Louisville, Lexington and Northern Kentucky offer moderate prices and steady tenants, and many investors there start with hard money. 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 Kentucky, 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 Kentucky, older housing condition and local rental registration in the bigger cities are the items to check early.
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.
Kentucky rental stock includes Louisville shotgun houses and camelbacks, brick doubles and older single-family homes, plus newer suburban homes around Lexington and Bowling Green. Investors buy with hard money, renovate and refinance. Northern Kentucky cities such as Covington and Newport draw investors tied to the Cincinnati job market.
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.
Kentucky charges a small real property transfer tax on deeds, which does not apply to a standard refinance, and there is no mortgage tax. Costs are mostly recording, title, appraisal, attorney and lender charges. Attorneys are commonly involved in Kentucky closings.
If you move title into an LLC at the same time, transfer tax and recording requirements may apply, so check with your closing attorney first.
Kentucky property taxes are moderate, and rentals do not get the homestead exemption. Use the current bill for the property in the ratio.
Much of the investor stock in Louisville and Covington is 100 years old or more, and roofs, foundations, wiring and plumbing affect both insurance quotes and the appraisal. Louisville and some other cities have rental registration programs, and some areas along the Ohio River sit in flood zones.
This example is illustrative and not a quote. An investor owns a shotgun double in Louisville appraised at $270,000. The existing hard money loan used for the purchase and renovation has a payoff of $195,000, costs about $1,750 a month interest-only and matures in 3 months. Rent is $2,200 a month, and taxes, insurance and any HOA dues run $350 a month.
Rolling about $6,500 of closing costs into the loan gives a new balance of $201,500, or about 74.6% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $1,375, so the full payment is about $1,725 and the DSCR is about 1.28x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $475 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $270,000 |
| Existing loan payoff | $195,000 |
| Closing costs rolled in | $6,500 |
| New loan amount | $201,500 |
| Loan-to-value | 74.6% |
| Principal and interest (30 years) | About $1,375 |
| Taxes, insurance and HOA | $350 |
| Total monthly payment | About $1,725 |
| Monthly rent | $2,200 |
| DSCR | About 1.28x |
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 Kentucky 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 |
Louisville neighborhoods such as Germantown, Schnitzelburg, Shelby Park, the South End and Portland have many shotgun houses and doubles. Lexington draws university and medical demand. Bowling Green, Elizabethtown near Fort Knox and Clarksville-area rentals near Fort Campbell add military-related tenants. Covington and Newport offer older multifamily near Cincinnati.
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 Kentucky, from $150,000 with no stated maximum, qualified on the property's rent.
Kentucky's transfer tax applies to deeds, so a standard refinance usually avoids it. Moving title into an LLC can change that.
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.
Yes. Doubles are standard two-unit residential properties, and the rent from both sides counts toward the ratio.
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.
No. The refinance qualifies on the property's rent, with a 620 minimum credit score and reserves.
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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