Austin prices climbed fast, then cooled as a wave of new apartments came online. Investors who bought or built with short-term money are now refinancing in a market where rents are flatter and Texas property taxes take a big bite.
In short: LendingStreet refinances Austin-area rentals out of hard money, bridge and existing loans with 30-year DSCR loans that qualify on the property's rent. Loans start at $150,000 with no stated maximum, rate-and-term reaches 80% LTV on some programs and the standard minimum DSCR is 1.0x. In Austin, high property taxes and softer rents make duplexes and multi-unit properties the easiest files to qualify.
Inside the city, East Austin, Montopolis, Govalle, the North Loop and areas near Mueller have older homes, infill duplexes and new construction. North and east of the city, Pflugerville, Round Rock, Hutto, Manor and Georgetown have large tracts of newer homes, while Kyle and Buda serve the I-35 corridor to the south.
Tech and healthcare employers keep long-term demand strong, but the supply of new apartments has pushed some single-family rents down from their peaks. Investors refinancing now should use current lease comps, not rents from 2022.
| Area | Typical rental stock | What to check before you refinance |
|---|---|---|
| East Austin, Montopolis, Govalle | Infill duplexes, older homes, new builds | Taxes on new values, unit legality |
| Pflugerville, Hutto, Manor | Newer tract homes | MUD or PID taxes, HOA rules |
| Round Rock, Georgetown | Suburban single-family | Williamson County taxes, HOA leasing limits |
| Kyle, Buda | Newer subdivisions | Hays County taxes, rent comps against new supply |
A rate-and-term refinance replaces the short-term note with a 30-year DSCR loan sized to pay off the existing balance and closing costs. The new loan qualifies on the property's rent, not your W-2s or tax returns, and the standard minimum DSCR is 1.0x. On some programs rate-and-term goes up to 80% LTV.
Many Austin investors used bridge loans to buy in 2022 and 2023, or built infill units on short-term construction debt. If the appraisal comes in below the purchase price, the payoff may exceed what rate-and-term can cover. Know the payoff and the likely value before you apply.
This example is illustrative and not a quote. An investor bought a duplex in the Montopolis area with a bridge loan, finished updates and leased both units for $2,200 each. The property appraises at $600,000 and the bridge balance is $430,000.
The new loan of $440,000 covers the $430,000 payoff plus $10,000 in closing costs, about 73% of the $600,000 value. Estimated principal and interest on a 30-year term is about $3,039. With taxes of $1,050 and insurance of $220 a month, the full payment is about $4,309 and DSCR is about 1.02x on $4,400 of rent.
The property tax line alone is about a quarter of the rent, which is why Austin files need realistic tax figures.
What changes most is the structure: the balloon or maturity date goes away, the payment includes principal so the balance falls each month, and taxes and insurance are counted up front. Run your own numbers with the DSCR calculator before you apply.
| Item | Before: bridge loan | After: DSCR rate-and-term |
|---|---|---|
| Loan balance | $430,000 | $440,000 |
| Monthly principal and interest | $3,583 (interest only) | $3,039 |
| Taxes, insurance | $1,270 | $1,270 |
| Total monthly payment | $4,853 | $4,309 |
| DSCR at $4,400 rent | About 0.91x | About 1.02x |
| Term | Short-term, due soon | 30 years |
Texas has no state income tax, so local property taxes are high. A rental can be taxed by the county, the city, the school district, a community college district and, in many newer suburbs, a MUD or PID. Investors do not get homestead exemptions or the homestead appraisal cap.
The Travis Central Appraisal District, Williamson Central Appraisal District and Hays Central Appraisal District set values each year, and owners can protest. A successful protest can lower the bill, but budget on the current full rate for the refinance.
Williamson and Hays county suburbs often add MUD taxes on newer subdivisions, which can push the combined bill above the City of Austin rate.
Austin regulates short-term rentals and restricts non-owner-occupied STRs in residential zones, and it has updated those rules in recent years. Many suburban HOAs ban rentals under 30 days. Most Austin refinances use 12-month leases.
Hail and severe storms affect insurance across Central Texas, and some carriers use percentage-based wind and hail deductibles. Homes near creeks may fall in flood zones that require flood insurance.
Austin's HOME initiative allows up to three units on many single-family lots, and investors are building duplexes and additional units across the city. Combined rent from two or three units can carry the loan far better than one house at the same price. A finished infill project financed with construction debt can move to a DSCR loan once it is leased.
The choice comes down to the goal. If you want to replace a short-term note or an expensive loan and keep the balance about where it is, use rate-and-term. If you want equity out to fund the next purchase, cash-out reaches 75% LTV, with seasoning that varies by program.
Few Austin investors have room for cash-out at today's values and taxes. Rate-and-term keeps the balance down, which matters when the tax line is already high.
Send these with your request and the financing team can size the loan on the first pass.
LendingStreet is an investment property financing company. Our investor loans are business-purpose loans on non-owner-occupied property, and we refinance 1-8 unit rentals across Travis, Williamson, Hays and Bastrop counties. Send the address, the payoff, the rent and the value you expect, or call (877) 298-1001. The financing team will run the ratio at a few loan amounts and come back with options. For statewide rules, see our Texas rate-and-term refinance page.
High property taxes and softer rents. Duplexes and multi-unit properties often qualify more easily, and sub-1.0 programs exist.
Yes. MUD and PID taxes are part of the property tax bill and count in the monthly payment.
Only if it can legally operate as one. The city restricts non-owner-occupied STRs in residential zones, so most refinances use long-term leases.
No. Those rules apply to homesteads, not to non-owner-occupied investment property.
If you own five or more investment properties, a blanket portfolio loan can combine them under one loan with one closing and one payment, qualified on portfolio cash flow.
Yes. 30-year terms are available on our DSCR programs, which is what lowers the monthly payment compared with an interest-only short-term note.
Seasoning rules vary by program and can differ between rate-and-term and cash-out refinances. Share your purchase date, rehab costs and payoff, and we will tell you which programs fit your timeline.
No. The loan qualifies on the property's rent compared with the full monthly payment. We still review credit, reserves and the property itself.
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