A short-term rehab loan or a community bank balloon note can work well while you fix and lease a property. Once that work is done, a long-term loan that matches a long-term hold is often the better fit.
In short: LendingStreet refinances 1-8 unit rentals in Charleston and the Kanawha Valley out of hard money, bridge loans and maturing notes into DSCR loans with 30-year terms available, up to 80% LTV on some programs. You qualify on the property's rent, not your income, and the standard minimum DSCR is 1.0x. A rate-and-term refinance pays off what you owe plus costs without taking extra cash.
Several situations come up again and again in this market.
This example is illustrative and not a quote. An investor bought and renovated a Kanawha City triplex with a $160,000 bridge loan. Interest-only payments run about $1,300 a month and the loan matures soon. The finished building appraises at $245,000 and the three units rent for $2,400 combined.
A rate-and-term refinance pays off the bridge plus about $5,000 in costs, for a new loan of $165,000, about 67% LTV. Estimated principal and interest on a 30-year term is about $1,154. With taxes of $300 and insurance of $175, the payment is about $1,629 and DSCR is about 1.47x.
Notice what changed. The monthly loan payment is close to what the bridge cost, but now it pays down principal, the term is 30 years and there is no maturity date forcing a sale or extension. That is often the main benefit of a rate-and-term refinance.
| Bridge loan | DSCR refinance | |
|---|---|---|
| Balance | $160,000 | $165,000 |
| Payment type | Interest-only | Principal and interest |
| Term | Short-term, maturing | 30 years available |
| Monthly loan payment | $1,300 | $1,154 |
A rate-and-term refinance replaces your current loan and closing costs. Because no extra cash comes out, leverage limits can be higher, up to 80% LTV on some programs, compared with 75% on cash-out. If you need money back for the next project, compare both options with the same appraisal.
A rate-and-term refinance can also make sense when the property's value has risen but you do not need cash. Keeping the loan smaller leaves more room on the DSCR and reduces your monthly payment.
Lenders want the work finished and tenants in place. Have leases signed and the property ready for the appraiser. Some programs also look at how long you have owned the property. Start the refinance well before your current loan matures so you are not forced into an extension.
Order the appraisal once the property looks finished. Leftover punch-list items, missing appliances or an empty unit can lead to a lower value or a condition on the loan, which delays closing.
Many West Virginia investors have financed rentals with local banks on five-year terms that end in a balloon payment. When that date approaches, the choice is to renew on the bank's terms or move to a longer loan. A DSCR loan with a 30-year term removes the renewal cycle and qualifies on the property rather than your full financial picture.
If you own several properties on one bank note, ask about a blanket portfolio loan.
Balloon renewals also tend to come with new fees, a fresh rate and sometimes a new appraisal every few years. A long-term loan removes that repeated cost and uncertainty from your planning.
Before you apply, confirm the property tax figure at the non-owner-occupied class with the Kanawha County assessor, get a current insurance quote with flood determination, and gather leases. If you are inside a city, ask your accountant whether any local business taxes apply to rental income, since some West Virginia cities levy them.
Gather the property's repair invoices as well. A record of what was done and when helps the appraiser and shortens the review, particularly on older Kanawha City and East End buildings where buyers and lenders want to know systems were updated.
We refinance single-family homes, 2-4 unit properties and 5-8 unit residential buildings. LLC ownership is standard. Buildings with 9 or more units are commercial and covered separately.
Each property type has its own considerations. On 2-4 unit properties, the DSCR uses combined rent. On 5-8 unit buildings, the maximum LTV may be lower and varies by program.
Moving from a short-term, interest-only loan to a fully amortizing one changes your cash flow in two ways. Each payment reduces the balance, and the payment stays predictable for the life of the loan. For a Charleston landlord planning to hold for years, that predictability matters more than a few dollars a month.
It also frees you to plan the next purchase. Without a maturity date on the current property, you can decide when to buy or sell based on the market, not on a lender's deadline. Some investors refinance a stabilized property first, then use a bridge or fix and flip loan on the next project.
Send the current loan statement, payoff date, leases, insurance and an estimated value. We will tell you the likely loan amount and DSCR, and whether rate-and-term or cash-out fits better.
If you have several properties coming off short-term loans at once, tell us. We can look at them together and suggest an order that keeps your cash flow steady.
A refinance that pays off your existing loan and closing costs without taking extra cash. It is used to get a longer term, a lower payment or better terms. Closing costs can be included in the new loan.
Yes. Once repairs are done and the property is leased, a DSCR loan can replace a hard money or bridge loan.
Up to 80% LTV on some programs for rate-and-term. Cash-out is up to 75% LTV. Your DSCR must meet the program minimum.
No. DSCR loans qualify on the property's rent. Leases and the appraisal support the rent figure.
Several months ahead. That leaves time for the appraisal, title and insurance without pressure.
Yes. LLC borrowers are standard, and members usually sign for the loan personally.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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