Hawaii values are high and ratios are tight, so the long-term loan on a rental needs to be right. A DSCR rate-and-term refinance replaces a bridge loan, hard money or a higher-rate loan with long-term debt qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Hawaii, 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 Hawaii, leasehold land, county short-term rental limits and legal status of ohana or accessory units are the items that shape most files.
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.
Hawaii rental stock includes single-family homes with ohana or accessory units, condos in Honolulu and resort areas, and small walk-up buildings. Investors who bought with short-term financing, or who used a bridge loan while adding a unit, refinance into permanent debt. Rate-and-term is often the right choice here because keeping the balance close to the payoff helps ratios clear the minimum.
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.
Hawaii's conveyance tax applies to transfers of real property rather than a standard refinance, and there is no state mortgage tax. Costs on a refinance are mostly recording, escrow, title, appraisal and lender charges.
Some Hawaii properties, especially older condos, sit on leasehold land rather than fee simple. Leasehold terms, remaining lease years and lease rent all affect eligibility and value, so know the tenure before you apply.
Property taxes are set by each county, and some counties tax residential property that is not the owner's home at a higher rate than homes owners live in. Check the property's tax class and current bill, since it feeds the DSCR payment.
Short-term rentals are heavily regulated. Oahu restricts most rentals under a long minimum stay outside resort areas, and other counties have their own permit systems. Hurricane coverage, high condo fees and lava zone ratings on the Big Island can also affect insurance and eligibility.
This example is illustrative and not a quote. An investor owns a single-family home with a permitted ohana unit on Oahu appraised at $1,050,000. The existing bridge loan used to buy the home and finish the ohana unit has a payoff of $700,000, costs about $6,120 a month interest-only and matures in 4 months. Rent is $6,500 a month, and taxes, insurance and any HOA dues run $650 a month.
Rolling about $18,000 of closing costs into the loan gives a new balance of $718,000, or about 68.4% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $4,777, so the full payment is about $5,427 and the DSCR is about 1.20x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $1,073 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $1,050,000 |
| Existing loan payoff | $700,000 |
| Closing costs rolled in | $18,000 |
| New loan amount | $718,000 |
| Loan-to-value | 68.4% |
| Principal and interest (30 years) | About $4,777 |
| Taxes, insurance and HOA | $650 |
| Total monthly payment | About $5,427 |
| Monthly rent | $6,500 |
| DSCR | About 1.20x |
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 Hawaii 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 |
Honolulu and the rest of Oahu hold most of the state's long-term rental demand, including military households and condos in urban Honolulu. Hilo and the Big Island offer lower prices with lava zone and insurance considerations. Maui and Kauai have strong rental demand but strict STR rules. Ratios are often tight, and some investors use sub-1.0 DSCR programs or larger paydowns.
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 offers rate-and-term DSCR refinances on 1-8 unit investment properties in Hawaii, from $150,000 with no stated maximum, qualified on the property's rent.
Sometimes. Leasehold eligibility depends on the remaining lease term and lease rent, and some programs exclude it. Fee simple properties are simpler to finance.
Only a small amount on most programs, and the allowance varies by program. If you want to pull equity out, a cash-out refinance up to 75% LTV is the better fit.
Only if the property is legally permitted for short-term use. Most of Oahu outside resort areas requires long minimum stays, so many investment properties qualify on long-term leases.
Often, yes, but seasoning rules vary by program. Some use the new appraised value; others cap the loan near your cost basis if you bought recently.
Yes, if the unit is permitted and leased. Unpermitted units are often excluded from rent and value.
Standard programs require a minimum of 1.0x, meaning rent covers the full payment. Sub-1.0 programs exist for properties that fall short, with tighter terms.
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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