New Orleans shotgun doubles and Creole cottages have built a lot of equity for long-term landlords. A DSCR cash-out refinance lets you take it out based on rent, as long as the insurance and flood numbers still leave the ratio above the minimum.
In short: LendingStreet offers DSCR cash-out refinances on New Orleans rentals with one to eight units, lending up to 75% of appraised value based on rent rather than personal income. The rent has to cover the full new payment at the program minimum, 1.0x on standard programs, with a 620 minimum credit score and LLC ownership allowed. In New Orleans the lines that decide files are insurance and flood premiums, and the city's short-term rental rules, which generally do not allow non-owner-occupied STRs in residential areas.
A cash-out refinance replaces your existing mortgage with a larger one. The difference, less closing costs, comes to you at closing. LendingStreet sizes the new loan at up to 75% of the appraised value on a cash-out, and the loan can close in an LLC with a 30-year term available.
Underwriting does not use your W-2s or tax returns. It compares the property's rent with the full new payment, meaning principal, interest, taxes, insurance and association dues. That debt service coverage ratio has to meet the program minimum, 1.0x on standard programs, after the extra cash is added to the balance.
The shotgun double, two side-by-side units under one roof, is the signature New Orleans rental, found across Mid-City, Bywater, the Marigny, the Irish Channel, Treme and Carrollton. These qualify as 2-unit residential properties, and both rents count. Uptown and the Garden District command higher rents, while Gentilly, Broadmoor and Algiers offer more moderate prices.
Jefferson Parish suburbs like Metairie and Kenner, and St. Tammany Parish across the lake in Covington and Slidell, have their own markets, tax rates and flood profiles. Treat each parish separately when estimating taxes and insurance.
Tulane, Loyola, the medical district downtown, the port and the hospitality industry drive renter demand. Many shotgun doubles are raised a few feet on piers, which affects both insurance and flood premiums.
Louisiana assesses residential property at 10% of fair market value, and Orleans Parish reappraises every four years. Rentals do not get the homestead exemption, so the tax bill is higher than an owner-occupied home of the same value.
Use your actual current bill, and check the Orleans Parish assessor's site in reappraisal years, when values can jump.
Louisiana homeowners and wind insurance is expensive, and many New Orleans owners have moved to Louisiana Citizens or surplus lines carriers after several insurers left the state. Much of the city is in a flood zone, and flood premiums depend on elevation, foundation type and location. Raised homes typically cost less to insure for flood.
Get current wind, hazard and flood quotes before you apply. Louisiana has no mortgage recording tax, so closing costs are mainly title insurance, recording, appraisal and lender fees.
New Orleans generally does not allow whole-home, non-owner-occupied short-term rentals in residential zones. Residential STR permits are tied to owner occupancy, with additional limits by block, and commercial STRs are limited to certain non-residential districts. If you want STR income, look at other Louisiana markets where STRs are permitted, and check each parish's rules.
For long-term rentals, the city has adopted rental registration and inspection requirements in recent years. Check current requirements before you apply.
This example is illustrative and not a quote. An investor owns a raised shotgun double in Mid-City, with each side leased at $1,800. The property appraises at $450,000, the existing loan balance is $200,000, and taxes and insurance run about $1,050 a month against total rent of $3,600.
At 75% LTV the new loan is $337,500. Paying off $200,000 leaves about $137,500 before closing costs. Estimated principal and interest on a 30-year schedule is about $2,360, so the full payment is about $3,410 and the DSCR is about 1.06x, above the 1.0x standard minimum. If the flood premium rose, adding $150 a month, the ratio would fall to about 1.01x, still above the minimum.
| Item | Amount |
|---|---|
| Appraised value | $450,000 |
| Maximum loan at 75% LTV | $337,500 |
| Existing loan payoff | $200,000 |
| Cash before closing costs | $137,500 |
| Estimated principal and interest | About $2,360 |
| Taxes and insurance | $1,050 |
| Total monthly payment | About $3,410 |
| DSCR at $3,600 rent | About 1.06x |
Many New Orleans investors bought doubles years ago and now hold substantial equity. Because insurance is expensive, run the numbers carefully: a cash-out that looks good on value alone may fail the ratio once wind and flood premiums are added.
If you plan to raise a home or upgrade the roof, which can lower insurance and flood premiums, schedule the work after closing. Investors with five or more rentals can compare a blanket portfolio loan with separate refinances.
Compare quotes from several carriers, including surplus lines, before you apply, since a lower premium raises the ratio directly.
Start with 75% of value, then check whether the rent covers that payment at the minimum ratio. If not, the loan steps down until it does. Multi-unit properties count the rent of all units, and 5-8 unit buildings may have a lower LTV cap, which varies by program.
Time since purchase matters as well. Cash-out seasoning varies by program: some lenders allow it within months, others size the loan on purchase price plus documented improvements. Programs below 1.0x and rate-and-term refinances are alternatives when the numbers are close. Our Louisiana cash-out page explains the state-level rules.
Having these ready keeps the appraisal and underwriting moving.
Yes, on non-owner-occupied rentals with one to eight units, up to 75% LTV and from $150,000. Our investor loans are business-purpose loans on non-owner-occupied property.
Non-owner-occupied short-term rentals are generally not allowed in residential areas of New Orleans. Investors seeking STR income usually look at other Louisiana markets.
Yes. Two-unit buildings are residential, and the combined rent of both sides is used.
If required, the flood premium is part of the payment. Raised homes or an elevation certificate can lower the cost.
Not personal income. The property's rent qualifies the loan, along with a 620 or higher credit score and reserves.
Seasoning varies by program. Some programs allow a cash-out within months; others cap the loan at cost plus documented rehab for a period.
Often, yes, with a smaller loan or a program that accepts a ratio below 1.0x. Terms vary by program.
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