Buffalo is a favorite market for the buy, renovate, rent and refinance approach. Prices leave room for a meaningful rehab, rents on renovated doubles are solid, and once the work is done the short-term loan needs to be replaced with long-term debt the rent can carry.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit rentals in Buffalo and across Erie and Niagara counties, paying off hard money, bridge loans or an existing mortgage with a long-term loan that qualifies on the property's rent. Rate-and-term refinances can reach 80% LTV on some programs, 30-year terms are available, the minimum credit score is 620 and LLC borrowers are standard. No W-2s or tax returns are required.
A rate-and-term refinance replaces your current loan without taking significant cash out. In the Buffalo market, investors use it mostly for these reasons.
This example is illustrative and not a quote. An investor bought and renovated a Kaisertown double with a short-term loan. The balance is $205,000, with interest-only payments of about $1,880 a month. The double now appraises at $285,000, and the flats lease for $1,250 and $1,300.
The new DSCR loan covers the payoff and about $8,000 in closing costs, for a loan of $213,000, about 75% of value. Estimated principal and interest is about $1,453. With $480 in taxes and $180 in insurance, the payment is about $2,113 and DSCR is about 1.21x. The monthly cost falls from about $2,540 to about $2,113, and the loan amortizes over up to 30 years.
| Item | Short-term loan | New DSCR loan |
|---|---|---|
| Balance | $205,000 | $213,000 |
| Loan payment | $1,880 interest-only | $1,453 principal and interest |
| Taxes and insurance | $660 | $660 |
| Total monthly cost | $2,540 | $2,113 |
| Term | Short-term | Up to 30 years |
| DSCR at $2,550 rent | 1.00x | 1.21x |
A Buffalo refinance moves fastest when everything the new lender needs is already done. Most of these items are outside the lender's control, so start on them during the rehab.
Rate-and-term refinances can reach 80% LTV on some programs, so a good appraisal after the rehab often covers the full payoff. The rent must also cover the new payment at 1.0x or better on most programs.
Because DSCR loans start at $150,000, the refinance works best when the finished property has enough value to support a loan above that level. A lower-priced double that needs only a $110,000 loan will not fit, so plan the project size with the refinance in mind.
New York's mortgage recording tax applies when a new mortgage is recorded. On a rate-and-term refinance, a CEMA can sometimes reduce the tax by having the new lender take over the existing mortgage, so tax is paid only on any additional amount. Many hard money and private lenders are not set up to assign their mortgages, so this is not always possible. Ask your attorney whether a CEMA is realistic for your payoff, and budget for the full tax if it is not.
Leasing in Buffalo is strongest from late spring through summer, and units near UB's South Campus and Buffalo State follow the academic year. If your rehab finishes in November, leasing the last unit may take longer than it would in June. Ask your short-term lender about extension terms in writing well before maturity, and apply for the refinance as soon as units are leased.
Winter can also slow appraisals and inspections. Building in a few weeks of cushion saves extension fees and stress.
If you are renovating more than one Buffalo property at a time, stagger the finish dates. Refinancing one building while the next is still under construction keeps your short-term debt manageable and gives you a track record the next lender will see.
Not every refinance follows a rehab. Some Buffalo owners replace an adjustable loan with a fixed payment, extend the term to lower the monthly cost, or move a rental into an LLC. We show the before-and-after payment and the closing costs, including recording tax, so you can judge whether the change pays off.
On doubles where the owner still pays for heat, a lower monthly payment gives the property more room to absorb a hard winter. Converting to separate furnaces before the refinance can help both your cash flow and the appraisal.
If the new value leaves plenty of room above your payoff, a cash-out refinance up to 75% LTV may make more sense. If you are refinancing five or more Buffalo rentals at once, a blanket portfolio loan can combine them under one loan and one closing. For a single property coming off short-term debt, rate-and-term is usually the cleanest path.
Send the address, payoff amount, maturity date, rents and the work completed through the form below, or call (877) 298-1001. We will size the loan and show the DSCR at your expected value.
Yes. Paying off hard money or rehab loans with a long-term DSCR loan is the main use of this program, and it fits the buy, renovate and rent approach many Buffalo investors follow.
Up to 80% LTV on some programs, if the rent covers the new payment at the program minimum. Closing costs, including recording tax, can often be included within that limit.
Yes, $150,000. Plan the size of your project so the finished value supports a long-term loan above that level, or the refinance exit will not work.
Generally yes. A CEMA may reduce it if your current lender can assign the mortgage, which many private and hard money lenders cannot do.
They make the strongest file. Some programs can use the appraiser's market rent for vacant units, but signed leases at market rent show that the renovated flats really do rent at the level the loan is based on.
In the city, rental properties must be registered and are subject to inspection. Have it done before you apply, and check the rules in suburban towns, which set their own.
The minimum is 620. Stronger credit and lower leverage help when the DSCR is close to the minimum.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.