Short-term loans do their job during a rehab or a quick purchase. Once a Huntington rental is finished and leased, keeping it on interest-only money with a looming maturity date is usually the wrong fit for a long-term hold.
In short: LendingStreet refinances 1-8 unit rentals in Huntington and nearby Cabell and Wayne county towns out of hard money, bridge loans and maturing notes into DSCR loans with 30-year terms available, up to 80% LTV on some programs. You qualify on the property's rent, not your income, and the standard minimum DSCR is 1.0x. A rate-and-term refinance pays off your current loan and closing costs without taking extra cash.
These are the situations we see most often.
This example is illustrative and not a quote. An investor bought and renovated a Westmoreland house with a $150,000 short-term loan. Interest-only payments are about $1,219 a month. The house now appraises at $205,000 and rents for $1,525.
A rate-and-term refinance pays off the loan plus about $4,500 in costs, for a new loan of $154,500. Estimated principal and interest on a 30-year term is about $1,080. With taxes of $230 and insurance of $130, the total payment is about $1,440 and DSCR is about 1.06x.
The new loan is about 75% of value, well within the limit for rate-and-term. The key gain is not a lower payment but a permanent one: no maturity date, no extension fee and principal paid down every month.
| Short-term loan | DSCR refinance | |
|---|---|---|
| Balance | $150,000 | $154,500 |
| Payment type | Interest-only | Principal and interest |
| Maturity | Coming due | 30-year term available |
| Monthly loan payment | $1,219 | $1,080 |
Rate-and-term pays off the existing loan and closing costs only. Leverage can go up to 80% LTV on some programs, higher than the 75% cap on cash-out. If you need money for the next purchase, compare both using the same appraisal. A smaller rate-and-term loan also leaves more room on the DSCR.
Closing costs can usually be included in the new loan. That still counts as rate-and-term, because no extra cash comes back to you; the loan simply replaces what you owed plus the cost of refinancing.
Lenders want the work finished and tenants in place. Have leases signed, the property cleaned and any punch-list items done before the appraisal. Some programs consider how long you have owned the property. Start the refinance well before your short-term loan matures to avoid extension fees.
Keep an eye on the calendar. If your current loan matures in the middle of the student leasing season, start early so the appraisal and closing do not collide with move-in week.
Order the appraisal only when the house looks finished. Missing appliances, unpainted trim or an unleased unit can lead to a lower value or a repair condition, which delays the closing and adds to the interest you pay on the short-term loan.
Confirm the property tax figure at the non-owner-occupied class with the Cabell County or Wayne County assessor. Rentals inside Huntington are Class IV, with a higher levy than owner-occupied homes. Get a current insurance quote with flood determination, since parts of the area near the Guyandotte River and local creeks are in mapped flood zones.
Also check whether the property's assessment changed after your renovation. An improved house may be reassessed at a higher value, which raises the tax line. Using the new figure keeps your DSCR estimate accurate.
Many Huntington landlords financed rentals through local banks on short terms with balloons, or through private lenders. When those notes come due, the choice is to renew on new terms or move to a long-term loan. A DSCR loan with a 30-year term removes the renewal cycle and qualifies on the property's rent.
If several properties are on one note, a blanket portfolio loan may be a cleaner replacement.
Single-family homes, 2-4 unit properties and 5-8 unit residential buildings all qualify. Student rentals, hospital-area units and long-term family rentals are all common in Huntington. LLC ownership is standard. Buildings with 9 or more units are commercial.
For student rentals, a full year of lease history can strengthen the file. Keep records of rent collected and any turnover between tenants.
Properties outside the city, in Barboursville, Milton, Kenova or Ceredo, follow the same process, with taxes figured at Class III rather than Class IV.
Once a Huntington rental is on a long-term loan, the pressure of a maturity date is gone. Many investors use that breathing room to plan the next project, whether that is another rehab near Marshall, a small apartment building or a suburban rental.
Keep good records on the refinanced property, including leases, rent collected, repairs and insurance. If you later want to do a cash-out refinance or include it in a blanket loan, that history makes the next file faster.
If you have several properties coming off short-term loans in the same year, tell us. We can look at them together and suggest which to refinance first so your cash flow stays steady.
Send your current loan statement, payoff date, leases, insurance and an estimated value. We will estimate the new loan and DSCR and tell you whether rate-and-term or cash-out is the better fit.
It replaces your existing loan with a new one, paying off the balance and closing costs without extra cash, usually for a longer term or better payment.
Yes. Once the rehab is done and the property is leased, a DSCR loan can pay off the short-term loan. Leases and a finished property are needed first.
Up to 80% LTV on some programs for rate-and-term, compared with 75% for cash-out. Your DSCR must still meet the program minimum.
No. The loan qualifies on the property's rent. Leases and the appraisal confirm the rent.
Several months ahead, so the appraisal, title and insurance can be completed without pressure. Starting early avoids extension fees on the old loan.
Yes. Leases by the bedroom are added together for each unit. A full year of lease history can help.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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