Indianapolis, Fort Wayne and the rest of Indiana have long drawn investors looking for workable rent-to-price ratios. Many of those deals start with hard money, and a DSCR rate-and-term refinance replaces it with a long-term loan qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Indiana, 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 Indiana, the property tax cap for rentals and local rental registration rules are the items to know.
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.
Indiana rental stock is heavy on 1950s and 1960s single-family homes, older frame houses near downtown cores and doubles in Indianapolis and Fort Wayne. Prices are moderate, which makes buy-rehab-refinance common. Rate-and-term refinances help investors exit hard money or swap a short-term bank loan for a fixed 30-year payment.
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.
Indiana has no real estate transfer tax and no mortgage recording tax. Costs on a refinance are mostly recording fees, title, appraisal and lender charges. A sales disclosure form applies to sales but not a typical refinance.
If you are moving title into an LLC as part of the refinance, recording is usually simple, but confirm the deed and any disclosure requirements with the title company.
Indiana caps property tax bills as a percentage of assessed value, with a higher cap for rentals and other non-homestead residential property than for homes owners live in. The cap helps keep taxes predictable, but the rental bill is higher than a homestead bill, so use the actual figure.
Indianapolis requires landlords to register rental properties, and other cities have their own registration or inspection programs. Older homes may raise insurance questions around roofs, electrical and plumbing.
This example is illustrative and not a quote. An investor owns a three-bedroom single-family rental in Indianapolis appraised at $230,000. The existing hard money loan from the purchase and rehab has a payoff of $165,000, costs about $1,480 a month interest-only and matures in 3 months. Rent is $1,750 a month, and taxes, insurance and any HOA dues run $360 a month.
Rolling about $6,000 of closing costs into the loan gives a new balance of $171,000, or about 74.3% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $1,181, so the full payment is about $1,541 and the DSCR is about 1.14x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $209 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $230,000 |
| Existing loan payoff | $165,000 |
| Closing costs rolled in | $6,000 |
| New loan amount | $171,000 |
| Loan-to-value | 74.3% |
| Principal and interest (30 years) | About $1,181 |
| Taxes, insurance and HOA | $360 |
| Total monthly payment | About $1,541 |
| Monthly rent | $1,750 |
| DSCR | About 1.14x |
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 Indiana 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 |
Indianapolis and its suburbs, including Lawrence, Beech Grove and the far east and west sides, hold most of the state's rental stock. Fort Wayne and Evansville offer lower prices and steady tenants. South Bend, Bloomington and Lafayette have university-driven demand, and Gary and Hammond near Chicago offer very low prices but more variable condition.
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 refinances non-owner-occupied 1-8 unit rentals in Indiana with DSCR loans starting at $150,000, up to 80% LTV on some programs.
No. Indiana has no real estate transfer tax or mortgage tax. Costs are mainly recording, title, appraisal and lender charges.
Most programs allow a small amount of cash back at closing, but the limit varies. Taking more turns the loan into a cash-out refinance, which has a 75% LTV ceiling.
Rentals fall under a higher cap than homes owners live in, so taxes are higher, but the cap keeps the bill within a set share of assessed value.
Seasoning varies by program. Recently purchased properties may be sized on purchase price plus documented improvements rather than the new appraised value.
Yes. Doubles and other two- to four-unit properties are standard residential DSCR collateral, and the loan must be at least $150,000.
Standard programs need at least 1.0x. Sub-1.0 DSCR programs exist, or you can lower the balance by bringing cash to closing.
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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