any HOA dues. A bigger balance means a bigger payment, so it is the ratio after the cash-out that has to clear the 1.0x standard minimum. You do not need W-2s, pay stubs or tax returns, and the loan can close in your LLC.
Baltimore's rowhomes are one of the most common investor properties in the Mid-Atlantic, from Canton, Highlandtown and Hampden to lower-priced neighborhoods on the east and west sides. Baltimore County, Anne Arundel and Howard counties add single-family homes and townhomes.
Montgomery and Prince George's counties sit in the Washington, DC metro, with higher prices and strong renter demand. Frederick, Hagerstown, Salisbury and Annapolis round out the market, and Ocean City has a seasonal rental segment.
Maryland charges recordation tax on new mortgages and transfer taxes on deeds. On a refinance by the same borrower, the recordation tax generally applies only to the new money above the unpaid balance of the existing loan, so a cash-out pays it on the cash-out portion. Rates vary by county; confirm with your title company.
Your term sheet and closing disclosure list lender costs separately from title, recording and government charges, so you can see exactly what the cash-out costs and how much of the equity reaches you.
| Closing item | How it usually works in Maryland |
|---|---|
| Recordation tax | Generally charged on the new money above the existing balance |
| State and county transfer tax | Charged on deeds when property sells; not usually on a refinance |
| Recording fees | Circuit court clerk fees on the new deed of trust |
| Title and settlement | Lender title policy and settlement fees |
| Escrow setup | Deposits for county taxes and insurance |
Maryland reassesses property on a three-year cycle, with increases phased in. The homestead tax credit, which caps assessment increases, applies only to a principal residence, so a rental's taxable assessment can rise faster.
County and city rates vary, and Baltimore City has one of the higher rates in the state. Use the current bill for the property as a rental, and check the state's assessment notice for upcoming changes.
Rowhomes share walls, so insurers look at the condition of the roof, the party walls and the electrical and plumbing systems. Older homes can need updates before some carriers will write them.
Properties near the Chesapeake Bay and its tributaries, and in low-lying parts of Annapolis and the Eastern Shore, can sit in flood zones. Flood insurance is generally required there and counts in the payment.
This example is illustrative and not a quote. An investor owns a renovated rowhome in Baltimore appraised at $320,000 with $120,000 left on the current loan. Rent is $2,400 a month and city property taxes and insurance come to $420 a month.
At 75% LTV the new loan is $240,000. Paying off the $120,000 balance leaves $120,000 before closing costs. On a 30-year term, principal and interest is about $1,637, so the full payment is about $2,057 and the DSCR is about 1.17x, above the 1.0x standard minimum.
Put another way, rent would have to fall below about $2,057 a month before this loan dropped under 1.0x, a cushion of roughly $343 a month. Running the same check on your own numbers shows how much cash the rent can actually support.
| Item | Amount |
|---|---|
| Appraised value | $320,000 |
| Loan at 75% LTV | $240,000 |
| Existing loan payoff | $120,000 |
| Cash before closing costs | $120,000 |
| Principal and interest | About $1,637 |
| Taxes and insurance | $420 |
| Total monthly payment | About $2,057 |
| DSCR at $2,400 rent | About 1.17x |
Baltimore City requires rental licenses with inspections, and several counties, including Montgomery and Prince George's, run their own licensing programs. Montgomery County has also adopted rent stabilization rules, which limit annual increases on many units.
Maryland requires rental properties built before 1978 to be registered with the Maryland Department of the Environment and to meet lead risk reduction standards. Keep the registration and inspection certificates current, since an underwriter may ask for them.
Seasoning varies by program. Some allow a cash-out soon after purchase; others want several months of ownership or limit the loan to the purchase price plus documented improvements until the property has been held longer. See our cash-out seasoning guide for how this usually works.
Two limits set your proceeds: 75% of appraised value, and the rent covering the new payment. Whichever is lower wins. On 5-8 unit properties and larger balances the maximum LTV can be lower and varies by program.
If you are unsure which limit applies to you, send the purchase date, rehab costs and rent through the form below and we will run both.
A complete file moves faster through appraisal and underwriting, and lets us quote accurately the first time.
Yes. We finance DSCR cash-out refinances on non-owner-occupied 1-8 unit rentals across Maryland, up to 75% LTV, qualified on rent.
On a refinance by the same borrower, it generally applies to the new money above the existing unpaid balance. The rate depends on the county. Your title company can give the exact figure.
Pre-1978 rentals must be registered with the state and meet lead standards. An underwriter may ask for proof, and keeping it current avoids delays.
Some Baltimore homes still carry ground rent. It is usually small, but the lender will want it identified and handled in title.
No. The loan qualifies on the property's rent. You will still need a 620 or higher credit score, reserves and entity documents if the property is held in an LLC.
It depends on the program. Some allow cash-out shortly after purchase; others require several months of ownership or limit the loan to cost plus documented improvements. Our seasoning guide covers the details.
Yes. Residential DSCR programs cover 1 to 8 units. On 5-8 unit properties the maximum LTV can be lower and varies by program.
Yes. LLC borrowers are standard on DSCR loans, and the members typically sign for the loan personally. Have the operating agreement, articles and EIN letter ready.
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