The Rio Grande Valley is fourplex country. Investors in McAllen, Edinburg and Pharr build or buy newer four-unit buildings and single-family rentals, often on short-term construction or bridge money. A rate-and-term DSCR refinance turns that into a long-term payment based on the combined rent.
In short: LendingStreet can replace the hard money, bridge or bank loan on a McAllen rental with a DSCR rate-and-term refinance that is underwritten on the property's rent, not W-2s or tax returns. The minimum loan is $150,000, rate-and-term leverage runs up to 80% LTV on some programs (varies by program on 5-8 units), and the standard floor is a 1.0x DSCR with 620 credit. In McAllen, many refinances are newer fourplexes and duplexes in Hidalgo County that need a long-term loan after construction or a bridge, and the combined rent of all units drives the ratio.
Hidalgo County has grown fast, with demand from cross-border trade, healthcare, the University of Texas Rio Grande Valley in Edinburg and the school districts. Many of the region's rentals are newer fourplexes on single lots, which fit DSCR well because the rent from four units is pooled.
Builders and investors commonly finish a fourplex with a construction or bridge loan and then refinance once all four units are leased. Others hold older duplexes on local bank notes with balloons that come due every few years.
Rentals across the McAllen metro differ more by age and unit count than by neighborhood name.
| Area | Typical rental stock | Common refinance situation |
|---|---|---|
| North McAllen and Sharyland | Newer single-family homes, some HOA | Replacing a bank note on a newer rental |
| Edinburg near UTRGV | Fourplexes and duplexes leased to students and staff | Refinancing after construction once units lease |
| Pharr, San Juan and Alamo | Fourplexes and modest single-family homes | Paying off a bridge or balloon |
| Mission and Weslaco | Mix of older homes and newer infill | Rate-and-term on a renovated rental |
Rate-and-term is for replacing debt, not extracting it. The new loan pays off what you owe plus closing costs. Because no equity is being pulled, some programs allow up to 80% LTV, while cash-out tops out at 75% LTV. On 5-8 unit buildings and larger balances, the maximum can be lower and varies by program.
It fits McAllen investors who want to get out of a short-term loan, fix a payment that is about to adjust, or clean up how title is held.
This example is illustrative and not a quote. A newer fourplex in Edinburg was finished with a bridge loan and is now fully leased, with each two-bedroom unit renting for $925 a month. It appraises at $560,000 and rents for $3,900 a month. The bridge loan balance is $365,000, with an interest-only payment of about $3,498 a month.
A rate-and-term DSCR refinance of $375,500 covers the payoff plus about $10,500 in estimated closing costs, roughly 67% LTV. Estimated principal and interest on a 30-year fixed loan is about $2,530. With taxes of $975 and insurance of $260, the monthly payment is about $3,765, for a DSCR of about 1.04x.
The new payment is about $968 a month lower than under the bridge loan, and it is fixed for 30 years instead of coming due. The ratio clears the 1.0x standard minimum.
| Item | Before (bridge loan) | After (DSCR refinance) |
|---|---|---|
| Loan balance | $365,000 | $375,500 |
| Monthly loan payment | $3,498 (interest-only) | $2,530 (est. principal and interest) |
| Property taxes | $975 | $975 |
| Insurance | $260 | $260 |
| Total monthly payment | $4,733 | $3,765 |
| DSCR at $3,900 rent | About 0.82x | About 1.04x |
| Loan term | Short term, comes due | 30-year fixed |
Your new loan size depends on the appraised value, and your ratio depends on the rent the appraiser supports. Lenders generally use the lower of the lease or market rent on many programs, so leases well above market may not count in full. In the Valley, appraisers use the 2-4 unit report form for fourplexes, comparing leases and sales of similar new fourplexes in Edinburg, Pharr and McAllen.
Like the rest of Texas, the Valley relies on property taxes. A rental can be taxed by Hidalgo County, the city, the school district, South Texas College, a drainage district and sometimes an irrigation district. The combined rate is high, and investors do not get homestead exemptions.
Newer fourplexes may only have a land value or a partial-year bill on file. If so, budget taxes on the full appraised value at the full combined rate. The Hidalgo County Appraisal District record lists each taxing unit.
The Valley sees tropical storms and heavy rain, and flat terrain means drainage matters. Some subdivisions sit in mapped flood zones, where flood insurance is generally required. Wind coverage and deductibles also vary. Get both quotes before you size the refinance.
Fourplexes in McAllen, Edinburg and Pharr are often built on single lots in subdivisions platted for them. For a refinance, the appraiser looks for comparable fourplex rents and sales, which the Valley usually has. Make sure the certificate of occupancy is issued for all four units.
Texas has no rent control, and leases in the Valley are typically 12 months. If one unit is vacant at refinance, some programs use market rent for it; others want all units leased.
The cleanest refinances begin with a signed lease and 45 to 60 days of runway before the short-term loan matures. Seasoning requirements differ by program, so ask early whether the new loan can use the current appraised value. In the Valley, that usually means a new fourplex that leased up within a few months of completion.
Get a quote through the form below or call (877) 298-1001. We finance business-purpose loans on 1-8 unit rentals across Hidalgo County, including McAllen, Edinburg, Mission, Pharr and Weslaco, and we will run your numbers at a few loan sizes so you can compare. A quick pass through our DSCR calculator with real taxes, insurance and any dues will show where the ratio lands before the appraisal.
Yes. Fourplexes are 1-8 unit residential property, and the loan qualifies on the combined rent of all four units.
Some programs use market rent from the appraisal for a vacant unit; others want every unit leased. Tell us at the start so we can match the program.
Budget the full appraised value at the full combined rate, including any drainage district. The first full bill will reflect the finished building.
Yes. We look at rentals across Hidalgo County as long as the loan is $150,000 or more.
No. DSCR loans qualify on the property's rent compared with the monthly payment, not on personal income.
If you own five or more rentals, a blanket portfolio loan can refinance them under one loan with one closing and one payment.
Rate-and-term reaches up to 80% LTV on some programs, but the maximum on 5-8 unit buildings is often lower and varies by program.
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