A short-term loan is the right tool to buy and fix a Maui rental. It is the wrong tool to hold one. Once the property is leased, a rate-and-term DSCR refinance replaces the bridge or hard money note with a long-term loan sized on the rent.
In short: LendingStreet's DSCR rate-and-term refinance pays off an existing loan on a 1-8 unit Maui rental, such as a bridge, hard money or maturing balloon note, without taking cash out. It qualifies on the property's rent, goes up to 80% LTV on some programs, offers 30-year terms and has a 620 minimum credit score. On Maui, the goal is usually a predictable payment that a year-round lease covers comfortably.
The most common Central Maui case is an investor who bought a dated Kahului or Wailuku home with a short-term loan, renovated it and leased it. The bridge or hard money loan is interest-only and due soon. A DSCR refinance replaces it with an amortizing loan.
Other cases include a balloon note coming due, a seller-financed purchase with a payoff date, or an existing loan in a personal name that the owner wants to move into an LLC.
Rate-and-term loans go up to 80% LTV on some programs, covering the payoff plus normal closing costs. The new payment, including taxes, insurance and any AOAO dues, must clear the program's DSCR minimum, usually 1.0x.
Because no cash comes out, seasoning rules are often lighter than on a cash-out refinance, but they still vary by program.
Request the payoff statement early so the new loan is sized on the exact figure, including any per-diem interest.
This example is illustrative and not a quote. An investor bought and renovated a Wailuku home with a legal ohana using a $760,000 bridge loan. The estimated interest-only payment on the bridge is about $6,650 a month, and the loan matures in a few months. The home now appraises at $1,050,000 and the two units lease for $6,250 combined.
A rate-and-term DSCR refinance of $770,000 pays off the bridge and covers closing costs, about 73% LTV. Estimated principal and interest on a 30-year term is about $5,253, plus $330 taxes and $390 insurance, for a total of about $5,973. DSCR is about 1.05x, and the monthly loan payment drops by about $1,397 compared with the bridge.
| Item | Bridge loan today | DSCR refinance |
|---|---|---|
| Loan balance | $760,000 | $770,000 |
| Monthly loan payment | $6,650 (interest-only) | $5,253 (amortizing) |
| Term | Short, maturing soon | 30 years |
| DSCR at $6,250 rent | n/a | 1.05x |
Start the refinance well before your bridge maturity date. Appraisal scheduling on Maui can take longer than on the mainland, and title and escrow need time too. Have signed 12-month leases in place on every unit; long-term leases are what most Maui refinances are underwritten on.
If a unit is still vacant, a market rent estimate from the appraiser may be used on some programs, but a signed lease is stronger.
Appraisers on Maui see a lot of older homes with undocumented work. If your renovation included permitted electrical, plumbing or a legalized ohana, bring the permits and final inspection records. Value and rent credit for the second unit can depend on them.
A before-and-after scope with receipts also helps support the new value against older comparable sales in the neighborhood.
Budget property taxes on the Maui County class you will qualify for. A home leased year-round may qualify for the long-term rental class, which is generally lower than the non-owner-occupied class. Confirm with the county before you rely on it.
Insurance renewals have risen across Maui since 2023. Use a current quote, not last year's premium, so the ratio holds up at closing.
If the rent does not quite cover the new payment at 1.0x, options include a smaller loan with more cash in, a sub-1.0 DSCR program for some borrowers, or extending the bridge long enough to lease the remaining unit. We will show you the numbers at each option.
If your appraisal comes in high, it can be tempting to pull cash at the same time. A rate-and-term refinance keeps the loan at your payoff plus costs, which usually means a smaller payment, a higher ratio and, on some programs, lighter seasoning rules. A cash-out refinance can go up to 75% LTV but adds to the payment and may require longer ownership.
For many Central Maui investors coming off a bridge loan, the cleanest path is a rate-and-term refinance first, then a cash-out later once the property has more seasoning and rent history. Compare both options on our Kahului cash-out page.
Another reason to choose rate-and-term is an LLC transfer or a change of title. If a property was bought in a personal name with a short-term loan, refinancing it into an LLC with a long-term DSCR loan can tidy up ownership and the debt in one closing.
Whichever you choose, ask for the payoff letter from your current lender early, including any extension fees or default interest that would apply if the maturity date passes. Knowing the exact payoff keeps the new loan sized correctly and avoids a last-minute shortfall at closing.
If the bridge lender offers a short extension, get the terms in writing before you rely on it.
Keep your contractor's final invoices and lien releases handy as well, since title may ask for them before closing.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, payoff balance, maturity date and rents through the form below or call (877) 298-1001. Our Hawaii rate-and-term page has statewide details.
Yes. A rate-and-term DSCR refinance can pay off hard money or bridge financing once the property is leased and meets program requirements.
Up to 80% LTV on some programs, covering the payoff and normal closing costs.
No. The loan qualifies on the property's rent, credit and reserves.
Several weeks at least. Maui appraisals, title and insurance can all take longer than expected.
Some programs may use a market rent estimate, but a signed lease is stronger.
You can bring in more cash, look at a sub-1.0 DSCR program or finish leasing first.
Yes. LLC borrowers are standard on DSCR loans.
It depends on the ratio and seasoning. Rate-and-term usually keeps the payment lower; cash-out can come later once the property seasons.
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