A short-term loan that made sense for buying and fixing a Coast rental gets expensive once the house is leased. A rate-and-term refinance swaps it for a long-term loan sized to the rent.
In short: LendingStreet's DSCR rate-and-term refinance replaces hard money, bridge debt or an existing mortgage on 1-8 unit rentals in Gulfport, D'Iberville, Biloxi and along the Coast. It qualifies on the property's rent, not your income, goes up to 80% LTV on some programs and offers 30-year terms. You take little or no cash out; the goal is a lower payment, a longer term or a cleaner structure.
The most common file is a recently rehabbed house: bought with a fix and flip or bridge loan, finished, leased, and now carrying an interest-only payment with a maturity date. Others are refinancing a local bank loan with a balloon coming due, moving a property from personal name into an LLC, or removing a partner from title.
Because DSCR loans qualify on the property, not your personal income, they suit investors whose tax returns show heavy depreciation or irregular self-employment income. The loan looks at the rent, the payment, your credit score and your reserves.
It also does not cap how many rentals you own, which helps Coast investors who have grown past the limits of conventional financing.
This example is illustrative and not a quote. An investor rehabbed a three-bedroom D'Iberville home and leased it for $2,150 a month. The hard money balance is $210,000, with an interest-only payment of about $1,925. Taxes are about $255 and insurance about $310, so the current total is about $2,490 and the rent covers it only about 0.86x.
The home appraises at $290,000. A new DSCR loan of $215,500 covers the payoff and about $5,500 in closing costs, about 74.3% LTV. Estimated principal and interest is about $1,507, for a total of about $2,072 and a DSCR of about 1.04x, with a fixed 30-year schedule instead of a maturity date.
| Item | Hard money today | DSCR refinance |
|---|---|---|
| Loan balance | $210,000 | $215,500 |
| Monthly principal and interest or interest-only | $1,925 | $1,507 |
| Taxes | $255 | $255 |
| Insurance | $310 | $310 |
| Total payment | $2,490 | $2,072 |
| DSCR at $2,150 rent | 0.86x | 1.04x |
| Term | Short-term, maturity date | 30-year schedule |
The best time to line up a DSCR refinance is before your short-term loan's extension fees start. Lease the house first, since a signed lease at market rent is the strongest support for the ratio. If the house is not yet leased, the appraiser's market rent estimate will be used, which can be lower than what you hope to get. Keep receipts and permits for the rehab work; the appraiser will want to see that a new roof or HVAC was installed properly, and on the Coast, the insurer will too.
Values can shift a lot between neighborhoods and even between sides of the railroad tracks. Appraisers pull sales from comparable distance to the water, flood zone and age. A post-rehab home surrounded by older stock may need careful comps, so share your scope of work, before-and-after photos and any recent nearby sales.
Rate-and-term files still have to clear the DSCR test, and the insurance line is the swing factor on the Coast. A new roof, wind straps and a mitigation inspection can lower premiums. If the house sits in a flood zone, an elevation certificate can help your flood quote.
Some programs base the new loan on the appraised value soon after a rehab; others look at purchase price plus documented improvements until the property has been owned for a while. The rules vary by program. Loans start at $150,000; on very low-priced homes, a combined refinance of several rentals or a blanket loan may fit better.
If you only need to retire the existing debt and closing costs, rate-and-term is the cleaner choice and can allow higher leverage on some programs. If you want to pull equity for the next purchase, look at our Gulfport cash-out page, where the limit is 75% LTV.
Most delays on Coast refinances trace back to insurance or paperwork, not the loan itself. A homeowner's policy left over from before the rehab may not fit a rental; you need a landlord or dwelling fire policy with wind coverage and, in flood zones, flood insurance naming the new lender.
Permits matter too. If the rehab included a new roof, electrical or structural work, the city may need to close out the permit, and an open permit can hold up the appraisal or title. Ask the building department for final inspections before you apply.
Give yourself time. Ordering the appraisal, clearing title and binding insurance usually take a few weeks, and a hard money lender's extension fee can arrive faster than you expect. Starting the refinance as soon as the lease is signed protects your margin.
Finally, check any liens from contractors. Many Coast rehabs use several subcontractors, and each one can file. Mississippi allows contractors and suppliers to file liens for unpaid work, and title will need them cleared or released before closing.
Send the address, current payoff, lease and insurance figures through the form below or call (877) 298-1001. We will show you the new payment and DSCR at a few loan amounts. Our investor loans are business-purpose loans on non-owner-occupied property. Statewide details are on our Mississippi rate-and-term page.
A refinance that pays off existing debt and closing costs with little or no cash to you, qualified on the property's rent rather than personal income.
Often, yes. Some programs use the post-rehab appraised value; others limit the loan until the property has been owned longer. It varies by program.
Up to 80% LTV on some rate-and-term programs. Leverage can be lower on 5-8 unit properties and larger balances.
A signed lease is the strongest support. Without one, the appraiser's market rent estimate is used.
It can lower your DSCR if premiums are high. Get current wind, hazard and flood quotes before you apply.
Yes. Many investors use a rate-and-term refinance to retitle into an LLC.
Yes. Maturing bank loans on 1-8 unit rentals are a common rate-and-term payoff.
Timing depends mostly on the appraisal, title and insurance. Having the lease, payoff letter and insurance quotes ready keeps it moving.
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