Santa Fe landlords who bought years ago are often sitting on large equity and a small tax bill. A refinance lets them tap the first without giving up the second.
In short: LendingStreet's DSCR cash-out refinance lets Santa Fe 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 Santa Fe, high values mean the rent, not the appraisal, usually sets how much cash you can take.
Values across Santa Fe have risen a long way, especially on the Eastside, near downtown and in the midtown neighborhoods. Many long-time landlords own rentals with little or no debt. A cash-out refinance can fund the next purchase, a casita addition, a roof and stucco project, or the payoff of a higher-cost loan on another property.
Because a DSCR loan qualifies on rent, there are no W-2s or tax returns, which suits retirees, self-employed owners and investors with several properties.
Cash-out also helps owners who want to diversify without selling. Selling a long-held Santa Fe rental can mean a large capital gain and a buyer who pays a reset tax bill; refinancing keeps the property, its rent and its capped valuation while freeing up equity for other investments.
New Mexico taxes residential property on one-third of its assessed value, and annual increases on most residential property are capped at 3% while the same owner holds it. A sale resets the value to market; a refinance does not. A landlord who has owned a Santa Fe rental for many years may pay far less tax than a new buyer would on the same house.
That low tax bill is a real advantage in a cash-out, because taxes are part of the payment in the ratio. Moving the property into a new LLC can raise questions about whether ownership changed, so ask a local tax adviser before you retitle, and confirm with the Santa Fe County Assessor how a transfer would be treated.
This example is illustrative and not a quote. A landlord owns an Eastside home worth $850,000 with $180,000 left on the loan. It is leased for $4,200 a month. Because of the valuation cap, taxes are only about $300 a month, and insurance is $220.
At the 75% LTV maximum, the loan would be $637,500 with a payment of about $4,977, a DSCR of about 0.84x. At 60% LTV, the loan is $510,000, estimated principal and interest is about $3,566, the payment is about $4,086 and DSCR is about 1.03x. That pays off the old loan and frees up about $330,000 before closing costs.
If the owner wanted more, the options would be a documented higher market rent, adding a legal casita to increase income, or a sub-1.0 DSCR program where it fits.
| LTV | New loan | Cash before costs | Est. principal and interest | Total payment | DSCR |
|---|---|---|---|---|---|
| 75% | $637,500 | $457,500 | $4,457 | $4,977 | 0.84x |
| 65% | $552,500 | $372,500 | $3,863 | $4,383 | 0.96x |
| 60% | $510,000 | $330,000 | $3,566 | $4,086 | 1.03x |
The appraiser estimates market rent from comparable long-term leases. Santa Fe has fewer long-term rental comparables in high-end neighborhoods than in midtown or the Southside, so an existing lease at a strong rent helps. Furnished leases of 30 days or more may be considered differently from unfurnished annual leases, depending on the program. Short-term rental income can be used on some programs only where a city or county permit is in place.
Most programs require you to have owned the property for a period before the loan is based on today's appraised value; the rule varies by program, and our cash-out seasoning page explains the options. If the property is held personally, some programs allow you to move it into an LLC at closing, but review the property tax question above before you do.
Common uses include a down payment on the next rental, a casita build that adds rentable income, or a payoff of short-term debt elsewhere. Some owners use the cash to recoat roofs and repair stucco across several properties at once, which protects value and can lower insurance costs. Investors with five or more rentals may prefer a blanket portfolio loan. If you are adding a casita, our Santa Fe construction page explains how ground-up loans and draws work.
Whatever you do, keep some cushion in the ratio. Insurance premiums in wildfire-prone areas have been rising, and a payment that barely clears 1.0x today has little room for the next renewal.
If you only need to pay off a maturing or high-cost loan, a rate-and-term refinance can allow higher leverage on some programs and avoids cash-out pricing. See our Santa Fe rate-and-term page for a hard money payoff example.
Send the address, estimated value, payoff, rent, current tax bill 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. See our New Mexico DSCR cash-out page for statewide details.
Up to 75% of the appraised value minus your payoff and costs, as long as the rent clears the DSCR minimum on the new payment.
A refinance by itself does not reset the capped valuation in New Mexico; a sale does. Confirm how any change in title would be treated before you retitle.
Santa Fe values are high relative to rents, so the payment at maximum leverage often exceeds what the rent supports.
No. DSCR loans qualify on the property's rent, not personal income.
Yes, if the casita is a legal unit with its own lease. Its rent adds to qualifying income while taxes and insurance rise only a little, which is often the easiest way to raise DSCR on a high-value Santa Fe property.
Seasoning varies by program. Some use the appraised value after a shorter hold than others. Long-held Santa Fe rentals usually clear seasoning easily, so the rent and the payment become the main limits.
Yes. We lend on 1-8 unit rentals across New Mexico.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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