A rate-and-term refinance is the quiet step after the hard part. The rehab is done, the tenant is in, and the short-term loan or balloon note that got you here needs to be replaced with long-term debt the rent can carry.
In short: LendingStreet offers DSCR rate-and-term refinancing on 1-8 unit rentals in Las Cruces and Doña Ana County, qualified on the property's rent instead of your personal income. Rate-and-term goes up to 80% LTV on some programs, the standard minimum DSCR is 1.0x and loans start at $150,000. It is used to pay off hard money, bridge loans, maturing notes or an existing loan with worse terms.
Rate-and-term means the new loan pays off existing debt and closing costs, without meaningful cash back. In Las Cruces, the debt being replaced is usually one of these.
| Existing debt | Why it gets replaced | What to have ready |
|---|---|---|
| Hard money or fix and flip loan | Short term and interest-only, often at a higher cost | Payoff letter, completed scope, new lease |
| Bridge loan | Built to be temporary | Payoff letter, rent roll |
| Seller-financed real estate contract | Balloon payment coming due | Contract, escrow history, payoff figure |
| Older loan with a balloon or adjustable terms | Payment uncertainty | Current statement, note terms |
| Loan in your personal name | Moving to an LLC borrower | Entity documents, title plan |
Seller financing has a long history in New Mexico, often through real estate contracts with an escrow agent collecting payments. Many of those contracts are written with a balloon after a few years. A DSCR rate-and-term refinance can pay the balloon and replace it with a 30-year loan sized to the rent.
Start early. Title needs to see the contract, any assignments and the escrow account, and confirm how the warranty deed held in escrow will be delivered and recorded when the contract is paid off.
This example is illustrative and not a quote. An investor bought and renovated a three-bedroom home near Picacho Avenue with a short-term rehab loan that now has a $184,000 balance and estimated interest-only payments of about $1,763 a month. The home is leased for $1,795 and appraises at $262,000.
A DSCR rate-and-term loan of $188,500, about 72% LTV, pays off the rehab loan and covers closing costs. Estimated principal and interest is about $1,254. With taxes of $192 and insurance of $100, the payment is about $1,546 and DSCR is about 1.16x. The investor moves from a short-term interest-only loan to a 30-year amortizing one.
| Item | Before | After |
|---|---|---|
| Loan | $184,000 rehab loan | $188,500 DSCR loan |
| Payment type | Interest-only, short-term | Amortizing, 30-year |
| Monthly loan payment | $1,763 | $1,254 |
| Taxes and insurance | Paid separately | $292 |
| DSCR at $1,795 rent | Not applicable | About 1.16x |
The best time to refinance is when the work is complete, permits are closed and a tenant has signed a lease. An appraiser in Las Cruces will compare your home with recently sold updated homes nearby, so finished details matter: a new roof, working refrigerated air and clean exterior stucco all show up in value.
If the appraisal comes in lower than you hoped, the loan may need to be smaller, or you may need to bring a little cash to close. Running the numbers on a conservative value first avoids surprises.
Moving from a rehab loan to a DSCR loan changes more than the payment. Short-term loans are usually interest-only, so none of the payment reduces the balance, and many are paid with taxes and insurance handled separately. A DSCR loan amortizes over 30 years and typically includes an escrow for taxes and insurance, so the monthly figure covers the whole housing cost in one payment.
In the example above, the monthly loan payment falls by several hundred dollars and the loan starts paying down. Just as important, the investor no longer faces a maturity date. That certainty is often the main reason Las Cruces investors refinance: a rehab or bridge loan that comes due during a slow selling season can force a sale at the wrong time.
If you have several properties coming off short-term loans in the same year, consider refinancing them together. Five or more rentals can move into a blanket portfolio loan, which means one closing and one payment instead of a stack of maturities.
If your value has risen well above what you owe, a cash-out refinance up to 75% LTV may make more sense than rate-and-term. Seasoning rules differ between the two and vary by program. See our Las Cruces cash-out page for that version. Many investors who finished a BRRRR-style project choose rate-and-term first to get off the short-term loan quickly, then revisit cash-out later once the property has more history and the value is well supported by nearby sales.
A refinance does not change ownership, so it usually does not reset your Doña Ana County tax valuation. If the property was recently bought, though, the bill may already reflect the new value, so use the current figure from the treasurer. Insurance needs to be in place at closing with the new loan listed, and homes near arroyos may need a flood determination.
Duplexes, triplexes and fourplexes qualify on combined rent. Buildings with 5 to 8 units use the same DSCR approach with maximum LTV that can be lower. A group of five or more rentals can be refinanced together with a blanket portfolio loan.
Send the address, current loan or contract payoff, rent and estimated value through the form below, or call (877) 298-1001. If your short-term loan has a maturity date coming up, include it so the team can plan the timeline backward from that date. For statewide terms, see our New Mexico rate-and-term page.
A refinance that pays off existing debt and closing costs without meaningful cash back, often to get a longer term or a more stable payment.
Yes. Once the property is finished and leased, a DSCR loan can pay off the hard money or fix and flip loan.
Yes, if the property is a 1-8 unit investment property and title can confirm how the contract is released.
Up to 80% LTV on some programs, as long as the rent covers the new payment at the program minimum.
No. The loan qualifies on the property's rent.
Often yes. LLC borrowers are standard. Ask your title company how the deed transfer is handled.
Once the work is complete and the home is leased, though seasoning rules vary by program.
The loan is sized to the appraised value and the rent. If value comes in under your estimate, the loan may be smaller and you may need to bring cash to close, or you can wait for stronger comparable sales.
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