Short-term money is how many Greater Hartford investors buy: a bridge loan to grab a building with vacancies, or a rehab loan to fix up a tired fourplex in New Britain or a two-family in the South End. The finish line is a long-term loan that the building's rent can carry.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit rentals across Greater Hartford, replacing hard money, bridge loans or an existing mortgage with a long-term loan qualified on the property's rent. Rate-and-term refinances can reach 80% LTV on some programs, 30-year terms are available, the minimum credit score is 620 and LLC borrowers are standard. You do not need W-2s or tax returns.
A rate-and-term refinance pays off your existing loan and replaces it with a new one, without significant cash out. In this market it usually solves one of these problems.
This example is illustrative and not a quote. An investor bought a New Britain fourplex with a bridge loan, renovated two units and leased all four at about $1,450 each, or $5,800 a month. The bridge balance is $380,000, with interest-only payments of about $3,200 a month. The building now appraises at $520,000.
At 80% LTV on a program that allows it, the maximum loan would be $416,000, more than enough. The investor borrows $390,000 to cover the payoff and about $10,000 in closing costs. Estimated principal and interest is about $2,660, and with $900 in taxes and $350 in insurance the payment is about $3,910, for a DSCR of about 1.48x. The monthly cost drops from about $4,450 to about $3,910, and the loan now pays down principal.
| Item | Bridge loan | New DSCR loan |
|---|---|---|
| Balance | $380,000 | $390,000 |
| Loan payment | $3,200 interest-only | $2,660 principal and interest |
| Taxes and insurance | $1,250 | $1,250 |
| Total monthly cost | $4,450 | $3,910 |
| Term | Short-term | Up to 30 years |
| DSCR at $5,800 rent | 1.30x | 1.48x |
The smoothest Hartford-area refinances follow the same sequence. Finish the work, close out the permits with the town building department, register or license the rental where the town requires it, lease the units and then apply. Applying before units are leased can mean using the appraiser's market rent, which some programs allow, but signed leases at market rent make the strongest file.
Order the appraisal with enough time before your short-term loan matures. If the maturity date is close, ask your current lender about extension terms in writing, so you know the cost of a delay before you need it.
Your new loan is limited by both value and rent. Rate-and-term refinances can reach 80% LTV on some programs, so a strong appraisal after the rehab often covers the full payoff. The rent must also cover the new payment, including taxes at the town's current mill rate, at 1.0x or better on most programs.
Mill rates vary widely across Greater Hartford. A fourplex in New Britain, a two-family in East Hartford and a three-family in Hartford can each carry a very different tax bill, which is why the same rent can produce different ratios from town to town. If a revaluation is due soon, leave some cushion.
Rents in renovated units near the hospitals, downtown and the West End tend to run higher than in neighborhoods farther from jobs and transit. In New Britain, units near Central Connecticut State University and the CTfastrak busway stations can lease well. In East Hartford, proximity to the aerospace employers and Route 2 matters. Use rents for comparable renovated units in the same neighborhood, not citywide averages, when you plan the refinance.
Refinance files here tend to need the same items. Gather them while the work is underway.
Not every rate-and-term refinance is a rescue from short-term debt. Some owners refinance to replace an adjustable loan with a fixed payment, to stretch the term and lower the monthly cost, or to consolidate a property into an LLC. We show the before-and-after payment and closing costs on every quote, so you can decide whether the change is worth it.
On older buildings where the owner still pays for heat, a lower monthly payment can make a real difference through a Connecticut winter.
If the new value leaves a lot of room above your payoff and you want cash for the next deal, a cash-out refinance up to 75% LTV may fit better. If you are refinancing five or more rentals at once, a blanket portfolio loan can combine them under one loan with release provisions. For a single building coming off short-term debt, rate-and-term is usually the simplest route.
Send the address, payoff amount, maturity date, rents and the work completed through the form below, or call (877) 298-1001. We will size the loan and show the DSCR at your expected value.
Yes. Paying off hard money or rehab loans with a long-term DSCR loan is one of the main uses of this program.
Up to 80% LTV on some programs, provided the rent covers the new payment at the program minimum.
They give the strongest file. Some programs can use the appraiser's market rent for vacant units, but leases at market rent show the appraiser and underwriter that the rent is real, which matters most on buildings just finished after a rehab.
Taxes are part of the DSCR payment. A higher mill rate means a higher payment and a lower ratio. Mill rates differ widely between Hartford, New Britain, East Hartford and the suburbs, so always use the actual bill.
Ask your current lender about extension terms early, and apply as soon as the work is done and units are leasing.
Yes. LLC borrowers are standard, and a refinance is a common time to make that change. Your attorney can handle the deed transfer before closing.
The minimum is 620. Higher scores and lower leverage can help on files where the DSCR is close to the minimum, and some programs price better with stronger credit.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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