Detroit investors who bought and rehabbed with short-term money usually reach the same fork: the renovation is done, a tenant is in, and the hard money clock is still running. A DSCR rate-and-term refinance replaces that loan with long-term debt sized on the rent.
In short: Yes. LendingStreet refinances leased 1-8 unit rentals in Detroit with DSCR rate-and-term loans that pay off hard money, bridge or existing debt without taking cash out. Loans start at $150,000, go up to 80% LTV on some programs, and qualify on the property's rent with a 1.0x standard minimum DSCR and a 620 minimum credit score. Detroit is a rehab-first market.
Detroit is a rehab-first market. Many single-family and two-family rentals were bought below replacement cost, gutted, and brought back with a short-term rehab or bridge loan. Once the city's rental certificate of compliance is in hand and the unit is leased, the expensive interest-only note no longer fits the asset. Because our loans start at $150,000, the Detroit refinances we see are usually renovated homes in stronger pockets, two-family flats, small multi-unit buildings, or several properties refinanced together.
Rate-and-term means the new loan pays off the existing debt plus closing costs, with little or no cash back. You usually get a lower or fixed long-term payment, a longer term, and an end to the maturity date on a short-term note.
Inside the city, investors focus on Bagley, the University District, Grandmont-Rosedale, Russell Woods, Morningside, East English Village and Warrendale, plus higher-value streets in Boston-Edison and Indian Village. Just outside the city, Redford Township, Dearborn Heights, Southfield, Westland, Taylor, Warren and Hazel Park draw rental buyers who want steadier values and suburban school districts.
The housing stock is mostly 1920s to 1950s brick bungalows, colonials and Tudors, plus upper-and-lower two-family flats. Older plumbing, galvanized supply lines, knob-and-tube wiring and basement water are the usual rehab items, and they are what an appraiser and insurer will look at first on the refinance.
Appraisals in Detroit can swing block by block, because a fully renovated house may sit next to a vacant lot or a home that needs everything. Appraisers lean on recent renovated sales nearby, so give them your scope of work, permits and photos. The rent schedule will compare your lease with similar renovated rentals in the same neighborhood, not citywide averages.
Most investors leaving short-term debt choose rate-and-term, because it allows higher leverage on some programs and fewer questions about seasoning. Cash-out makes sense when you have built equity and want to fund the next deal.
Timing matters. Some programs use the purchase price plus documented improvements until the property has been owned for a set period, and others use the new appraised value sooner. Ask which applies before you start.
| Item | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing debt and closing costs | Pull equity out as cash |
| Max LTV | Up to 80% on some programs | Up to 75% |
| Cash to you | Little or none | Equity above the payoff |
| Seasoning | Varies by program | Varies by program; often longer |
| Best fit | Ending hard money or bridge debt | Funding the next purchase |
This example is illustrative and not a quote. An investor owns a renovated brick colonial in Grandmont-Rosedale, appraised at $245,000, with a $168,000 balance on a short-term loan. Rent is $1,900 a month. The new loan pays off the existing balance and rolls in about $5,200 of closing costs, for a loan of $173,200, or about 71% of value.
On 30-year amortization, estimated principal and interest is about $1,182 a month. Adding taxes of about $330 and insurance of about $135 brings the total to about $1,647, so the DSCR is about 1.15x against the 1.0x standard minimum. In Detroit the tax line is the one that moves this ratio most. If the uncapped bill came in $100 a month higher, the DSCR would still clear 1.0x, but with less room.
| Item | Amount |
|---|---|
| Appraised value | $245,000 |
| Existing loan payoff | $168,000 |
| Closing costs rolled in | $5,200 |
| New loan amount | $173,200 (about 71% LTV) |
| Estimated principal and interest | $1,182 |
| Taxes, insurance and HOA | $465 |
| Total monthly payment | $1,647 |
| Monthly rent | $1,900 |
| DSCR | About 1.15x |
Michigan taxes rental property on taxable value, which is capped while you own it but uncaps to the state equalized value (half of market value) the year after a sale. A rental also does not get the principal residence exemption, so it pays the non-homestead school millage. Detroit's combined millage is among the highest in the state, so budget on your actual post-purchase bill, not the seller's.
A refinance does not trigger Michigan's state and county transfer taxes, which apply to sales. Expect title, recording, appraisal and lender fees; ask your title company for a written estimate.
Older Detroit homes can be harder to insure, and roof age, electrical and plumbing updates drive the premium. After the 2021 basement flooding across Wayne County, sewer and water backup coverage is worth adding even though it raises the cost.
Detroit requires rental property to be registered and to pass inspection for a certificate of compliance, and many older homes also need lead clearance. Lenders and tenants increasingly ask for it, so have the certificate or proof of a scheduled inspection ready before you apply. Suburbs set their own registration and inspection rules, and short-term rentals are regulated city by city.
Our investor loans are business-purpose loans on non-owner-occupied property. You will sign for the loan personally, and the credit and background review is part of the file.
If units are vacant, ask how the program treats them. Some use market rent from the appraisal; others want a signed lease before closing. Signed leases make the file cleaner.
Send us the property address, the payoff amount, the rent and the tax and insurance figures through the form below, or call (877) 298-1001. We will size the loan, show the estimated DSCR, and flag anything local that needs attention. For the statewide picture, see our Michigan rate-and-term refinance page.
If your hard money or bridge loan has an extension deadline, start at least 30 to 45 days ahead. That leaves time for the appraisal, title and any repair items.
Have it if you can. Detroit requires rental registration and inspection, and an underwriter may ask for proof that the property is compliant or on track. A missing certificate can slow the file even when the numbers work.
Our DSCR loans start at $150,000, so a single lower-value house usually does not fit on its own. Investors with several Detroit homes often refinance them together on one loan; see our blanket portfolio option.
Michigan uncaps taxable value after a transfer, and rentals pay non-homestead millage. Use the bill that reflects your ownership when you estimate the DSCR.
Yes. Upper-and-lower flats are two-unit properties, and the DSCR uses the combined rent of both units. Each unit should be registered and leased, and the appraiser will want access to both.
Up to 80% LTV on some programs, with loans from $150,000 and no stated maximum. The rent must cover the payment at the program minimum, usually 1.0x.
The minimum is 620. Higher scores can improve terms.
The DSCR basics are the same, but max LTV can be lower on 5-8 units and larger balances; it varies by program.
No. DSCR loans qualify on the property's rent. You do not need W-2s or tax returns.
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