In central North Dakota, many rentals are financed by local banks on loans that balloon or reprice every few years. That works until the renewal comes at a bad time. A rate-and-term DSCR refinance replaces short-term debt with a fixed, long-term loan.
In short: LendingStreet refinances 1-8 unit rentals in Bismarck, Mandan and Lincoln with DSCR rate-and-term loans up to 80% LTV on some programs, paying off balloon bank loans, bridge loans or hard money. The loan qualifies on rent, with a 1.0x standard minimum DSCR and a 620 minimum credit score. Thirty-year terms are available and LLC borrowers are standard.
Community banks have long financed Bismarck-Mandan rentals, often with a 20- or 25-year amortization and a balloon or rate reset after three to five years. Each renewal brings a new rate, new fees and sometimes new terms, and an owner with several properties can face renewals every year.
Refinancing into a 30-year DSCR loan removes that cycle for the properties you plan to hold. The other common case is an investor finishing a bridge or rehab loan who needs long-term financing once the units are leased.
Local banks remain important partners for many investors, and some owners keep part of their portfolio with them. The goal of a DSCR refinance is not to leave every bank relationship, but to put the properties you plan to hold for years on a loan that does not need renewing.
A rate-and-term refinance pays off your current loan and closing costs without taking meaningful cash out. Because no cash goes to you, leverage can go up to 80% LTV on some programs, compared with 75% on cash-out. The new loan qualifies on rent rather than your tax returns.
Closing costs can usually be included as long as the total stays inside the program's LTV limit.
Expect costs for the appraisal, the abstract update and title policy, recording and lender fees. There is no state transfer tax in North Dakota to add on top.
This example is illustrative and not a quote. An owner has a 1980s Mandan fourplex with a local bank loan that balloons this year at a $290,000 balance. The units rent for $975 each, or $3,900 a month, and the building appraises at $420,000.
The new DSCR loan is $297,000, covering the payoff and about $7,000 of costs, roughly 71% of value. Estimated principal and interest on a 30-year term is about $2,077. With taxes of $520 and insurance of $200, the payment is about $2,797 and DSCR is about 1.39x, with the balloon risk gone.
Because the new loan amortizes over 30 years and includes taxes and insurance in the payment, budgeting becomes simpler. There is no renewal date to plan around, and the ratio leaves room for repairs and vacancies.
| Item | Bank loan | DSCR loan |
|---|---|---|
| Balance | $290,000 | $297,000 |
| Term | Balloon due this year | 30 years |
| Monthly payment with taxes and insurance | Resets at renewal | $2,797 |
| Rent | $3,900 | $3,900 |
| DSCR | Not measured | 1.39x |
Start at least 60 to 90 days before your maturity date. Appraisals, abstracts and insurance take time, and winter can slow inspections. If your bank offers a short extension, ask what it costs, but do not rely on it. Have leases and the latest tax statement ready.
If you have several loans maturing in the same year, start with the one that matures first and ask about combining the rest into one loan. A single refinance plan is easier than several separate negotiations.
For investors who used short-term money to buy and renovate, the refinance is the planned exit. Document the work with photos, receipts and permits, and lease the units before applying. Remember that a renovation can raise the next annual assessment, so budget on the higher tax figure.
Ask your bank for the payoff figure and per-diem interest in writing as soon as you apply, and let them know your expected closing date so the payoff is ready when title needs it.
If the rehab added a bedroom or a unit, make sure the change is permitted and recorded, since appraisers and insurers will check the legal layout before counting the extra rent.
A DSCR loan is approved on whether the rent covers the full payment, including taxes, specials and insurance. In Mandan and older parts of Bismarck, moderate prices and steady rents usually produce healthy ratios. On newer homes with large specials, the ratio can be tighter. If it is close, paying down part of the balance at closing can bring it above 1.0x.
Insurance also matters. A building with an older roof in hail country may cost more to insure, which raises the payment. Get a current quote early so it does not delay closing or change the ratio at the last minute.
If you own five or more rentals with staggered bank renewals, a blanket portfolio loan can combine them under one loan, one payment and one maturity, qualified on the portfolio's combined cash flow, with release provisions for future sales.
Because the blanket looks at total portfolio cash flow, a Mandan fourplex with a strong ratio can offset a newer twin home with heavier specials. For owners tired of yearly renewals, a single long-term maturity is the main attraction.
If you want capital for another purchase, a cash-out refinance up to 75% LTV may fit. If your goal is to end the renewal cycle with the strongest ratio, rate-and-term is usually cleaner. Many owners do rate-and-term now and cash out later.
Either way, a long-term loan makes it easier to plan your next purchase and to show future lenders a steady track record.
Send the address, payoff, maturity date and rents. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below.
If your balloon date is close, tell us right away so we can prioritize the appraisal and abstract work and tell you what to gather first.
Yes. A 30-year DSCR loan can replace a balloon or adjustable bank loan if the rent supports the payment.
Up to 80% LTV on some programs.
At least 60 to 90 days before your maturity date.
Yes, once the property is leased and qualifies.
The standard minimum is 1.0x, with sub-1.0 programs for some files.
Often, at the next annual assessment.
Yes, with a blanket portfolio loan if you own five or more.
No. The loan qualifies on rent, credit and reserves.
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