Northwest Arkansas and central Arkansas have drawn steady investor interest, and many of those deals began with hard money or a local bank loan. A DSCR rate-and-term refinance replaces that loan with long-term financing qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Arkansas, up to 80% LTV on some programs, qualified on the property's rent with no W-2s or tax returns. The new loan pays off your existing hard money, bridge or higher-rate loan plus closing costs, with only a small amount of cash back allowed on most programs. Our investor loans are business-purpose loans on non-owner-occupied property, starting at $150,000 with a 620 minimum credit score. In Arkansas, low property taxes help the ratio, while storm-driven insurance and the appraisal on newer subdivisions are the items to watch.
A rate-and-term refinance pays off the loan you have now and replaces it with a new one, changing the rate, the term or both, without pulling out equity. The new balance usually covers the payoff plus closing costs, and most programs allow only a small amount of cash back at closing. The exact allowance varies by program.
Because you are not taking cash out, some programs allow a higher ceiling than a cash-out refinance, up to 80% LTV on some programs. Qualification runs on the debt service coverage ratio, the property's rent divided by the new monthly payment including principal, interest, taxes, insurance and any HOA dues. The standard minimum is 1.0x.
Bentonville, Rogers, Springdale and Fayetteville have grown quickly, and much of the rental stock there is newer single-family homes and duplexes. In Little Rock, North Little Rock and Conway, investors buy older brick homes, renovate them and need to exit short-term debt. Rate-and-term refinances also help investors who hold a local bank loan with a short balloon or a rate reset.
In each case the goal is the same: a stable, long-term payment the rent can carry, without raising the balance. Keeping the loan close to the payoff also leaves more room under the ratio if taxes or insurance rise after closing.
Hard money and bridge loans are built to be replaced. Once the rehab is done and the unit is leased, a rate-and-term DSCR refinance pays off the short-term loan and sets a 30-year payment. Start the refinance a couple of months before maturity so appraisal and title do not run up against the deadline.
If you bought recently, expect the lender to look at your purchase price and documented improvements, not just the new appraisal. Seasoning requirements differ by program, and they can change how much of the after-repair value you can use.
Arkansas charges a real property transfer tax on deeds, but a refinance usually does not involve a deed, so that tax typically does not apply. There is no state mortgage recording tax, so costs on a refinance are mainly recording fees, title, appraisal and lender charges.
If you move a rental from your personal name into an LLC during the refinance, the deed may be subject to the transfer tax unless an exemption applies. Ask the title company before you sign anything.
Arkansas property taxes are among the lower ones in the country, which tends to help DSCR ratios. Homestead credits apply to homes the owner lives in, not rentals, so use the bill for the property as a rental.
Severe storms, hail and tornadoes affect insurance pricing across the state, and roof age and deductibles often come up. Some properties near rivers and in the Delta sit in flood zones that require flood coverage. Get a current quote rather than relying on the seller's policy.
This example is illustrative and not a quote. An investor owns a three-bedroom single-family rental in Rogers appraised at $340,000. The existing hard money loan used for the purchase has a payoff of $250,000, costs about $2,190 a month interest-only and matures in 4 months. Rent is $2,250 a month, and taxes, insurance and any HOA dues run $300 a month.
Rolling about $7,000 of closing costs into the loan gives a new balance of $257,000, or about 75.6% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $1,775, so the full payment is about $2,075 and the DSCR is about 1.08x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $175 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $340,000 |
| Existing loan payoff | $250,000 |
| Closing costs rolled in | $7,000 |
| New loan amount | $257,000 |
| Loan-to-value | 75.6% |
| Principal and interest (30 years) | About $1,775 |
| Taxes, insurance and HOA | $300 |
| Total monthly payment | About $2,075 |
| Monthly rent | $2,250 |
| DSCR | About 1.08x |
If you need equity out of the property, a cash-out refinance is the tool. If you only need to retire the existing loan, rate-and-term usually offers more leverage room and a lower balance.
The underwriting is the same, but the outcome is not. A larger cash-out balance raises the payment and lowers the ratio, so ask for both options on the same property and compare the payment, the DSCR and the cash you would net side by side.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing loan and costs | Pay off loan and take equity |
| Maximum LTV | Up to 80% on some programs | Up to 75% |
| Cash at closing | Small allowance, varies by program | Up to the LTV limit |
| Minimum DSCR (standard) | 1.0x | 1.0x |
| Minimum credit score | 620 | 620 |
| Income documents | Rent only, no W-2s or tax returns | Rent only, no W-2s or tax returns |
Northwest Arkansas, anchored by Bentonville, Rogers, Springdale and Fayetteville, has the strongest growth, with corporate and university demand. Little Rock and North Little Rock offer older, lower-priced housing and steady long-term tenants. Conway, Jonesboro and Fort Smith round out the larger rental markets, and Hot Springs has a vacation rental segment.
Having these ready keeps the appraisal, title and underwriting moving, especially if a short-term loan is nearing maturity. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet offers rate-and-term DSCR refinances on 1-8 unit investment properties in Arkansas, from $150,000 with no stated maximum, qualified on the property's rent.
Usually not, because no deed transfers on a standard refinance. If you deed the property into an LLC at the same time, the transfer tax can apply unless an exemption covers it.
Only a small amount on most programs, and the allowance varies by program. If you want to pull equity out, a cash-out refinance up to 75% LTV is the better fit.
Yes. Newer homes in Northwest Arkansas are common DSCR collateral. The appraisal will lean on recent nearby sales, which are usually plentiful there.
Often, yes, but seasoning rules vary by program. Some use the new appraised value; others cap the loan near your cost basis if you bought recently.
No. A DSCR refinance qualifies on the property's rent, with a minimum credit score of 620 and reserves.
Standard programs require a minimum of 1.0x, meaning rent covers the full payment. Sub-1.0 programs exist for properties that fall short, with tighter terms.
Yes. LLC borrowers are standard on DSCR loans. Expect to provide the operating agreement, articles of organization and an EIN letter, and to sign for the loan personally.
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