Short-term debt is how many Gallatin Valley investors get into a property: a bridge loan to win a contract, a construction loan to build a fourplex, or a seller note on a Livingston rental. A rate-and-term refinance is how they get out of it.
In short: LendingStreet refinances 1-8 unit rentals in Bozeman, Belgrade, Big Sky and the surrounding area with DSCR rate-and-term loans that pay off existing debt without taking cash out, up to 80% LTV on some programs. The loan qualifies on the property's rent, or on projected short-term revenue on some STR programs, with no W-2s or tax returns, a 620 minimum credit score and 30-year terms available. The goal is a long-term loan with no looming maturity that the income can carry at the 1.0x standard minimum.
A rate-and-term refinance replaces an existing loan with a new one to change the payment, the term or the structure. Normal closing costs can be rolled in, but you do not take meaningful cash out. Because of that, LTV limits are often higher than on a cash-out, up to 80% on some programs.
In the Gallatin Valley, investors most often use it to replace interest-only short-term debt with a 30-year loan once a property is finished, leased or has a booking history.
The loans we see paid off most often fall into these groups.
| Existing loan | Typical situation | What the refinance needs |
|---|---|---|
| Bridge loan | Bought fast, now leased or booked | Leases, rent comparables or STR revenue support |
| Construction loan | Belgrade or Four Corners build-to-rent finished | Certificate of occupancy, leases |
| Hard money after a rehab | Bozeman or Livingston remodel complete | Completed work, appraisal, leases |
| Seller note or contract for deed | Balloon coming due | Contract, payment history, payoff |
| Bank loan with a reset | Payment change or short maturity | Note terms and statement |
Big Sky is the valley's main short-term rental market. Investors often buy a condo or home there with a bridge loan, set up management and build a booking record, then refinance. Some of our STR programs can qualify on projected short-term revenue, for example from a third-party revenue projection, rather than a long-term lease. Programs differ in how they count revenue and expenses, so ask how yours works.
HOA dues in Big Sky complexes can be substantial, and they count in the payment. Confirm the association allows nightly rentals and check whether it requires a particular management company.
This example is illustrative and not a quote. An investor bought a Big Sky condo with a bridge loan that now has a balance of $720,000 and an interest-only payment of about $5,700 a month. After a season of bookings and a revenue projection, the condo appraises at $1,100,000, and the program uses projected short-term revenue averaging $8,500 a month.
A rate-and-term DSCR loan of $720,000, about 65% of value, pays off the bridge loan. Estimated principal and interest is about $4,912, and with HOA dues of $1,100, taxes of $650 and insurance of $250, the total payment is about $6,912, for a DSCR of about 1.23x. The monthly payment is higher than the interest-only bridge payment, but the loan now amortizes over 30 years with no maturity date to manage.
| Item | Bridge loan | DSCR refinance |
|---|---|---|
| Balance | $720,000 | $720,000 |
| Monthly payment | $5,700 interest-only | $6,912 with HOA, taxes, insurance |
| Term | Short-term | 30 years |
| Income used | Not required | Projected STR revenue, $8,500 a month |
| DSCR | Not used | 1.23x |
Build-to-rent projects in Belgrade and Four Corners usually end with a rate-and-term refinance. Once the certificate of occupancy is issued and units are leased, the DSCR loan pays off the construction loan. Lenders will want the final inspection, leases, an appraisal and the construction loan payoff.
If the units are leased but not yet occupied, ask what your program accepts. Our construction-to-DSCR guide covers the handoff, and our Bozeman construction page covers the build itself.
For long-term rentals, the refinance qualifies on leases or market rent. Because Bozeman prices are high compared with rents, the ratio often decides the loan amount. If the rent cannot support a payment large enough to pay off your current loan, you may need to bring cash to closing or look at a sub-1.0 DSCR program on some files.
Livingston, Belgrade and Manhattan rentals often have more rent per dollar of value, which makes a full payoff easier.
Seller notes and contracts for deed are common on older Livingston and Park County rentals. When the balloon arrives, a rate-and-term refinance can pay the seller in full. Bring the recorded contract, the payment history and the payoff figure so title can confirm the contract is satisfied at closing.
In Belgrade and Four Corners, a refinance of a newer duplex or fourplex is often straightforward because there are recent comparable sales and leases. Older Bozeman properties near downtown can take a little longer for the appraiser to support. Share recent leases and improvements up front to help.
Montana does not record sale prices, so appraisers rely on MLS data. Big Sky condos and newer valley townhomes usually have reasonable comparables, but custom homes and older Livingston properties may not. Share your improvements, leases and any sales you know of with your loan officer.
If the appraisal comes in below your target, a lower LTV may still pay off the existing loan, or you can bring funds to close the gap.
For STR properties, the appraiser may also complete a rent or revenue analysis. Booking records, the management agreement and a third-party projection all help support the income the program uses, and they help explain seasonal swings between ski season, summer and the quieter months in between.
Gather these items to keep the refinance on schedule.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the property, payoff, income documents and maturity date, and we will size the refinance and show the new payment. Tell us your deadline on the first call so appraisal and title can be scheduled around it. Call (877) 298-1001 or use the form below.
Up to 80% on some programs, often lower on larger balances and 5-8 unit buildings.
On some STR programs, yes, using projected short-term revenue such as a third-party projection. HOA rules must allow nightly rentals.
Yes, once the property is complete and leased. The DSCR loan pays off the construction loan.
No. The loan qualifies on the property's income, not your personal income.
You may need to bring cash to closing, refinance at a lower amount or look at a sub-1.0 DSCR program on some files.
Usually yes, within the LTV limit.
If the new loan only pays off the bridge balance and normal closing costs, it is generally rate-and-term.
Yes, across Park and Gallatin counties, with a $150,000 minimum loan.
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