Boston's rental stock is built around two-families and triple-deckers. Investors buy them with short-term money, renovate unit by unit and refinance once the leases are signed, usually on the September 1 cycle that drives the whole market.
In short: LendingStreet refinances Boston-area 1-8 unit rentals out of hard money, bridge and existing loans with 30-year DSCR loans that qualify on combined 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. Investors here should plan for the loss of the residential exemption, Massachusetts lead law compliance and a city that bars investor-owned short-term rentals.
Dorchester, Roxbury, Jamaica Plain, Roslindale, Hyde Park, East Boston and Brighton hold much of the city's two- and three-family stock. Nearby, Somerville, Cambridge, Quincy, Malden, Medford, Chelsea, Revere and Lynn have similar buildings at a range of prices.
Universities, hospitals and the life sciences sector create deep rental demand. Many leases start September 1, so investors time renovations and refinances around that date.
| Area | Typical rental stock | What to check before you refinance |
|---|---|---|
| Dorchester, Roxbury, Mattapan | Triple-deckers and two-families | Lead compliance and unit legality |
| Jamaica Plain, Roslindale, Hyde Park | Two-families and single-family | Higher values, tax without residential exemption |
| East Boston, Chelsea, Revere | Triple-deckers and small buildings | Flood zones near the harbor |
| Somerville, Malden, Quincy | Two- and three-family homes | Local rental rules and condo conversion history |
The usual sequence is simple: finish the work, get a tenant in place, order the appraisal and pay off the short-term lender with a long-term DSCR loan. Underwriting looks at the lease, the appraised value and the full monthly payment including taxes and insurance, with 1.0x as the standard minimum ratio.
Boston investors often renovate one unit at a time while others stay occupied. Before refinancing, make sure every unit is leased or has a clear market rent, and that the work was permitted with Inspectional Services.
Hard money in Boston is often sized on after-repair value, and the refinance appraisal will test that number. Bring signed leases for every unit, permits for the work and the rehab budget so the appraiser can support the finished value.
This example is illustrative and not a quote. An investor bought and renovated a Dorchester triple-decker with a hard money loan. All three units lease for $2,800 each on September leases, and the building appraises at $1,050,000. The payoff is $720,000.
The new loan of $735,000 covers the $720,000 payoff plus $15,000 in closing costs, about 70% of the $1,050,000 value. Estimated principal and interest on a 30-year term is about $5,076. With taxes of $963 and insurance of $380 a month, the full payment is about $6,419 and DSCR is about 1.31x on $8,400 of rent.
Three rents carrying one payment is the reason triple-deckers remain the core of Boston investor lending.
Underwriting divides the rent by the full monthly payment, including taxes and insurance, to get the ratio. Use your actual tax bill and a current insurance quote, not estimates from the listing, so the figure you see is close to the one the underwriter sees.
| Item | Before: hard money note | After: DSCR rate-and-term |
|---|---|---|
| Loan balance | $720,000 | $735,000 |
| Monthly principal and interest | $6,900 (interest only) | $5,076 |
| Taxes, insurance | $1,343 | $1,343 |
| Total monthly payment | $8,243 | $6,419 |
| DSCR at $8,400 rent | About 1.02x | About 1.31x |
| Term | Short-term, due soon | 30 years |
Boston offers a residential exemption that lowers the tax bill for owner-occupants. Investor-owned buildings do not get it, so when you buy from an owner-occupant the bill usually rises. Somerville, Cambridge, Quincy and other nearby cities have similar exemptions.
Massachusetts property taxes are limited overall by Proposition 2 1/2, but individual bills still change with assessments each year. The deed excise applies to sales, not refinances. Ask your closing attorney for the full set of refinance costs.
The Massachusetts Lead Law requires owners to delead or control lead hazards in homes built before 1978 when a child under six lives there. It applies to most of Boston's older stock, so keep your letter of compliance on file.
Boston allows short-term rentals only in owner-occupied buildings, so investor-owned units must be leased long term. The city also runs a rental registration and inspection program.
Tenant protections in Massachusetts are strong, including strict security deposit rules, so follow them closely on every lease you sign before the refinance.
Two- and three-family homes qualify on the combined rent of all units. Larger buildings with five to eight units in Allston, Brighton and Dorchester are still residential for DSCR purposes, though max LTV varies by program and larger balances get more review.
Condo conversions have removed many two- and three-families from the rental supply, which helps keep demand strong for the buildings that remain rentals.
Many investors start by asking for cash-out and end up with rate-and-term once they see the payment. A smaller balance means a higher DSCR, which can open more programs. Cash-out tops out at 75% LTV and its seasoning varies by program, while rate-and-term can reach 80% LTV on some programs.
Boston values often support cash-out, but larger balances can lower max LTV and raise the payment. Rate-and-term keeps the file simpler.
Have these ready when you request a quote. A complete package gets a faster answer.
Use the form below with the address, payoff amount, lease rent and an estimate of value. LendingStreet refinances investor rentals in Suffolk, Middlesex, Norfolk and Essex counties, and we will run the DSCR on your actual tax and insurance numbers before quoting. Our investor loans are business-purpose loans on non-owner-occupied property. Statewide details are on our Massachusetts rate-and-term refinance page, or call (877) 298-1001.
Yes. It applies only to owner-occupants, so investor-owned buildings pay tax without it.
No, for investor-owned units. Boston allows short-term rentals only in owner-occupied buildings.
It affects your liability and compliance. Keep your letter of compliance on file and share it with underwriting if asked.
Yes. LLC borrowers are standard on our DSCR programs.
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.
Yes. LLC borrowers are standard on our DSCR programs. Members typically sign for the loan personally, and we review the operating agreement and EIN letter.
The minimum credit score is 620. Stronger credit and lower leverage can open more program options.
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