Worcester, Springfield, Lowell and the Boston area are full of triple-deckers and two-families that investors buy and renovate with short-term money. A DSCR rate-and-term refinance replaces it with long-term debt qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Massachusetts, 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 Massachusetts, the state lead law and attorney-led closings are the items to plan for.
A rate-and-term refinance pays off the loan you have now and replaces it with a new one, changing the rate, the term or both, without pulling out equity. The new balance usually covers the payoff plus closing costs, and most programs allow only a small amount of cash back at closing. The exact allowance varies by program.
Because you are not taking cash out, some programs allow a higher ceiling than a cash-out refinance, up to 80% LTV on some programs. Qualification runs on the debt service coverage ratio, the property's rent divided by the new monthly payment including principal, interest, taxes, insurance and any HOA dues. The standard minimum is 1.0x.
Massachusetts rental stock is dominated by early 1900s two- and three-family houses, including triple-deckers in Worcester, Dorchester, Lowell, Lawrence and Fall River. Investors buy with hard money, renovate and refinance. Rate-and-term refinances also help investors exit short-term loans or high-rate debt with a fixed 30-year payment.
In each case the goal is the same: a stable, long-term payment the rent can carry, without raising the balance. Keeping the loan close to the payoff also leaves more room under the ratio if taxes or insurance rise after closing.
Hard money and bridge loans are built to be replaced. Once the rehab is done and the unit is leased, a rate-and-term DSCR refinance pays off the short-term loan and sets a 30-year payment. Start the refinance a couple of months before maturity so appraisal and title do not run up against the deadline.
If you bought recently, expect the lender to look at your purchase price and documented improvements, not just the new appraisal. Seasoning requirements differ by program, and they can change how much of the after-repair value you can use.
Massachusetts charges a deed excise tax on sales, which does not apply to a standard refinance, and there is no mortgage tax. Refinance costs are mostly recording, title, appraisal, attorney and lender charges. Massachusetts closings are handled by attorneys.
If you are moving title into an LLC as part of the refinance, deed excise and recording requirements may apply, so ask the closing attorney first.
Massachusetts has a strict lead law that requires deleading in pre-1978 rental housing where children under six live. Lead compliance letters matter for leases, insurance and liability, so know the status of each unit.
Older triple-deckers often have separate heating systems, and boiler age, oil tanks and who pays heat matter. Property taxes vary by town; Boston and some suburbs have separate rates for residential and commercial property and a residential exemption only for homes owners live in.
This example is illustrative and not a quote. An investor owns a triple-decker in Worcester appraised at $640,000. The existing hard money loan used for the purchase and renovation has a payoff of $470,000, costs about $4,020 a month interest-only and matures in 4 months. Rent is $5,550 a month, and taxes, insurance and any HOA dues run $900 a month.
Rolling about $11,000 of closing costs into the loan gives a new balance of $481,000, or about 75.2% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $3,241, so the full payment is about $4,141 and the DSCR is about 1.34x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $1,409 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $640,000 |
| Existing loan payoff | $470,000 |
| Closing costs rolled in | $11,000 |
| New loan amount | $481,000 |
| Loan-to-value | 75.2% |
| Principal and interest (30 years) | About $3,241 |
| Taxes, insurance and HOA | $900 |
| Total monthly payment | About $4,141 |
| Monthly rent | $5,550 |
| DSCR | About 1.34x |
If you need equity out of the property, a cash-out refinance is the tool. If you only need to retire the existing loan, rate-and-term usually offers more leverage room and a lower balance.
The underwriting is the same, but the outcome is not. A larger cash-out balance raises the payment and lowers the ratio, so ask for both options on the same property and compare the payment, the DSCR and the cash you would net side by side.
| 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 |
Worcester has a deep supply of triple-deckers and strong rental demand. Springfield, Lowell, Lawrence, Brockton and Fall River offer lower prices. Boston neighborhoods such as Dorchester, Roxbury and East Boston carry higher values and tighter ratios. Small 5-8 unit buildings are common in older cities and may see lower maximum LTV.
Having these ready keeps the appraisal, title and underwriting moving, especially if a short-term loan is nearing maturity. 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 Massachusetts, from $150,000 with no stated maximum, qualified on the property's rent.
No. The deed excise applies to sales and deed transfers. A standard refinance mostly involves recording, title, attorney and lender costs.
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.
Pre-1978 rentals where children under six live must be deleaded. Compliance letters help with leases, insurance and underwriting.
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.
Yes. Three-family buildings are standard residential DSCR collateral, and rent from all three units counts.
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. LLC borrowers are standard on DSCR loans. Expect to provide the operating agreement, articles of organization and an EIN letter, and to sign for the loan personally.
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