Louisville has one of the most varied rental stocks in the region, from shotgun houses in Germantown to Victorian mansions in Old Louisville. A DSCR rate-and-term refinance replaces short-term money on a leased Louisville rental with long-term financing based on the rent.
In short: A DSCR rate-and-term refinance from LendingStreet pays off the existing loan on a leased Louisville rental and sets a long-term payment sized on the rent. Expect a $150,000 minimum loan, up to 80% LTV on some programs, a 1.0x standard minimum DSCR and a 620 credit floor, with no W-2s or tax returns. Louisville investors buy shotguns and doubles in Germantown, Schnitzelburg and the South End, renovate with short-term money, register them with Louisville Metro, and refinance.
Louisville investors buy shotguns and doubles in Germantown, Schnitzelburg and the South End, renovate with short-term money, register them with Louisville Metro, and refinance. Others refinance existing loans on suburban rentals. A rate-and-term refinance pays off the short-term debt without pulling cash. Louisville's prices are moderate for a city its size, and rent growth in the Highlands, Germantown and the South End has outpaced many Midwest peers. A $150,000 minimum loan usually means a renovated double, a house in a stronger neighborhood, a suburban rental, or several smaller homes refinanced together. Many investors also refinance once a long-term tenant has been in place for a year.
The goal is not cash. It is replacing interest-only, short-term debt with a 30-year amortizing loan available on most programs, so the property carries itself and the next maturity date disappears.
Investors buy in the Highlands, Germantown, Schnitzelburg, Crescent Hill, Clifton, Old Louisville, Beechmont, Shively, Okolona and Fern Creek, plus St. Matthews, Jeffersontown and Southern Indiana suburbs across the river.
The stock includes shotgun and camelback houses, brick doubles, Victorian homes in Old Louisville, and post-war ranch homes in the suburbs. Older homes need electrical, plumbing and foundation work.
Louisville appraisals for doubles and shotguns compare with similar homes nearby, and renovation quality matters. In the Highlands and Crescent Hill, values are higher and comps plentiful. Rent comparables are strong near the University of Louisville, the hospitals downtown and the Highlands. The appraiser will check both units of a double and the condition of older systems. Keep your rental registration and renovation records ready. Southern Indiana rentals across the river follow Indiana tax rules.
The two refinances look similar on paper but solve different problems. Rate-and-term ends the existing debt; cash-out turns equity into money for the next property.
Seasoning rules decide how soon after purchase you can refinance and whether the new loan is based on the appraised value or your cost basis. They vary by program, so confirm them before you order the appraisal.
| Item | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing debt and closing costs | Pull equity out as cash |
| Max LTV | Up to 80% on some programs | Up to 75% |
| Cash to you | Little or none | Equity above the payoff |
| Seasoning | Varies by program | Varies by program; often longer |
| Best fit | Ending hard money or bridge debt | Funding the next purchase |
This example is illustrative and not a quote. An investor owns a renovated double shotgun in Germantown, appraised at $278,000, with a $200,000 balance on a short-term loan. Rent is $2,150 a month across two units. The new loan pays off the existing balance and rolls in about $5,200 of closing costs, for a loan of $205,200, or about 74% of value.
On 30-year amortization, estimated principal and interest is about $1,400 a month. Adding taxes of about $290 and insurance of about $150 brings the total to about $1,840, so the DSCR is about 1.17x against the 1.0x standard minimum. Both sides leased at market rent produces a solid ratio. A vacancy at closing could lower it.
| Item | Amount |
|---|---|
| Appraised value | $278,000 |
| Existing loan payoff | $200,000 |
| Closing costs rolled in | $5,200 |
| New loan amount | $205,200 (about 74% LTV) |
| Estimated principal and interest | $1,400 |
| Taxes, insurance and HOA | $440 |
| Total monthly payment | $1,840 |
| Monthly rent | $2,150 |
| DSCR | About 1.17x |
Kentucky property is assessed at full value by the county property valuation administrator. Jefferson County reassesses periodically, and bills combine state, metro and school district rates.
Kentucky's deed transfer tax applies to sales, not refinances. Refinance costs include title, recording, appraisal and lender fees.
Louisville sees severe storms and occasional tornadoes, and some areas near the Ohio River are in flood zones. Sewer backup coverage is worth adding on older homes.
Louisville Metro requires rental property to be registered. Non-host-occupied short-term rentals in many residential zones need a conditional use permit. Check the rules before relying on short-term income. Louisville Metro's rental registration is tied to the property owner and address, and an out-of-date registration can delay a refinance. Update it before you apply. Older homes in Germantown and the Highlands may sit in historic preservation districts, which affect exterior repairs such as windows, siding and porches.
Our investor loans are business-purpose loans on non-owner-occupied property. Expect a credit check, an appraisal with a rent schedule, and a title review.
Order the payoff letter early and ask your current lender about any per-diem interest and release fees. Delays there are the most common reason a refinance closing slips.
Get a quote with the form below or call (877) 298-1001. We review the payoff, the rent and the costs, then confirm loan size and timing. See our Kentucky rate-and-term refinance page for statewide details.
Most refinances close in a few weeks once the appraisal and title are in. If your short-term loan matures soon, tell us the date up front so we can plan around it.
Yes, Louisville Metro requires rental registration.
Non-host-occupied STRs in many residential zones need a conditional use permit. Most investors qualify on long-term leases.
Yes. We refinance 1-8 unit rentals in New Albany, Jeffersonville and Clarksville too.
Yes, if the units are legal. Up to 8 units counts as residential for our programs, and the DSCR uses the combined rent.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Yes. LLC borrowers are standard, and you sign for the loan personally.
Seasoning rules vary by program. Some allow a refinance soon after purchase if the property is leased.
Up to 80% LTV on some programs, with loans from $150,000 and no stated maximum. The rent must cover the payment at the program minimum, usually 1.0x.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.