The typical KCK rate-and-term refinance starts with a house that was bought with short-term money, fixed up and leased. Now the hard money clock is ticking, and the goal is simple: swap an interest-only balloon for a long-term payment the rent can carry.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit rentals in Kansas City, Kansas to pay off hard money, bridge loans or existing mortgages, qualified on the property's rent instead of personal income. Rate-and-term goes up to 80% LTV on some programs, the standard minimum DSCR is 1.0x and the minimum credit score is 620. 30-year terms are available and LLC borrowers are standard.
Most KCK rate-and-term files fall into three groups. Investors finishing a buy, rehab, rent strategy in Turner, Argentine or Rosedale need to retire the rehab loan. Owners with a bridge loan used to grab an off-market package need permanent financing. And longtime landlords with a local bank loan that is about to reset or balloon want a fixed long-term payment.
In each case the goal is not cash. It is to pay off the current debt, cover closing costs and land on a payment that fits the rent.
A rate-and-term refinance limits the new loan to the payoff plus closing costs, with only a small amount of cash back if any. Because no equity is being pulled out, leverage limits are generally more generous than on a cash-out, up to 80% LTV on some programs versus 75% for cash-out. If you want equity out, see our KCK cash-out page.
This example is illustrative and not a quote. An investor bought and renovated a Turner ranch with a hard money loan that now has a balance of $168,000. The home appraises at $245,000 and is leased for $1,850 a month. Taxes are about $300 a month and insurance about $125.
Today the interest-only hard money payment is about $1,540, or about $1,965 with taxes and insurance, and the full balance is due soon. A DSCR loan of $172,000, about 70% of value, pays off the hard money and about $4,000 in costs. Estimated principal and interest on a 30-year term is about $1,173, the total payment about $1,598 and the DSCR about 1.16x.
| Item | Current hard money | DSCR refinance |
|---|---|---|
| Loan balance | $168,000 | $172,000 |
| Payment type | Interest only, balloon due | 30-year amortizing |
| Monthly principal and interest | $1,540 | $1,173 |
| Taxes and insurance | $425 | $425 |
| Total monthly payment | $1,965 | $1,598 |
| DSCR at $1,850 rent | 0.94x | 1.16x |
Start the refinance well before the short-term loan matures. A KCK appraisal can take time to schedule, and if the appraiser struggles to find comparable sales in a non-disclosure state, you want room to respond. Have the lease signed and the tenant in place; a vacant property can qualify on market rent on some programs, but a signed lease is stronger.
Programs differ on how soon after purchase they will use the new appraised value. If you bought recently, document the purchase price, rehab costs and completion photos.
A few steps help a refinance go smoothly in Kansas City, Kansas:
Some KCK landlords financed with a local bank on a short commercial note with a rate reset every few years. A DSCR rate-and-term refinance can replace that with a 30-year term, which may lower the monthly payment and removes the reset risk. Because the loan qualifies on rent, you do not need to provide business tax returns or personal income documents the bank may have required.
Wyandotte County reassesses values each year and uses an assessment ratio of 11.5% on residential property. A freshly renovated house often sees its appraised value jump, so budget the tax line on the after-rehab value. That keeps the DSCR estimate honest. If the new appraised value comes in high, assume the county's value will move in the same direction over the next cycle and leave room in the ratio for it.
Most delayed refinances in Kansas City, Kansas trace back to a short list of issues, and almost all of them can be handled before the appraisal is ordered.
Open permits are the first. If the rehab included electrical, plumbing or structural work, close out the permits with the Unified Government and keep the final inspection records. An appraiser or title examiner who finds open permits can slow the file. The second is a value that comes in low because comps are thin, which is common in a non-disclosure state; prepare your own list of renovated MLS sales on similar blocks.
The third is the rent. If the tenant moved in at a below-market rent to fill the house quickly, the ratio may be tighter than you hoped. A full-market lease, signed before you apply, makes the DSCR math easier. Finally, check flood status on homes near the Kansas River, since a required flood policy adds to the payment.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, current loan balance and maturity date, value estimate and lease through the form below. For properties elsewhere in Kansas, see our Kansas rate-and-term page.
Yes. That is one of the most common uses. The new loan pays off the hard money and qualifies on the rent.
Up to 80% LTV on some programs. Larger balances and 5-8 unit buildings can be lower and vary by program.
A signed lease is best. Some programs can use market rent from the appraisal on a vacant property.
It varies by program, especially regarding whether the new appraised value or your cost basis is used.
Often, because an amortizing 30-year term can cost less per month than an interest-only short-term loan. It depends on the loan amount and terms.
Yes. We combine the rents of all units to calculate the DSCR.
The minimum is 620. Higher scores can improve terms.
Usually yes. A rate-and-term loan can cover the payoff of the existing debt plus normal closing costs, within the program's LTV limit and as long as the rent still covers the payment at the required DSCR. If the value is tight, you may need to bring some cash to closing instead.
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