In Lubbock, a lot of rentals were bought with short-term money: student duplexes near Texas Tech, older brick homes off 34th Street, new builds in the south-side subdivisions. A rate-and-term DSCR refinance is how those loans get replaced with a long-term payment the rent can carry.
In short: LendingStreet refinances 1-8 unit rentals in the Lubbock area with DSCR rate-and-term loans that pay off hard money, a bridge loan or an existing mortgage and qualify on the property's rent, with no W-2s or tax returns. Loans start at $150,000, rate-and-term goes up to 80% LTV on some programs, and the standard minimum DSCR is 1.0x with a 620 minimum credit score. In Lubbock, most refinances involve student-area duplexes and single-family homes, and the property tax bill without a homestead exemption is usually the line that decides the ratio.
Lubbock rentals tend to cost less than rentals in Dallas or Austin, so many investors buy with cash or a short-term rehab loan, then refinance once the house is leased. Others bought in the last few years with a local bank note that has a three- or five-year balloon, and now want a 30-year fixed payment instead of a renewal at whatever terms the bank offers.
The tenant base is broad: Texas Tech students and staff, Covenant and UMC hospital workers, and families who rent in the newer subdivisions south of Loop 289. A property with a signed 12-month lease, or a lease that renews each August, gives the appraiser clear rent to work from.
Where a Lubbock rental sits shapes the rent, the tenant and the questions an appraiser asks.
| Area | Typical rental stock | Common refinance situation |
|---|---|---|
| Tech Terrace, Overton and areas near campus | Brick bungalows, duplexes, small fourplexes | Paying off a rehab loan after a student-lease turnover |
| Heart of Lubbock and central neighborhoods | 1950s and 1960s single-family homes | Refinancing a bank balloon or cash purchase |
| South Lubbock and Wolfforth | Newer single-family homes, some HOA | Replacing a short-term note on a newer rental |
| East and North Lubbock | Older frame homes at lower prices | Small balances; confirm the $150,000 minimum fits |
A rate-and-term refinance pays off the existing loan and closing costs and changes the rate, term or structure, without taking meaningful cash out. Because it adds no new equity draw, leverage can reach up to 80% LTV on some programs, versus up to 75% on a cash-out. If you need cash for the next deal, see our Texas cash-out page instead.
Common reasons to choose rate-and-term:
This example is illustrative and not a quote. A three-bedroom brick home near Tech Terrace was bought and renovated with a hard money loan, then leased to Texas Tech graduate students. It appraises at $255,000 and rents for $1,950 a month. The hard money loan balance is $170,000, with an interest-only payment of about $1,629 a month.
A rate-and-term DSCR refinance of $176,500 covers the payoff plus about $6,500 in estimated closing costs, roughly 69% LTV. Estimated principal and interest on a 30-year fixed loan is about $1,189. With taxes of $450 and insurance of $190, the monthly payment is about $1,829, for a DSCR of about 1.07x.
The new payment is about $440 a month lower than under the hard money loan, and it is fixed for 30 years instead of coming due. The ratio clears the 1.0x standard minimum.
| Item | Before (hard money loan) | After (DSCR refinance) |
|---|---|---|
| Loan balance | $170,000 | $176,500 |
| Monthly loan payment | $1,629 (interest-only) | $1,189 (est. principal and interest) |
| Property taxes | $450 | $450 |
| Insurance | $190 | $190 |
| Total monthly payment | $2,269 | $1,829 |
| DSCR at $1,950 rent | About 0.86x | About 1.07x |
| Loan term | Short term, comes due | 30-year fixed |
For a rate-and-term refinance, the appraisal sets both the value used for LTV and the market rent used for DSCR. Single-family homes get a rent schedule with the appraisal, and 2-4 unit properties are appraised on a small residential income form. Near Texas Tech, appraisers can usually find duplex and single-family leases to compare, but rents on homes leased by the bedroom are judged against whole-home market rent.
Texas has no state income tax, so local property taxes carry much of the load. A Lubbock rental can be taxed by the county, the city, Lubbock ISD or Frenship ISD or Lubbock-Cooper ISD, the hospital district and the water district, and the combined rate adds up.
Investors do not get homestead exemptions. If you bought from an owner-occupant, the first full-year bill after purchase can be far higher than the seller's. Pull the Lubbock Central Appraisal District record and budget on the full rate before you size the new loan.
The South Plains gets hail and high wind every spring. Many policies carry a separate percentage deductible for wind and hail, and an older roof can raise the premium or limit coverage. Get a current quote before the refinance and use it in the ratio, not last year's renewal figure.
Lubbock zoning limits how many unrelated people can live in a single-family home in some districts, which matters for by-the-bedroom student leases. Confirm the zoning and the occupancy count before you rely on room-by-room rent.
For the refinance, lenders generally use the lease rent or market rent from the appraisal, whichever the program allows. Student leases that run August to July work well when they are signed and current.
Start the refinance 45 to 60 days before your short-term loan matures. Seasoning rules, meaning how long you must own the property before the new loan can use the appraised value, vary by program. In Lubbock this often means a duplex that was renovated over the summer, leased by August and refinanced in the fall.
Send the address, payoff letter, lease and target loan amount through the form below or call (877) 298-1001. The financing team will run the ratio at a few loan amounts and come back with options, including sub-1.0 DSCR programs where they fit. We look at rentals across Lubbock County and nearby Wolfforth, Shallowater and Slaton. If you want to test the numbers first, our DSCR calculator works best with the real tax bill and a current insurance quote rather than estimates.
Yes, if the property is a 1-8 unit residential rental with a lease the appraiser can support. Make sure the number of tenants fits Lubbock zoning for that lot before relying on by-the-bedroom rent.
Most likely the seller had a homestead exemption. Investors do not get it, so the bill resets to the full appraised value at the full combined rate.
It shows up in insurance. An older roof with storm history can raise the premium or deductible, which raises the monthly payment used in DSCR.
Yes. We look at rentals across the Lubbock area, including Wolfforth, Shallowater and Slaton, as long as the loan is $150,000 or more.
A rate-and-term refinance pays off existing debt and closing costs with little or no cash back, and some programs allow up to 80% LTV. A cash-out refinance lets you pull equity, up to 75% LTV.
Some programs accept a DSCR below 1.0x. A smaller loan or a lower insurance quote can also raise the ratio.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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