Grand Rapids has one of the tighter rental markets in the Midwest, with strong demand from health care, manufacturing and colleges. A DSCR rate-and-term refinance takes a leased Kent County rental off short-term money and onto long-term financing based on the rent.
In short: A DSCR rate-and-term refinance from LendingStreet pays off the existing loan on a leased Grand Rapids rental and sets a long-term payment sized on the rent. Expect a $150,000 minimum loan, up to 80% LTV on some programs, a 1.0x standard minimum DSCR and a 620 credit floor, with no W-2s or tax returns. Grand Rapids investors often buy older homes and conversions in the city, renovate them with rehab money, pass the city's rental certification, and refinance.
Grand Rapids investors often buy older homes and conversions in the city, renovate them with rehab money, pass the city's rental certification, and refinance. Others refinance existing loans on two-to-four unit buildings that have gained value. The rate-and-term route pays off the short-term debt and sets a long-term payment without pulling cash.
The goal is not cash. It is replacing interest-only, short-term debt with a 30-year amortizing loan available on most programs, so the property carries itself and the next maturity date disappears.
Investors buy in Heritage Hill, Eastown, East Hills, Midtown, Creston, Belknap Lookout, Garfield Park, Alger Heights and the West Side near John Ball Park, plus suburbs such as Wyoming, Kentwood, Walker, Grandville and Rockford. Grand Valley State University's downtown campus and the Medical Mile add tenant demand.
The city has a large stock of late 1800s and early 1900s homes, many converted into two to four units, plus 1920s bungalows and post-war ranch homes in the suburbs. Expect questions about older wiring, roofs and how conversions were permitted.
Grand Rapids appraisals for older conversions need clean records. The appraiser will check that each unit is legal, separately accessible and, ideally, separately metered. Rent comparables near the Medical Mile, Grand Valley's downtown campus and Eastown are strong, because demand in the city has stayed tight.
The two refinances look similar on paper but solve different problems. Rate-and-term ends the existing debt; cash-out turns equity into money for the next property.
Seasoning rules decide how soon after purchase you can refinance and whether the new loan is based on the appraised value or your cost basis. They vary by program, so confirm them before you order the appraisal.
| 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 two-unit conversion in Creston, appraised at $325,000, with a $232,000 balance on a short-term loan. Rent is $2,500 a month across two units. The new loan pays off the existing balance and rolls in about $5,600 of closing costs, for a loan of $237,600, or about 73% of value.
On 30-year amortization, estimated principal and interest is about $1,621 a month. Adding taxes of about $430 and insurance of about $160 brings the total to about $2,211, so the DSCR is about 1.13x against the 1.0x standard minimum. On a two-unit conversion, the appraiser will check that the second unit is legal. A legal, certified second unit is what lets both rents count.
| Item | Amount |
|---|---|
| Appraised value | $325,000 |
| Existing loan payoff | $232,000 |
| Closing costs rolled in | $5,600 |
| New loan amount | $237,600 (about 73% LTV) |
| Estimated principal and interest | $1,621 |
| Taxes, insurance and HOA | $590 |
| Total monthly payment | $2,211 |
| Monthly rent | $2,500 |
| DSCR | About 1.13x |
Michigan taxable value is capped while you own a property but uncaps to the state equalized value after a sale, and rentals pay non-homestead millage. Budget on the post-purchase bill, not the seller's.
Michigan's transfer taxes apply to sales, not refinances. Budget for title, recording, appraisal and lender fees.
Older multi-unit conversions and homes with dated roofs or wiring can price higher. Parts of the city near the Grand River are in flood zones.
Grand Rapids requires rental property to be certified and inspected through the city's rental certification program. Have a current certificate before you apply. Short-term rentals face city licensing limits, so most refinances here use long-term leases. Because Grand Rapids certification is tied to the specific number of units, a house used as a duplex but certified as a single-family home will usually be appraised as one unit. Before refinancing, make sure the certification, the zoning and the way the property is leased all match. Suburbs such as Wyoming and Kentwood run their own rental inspection programs, so check the city that issues your tax bill.
Our investor loans are business-purpose loans on non-owner-occupied property. Expect a credit check, an appraisal with a rent schedule, and a title review.
Order the payoff letter early and ask your current lender about any per-diem interest and release fees. Delays there are the most common reason a refinance closing slips.
Get a quote with the form below or call (877) 298-1001. We review the payoff, the rent and the costs, then confirm loan size and timing. See our Michigan rate-and-term refinance page for statewide details.
Most refinances close in a few weeks once the appraisal and title are in. If your short-term loan matures soon, tell us the date up front so we can plan around it.
Have it ready. The city requires rental certification, and an underwriter may ask for it, especially on multi-unit conversions.
Yes, if the units are legal under city zoning and permitted. Up to 8 units counts as residential for our programs.
Michigan uncaps taxable value after a sale, and rentals pay non-homestead millage. Use the post-purchase bill in your DSCR estimate.
Yes. We refinance 1-8 unit rentals across Kent County, including Wyoming, Kentwood, Walker and Grandville.
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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