DC investors often buy a rowhouse, convert or renovate it with short-term money and then need a long-term loan once tenants are in place. A DSCR rate-and-term refinance replaces that loan with a fixed payment qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in District of Columbia, up to 80% LTV on some programs, qualified on the property's rent with no W-2s or tax returns. The new loan pays off your existing hard money, bridge or higher-rate loan plus closing costs, with only a small amount of cash back allowed on most programs. Our investor loans are business-purpose loans on non-owner-occupied property, starting at $150,000 with a 620 minimum credit score. In DC, the rental license, rent stabilization status and the recordation tax on the new deed of trust are the items to sort out early.
This kind of refinance swaps one loan for another. The new loan pays off the old one plus closing costs, and the cash you can receive at closing is limited to a small allowance that varies by program. Anything more is treated as a cash-out refinance with a lower LTV ceiling.
The appeal is leverage and terms. Some programs allow up to 80% LTV on a rate-and-term, and 30-year terms are available. The file is underwritten on the property's rent compared with the new payment, with a standard minimum DSCR of 1.0x and a 620 minimum credit score.
Much of DC's small rental stock is rowhouses, many split into a main unit and an English basement, plus two- to four-unit conversions and small walk-up buildings. Investors buy with hard money, renovate and then refinance into permanent debt. High values mean the loan balance is large, so getting the right long-term terms matters.
Because the loan qualifies on rent, the refinance does not depend on your personal income, which matters to investors whose tax returns show heavy depreciation or self-employment write-offs. The property has to carry itself, and that is the test.
The most common rate-and-term refinance we see is the exit from short-term debt. You bought with a hard money or bridge loan, finished the work, placed a tenant and now need permanent financing before the short-term loan comes due. The bridge-to-DSCR guide walks through timing in more detail.
How the new loan is sized depends partly on how long you have owned the property. Some programs use the new appraised value after a period of ownership; others cap the loan near your cost basis if you bought recently. Seasoning rules vary by program, so check them before you count on the after-repair value.
DC charges recordation tax that can apply to deeds of trust as well as deeds, and the amount on a refinance depends on how the transaction is structured. This can be a meaningful line, so ask your title company for an estimate before you lock.
Rental properties in DC need a basic business license for rental housing, and units must be registered. Lenders and appraisers may ask for it, and missing licensing can complicate leases. If you are moving title into an LLC, check transfer and recordation tax treatment first.
DC has a rent stabilization program that covers many older rental units, with exemptions for some small owners and newer buildings. Whether your units are covered affects how fast rent can rise, so the DSCR is set on current leases. Know the status of each unit before applying.
DC property taxes are moderate by regional standards, though non-owner-occupied rentals do not get the homestead deduction. Condo and HOA fees are common for units in buildings. DC also limits short-term rentals largely to a host's primary residence, so investment properties usually need long-term tenants.
This example is illustrative and not a quote. An investor owns a rowhouse with a legal basement unit in Petworth appraised at $820,000. The existing hard money loan used to buy and convert the rowhouse has a payoff of $560,000, costs about $4,900 a month interest-only and matures in 4 months. Rent is $4,950 a month, and taxes, insurance and any HOA dues run $800 a month.
Rolling about $15,000 of closing costs into the loan gives a new balance of $575,000, or about 70.1% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $3,825, so the full payment is about $4,625 and the DSCR is about 1.07x. The short-term maturity is gone and the payment is fixed. That ratio is close to the 1.0x minimum, so a higher insurance quote or tax bill could push it under; check both before you apply.
| Item | Amount |
|---|---|
| Appraised value | $820,000 |
| Existing loan payoff | $560,000 |
| Closing costs rolled in | $15,000 |
| New loan amount | $575,000 |
| Loan-to-value | 70.1% |
| Principal and interest (30 years) | About $3,825 |
| Taxes, insurance and HOA | $800 |
| Total monthly payment | About $4,625 |
| Monthly rent | $4,950 |
| DSCR | About 1.07x |
Both are qualified on rent, but the purpose drives the limits. A quick side-by-side helps decide which one fits the property.
Some investors in District of Columbia do both in stages: a rate-and-term refinance to exit short-term debt now, then a cash-out later once seasoning and value support it. Others go straight to cash-out if the appraisal is strong and they need capital for the next deal.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing loan and costs | Pay off loan and take equity |
| Maximum LTV | Up to 80% on some programs | Up to 75% |
| Cash at closing | Small allowance, varies by program | Up to the LTV limit |
| Minimum DSCR (standard) | 1.0x | 1.0x |
| Minimum credit score | 620 | 620 |
| Income documents | Rent only, no W-2s or tax returns | Rent only, no W-2s or tax returns |
Petworth, Brightwood, Brookland and Columbia Heights have many rowhouses with basement units. Capitol Hill and Navy Yard carry higher prices and tighter ratios, while areas east of the river, including Anacostia and Congress Heights, offer lower entry prices. Small 5-8 unit walk-ups are common in older neighborhoods and may see lower maximum LTV; 9+ unit buildings are commercial loans.
These items cover most of what underwriting will ask for. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet refinances non-owner-occupied 1-8 unit rentals in District of Columbia with DSCR loans starting at $150,000, up to 80% LTV on some programs.
DC recordation tax can apply to deeds of trust, and on a refinance the amount depends on the structure of the transaction. Ask your title company for the figure early.
Most programs allow a small amount of cash back at closing, but the limit varies. Taking more turns the loan into a cash-out refinance, which has a 75% LTV ceiling.
Rental properties in DC need a basic business license for rental housing. Lenders may ask for it, and having it in place keeps leases and underwriting clean.
Seasoning varies by program. Recently purchased properties may be sized on purchase price plus documented improvements rather than the new appraised value.
Yes, if the unit is legal and leased. Units without proper approvals may be excluded from rent and value.
Standard programs need at least 1.0x. Sub-1.0 DSCR programs exist, or you can lower the balance by bringing cash to closing.
Yes. 30-year terms are available on DSCR loans, which is the main reason investors use a rate-and-term refinance to replace short-term or balloon debt.
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