Once a Modesto triplex is leased up or a rehab is finished, the short-term loan that got you there becomes the most expensive part of owning it. A rate-and-term DSCR refinance replaces it with a long-term payment built around the rent.
In short: LendingStreet refinances 1-8 unit rentals in Modesto and across Stanislaus County into DSCR loans that pay off bridge and hard money loans or an existing mortgage, qualified on the property's rent rather than personal income. Rate-and-term refinances go up to 80% LTV on some programs, 30-year terms are available, the standard minimum DSCR is 1.0x and the minimum credit score is 620. The aim is a lower payment, a longer term or both.
The most common reason is paying off short-term financing after a value-add plan: a bridge loan used to buy a partly vacant small multifamily property, or a fix and flip loan on a rehab the investor decided to keep. Others refinance an adjustable or balloon loan into a 30-year term, or move from a loan that required personal income documentation to one that does not.
In Modesto, where many investors buy small multifamily with a value-add plan, the refinance is the moment the plan pays off. Getting the timing, the appraisal and the insurance right determines whether the new loan fully retires the short-term debt.
Rate-and-term covers your payoff and closing costs only. Because no equity comes out, leverage can go up to 80% LTV on some programs, compared with 75% on a cash-out.
This example is illustrative and not a quote. An investor bought a triplex near Modesto Junior College with a bridge loan, renovated two units and leased all three at $1,650 each, for combined rent of $4,950. The bridge balance is $455,000 with an estimated interest-only payment of about $3,792 a month. The property now appraises at $640,000. Taxes, based on the purchase price, are $620 a month and insurance is $240.
A new DSCR loan of $463,000 covers the payoff and about $8,000 in closing costs, about 72% of value. Estimated principal and interest on a 30-year term is about $3,198, for a total payment of about $4,058 and a DSCR of about 1.22x. Compared with the bridge payment of about $4,652 including taxes and insurance, the monthly cost drops by about $594, and the maturity date is gone.
| Item | Bridge loan | New DSCR loan |
|---|---|---|
| Loan balance | $455,000 | $463,000 |
| Monthly principal and interest | $3,792 (interest-only) | $3,198 |
| Taxes and insurance | $860 | $860 |
| Total monthly payment | $4,652 | $4,058 |
| DSCR at $4,950 rent | About 1.06x | About 1.22x |
| Term | Short-term | 30-year term available |
Your property was reassessed when you bought it, and your tax bill reflects that purchase price plus voter-approved bonds and assessments. A refinance is not a change in ownership under Prop 13, so it does not trigger another reassessment. The exception is new construction: if you added square footage or units during the rehab, the county can assess the new construction, and that can raise the bill.
If your renovation added an ADU or converted space, check whether a supplemental assessment for the new construction is pending, and use the higher figure in your numbers.
The appraiser sets value from nearby sales and completes a rent schedule from comparable rentals. For small multifamily in Modesto, sales of triplexes and fourplexes can be sparse, so share any recent sales you know about. For rents, signed leases at market levels are the best support, and under California's rent rules your in-place rents will rise only within statewide limits, so the appraiser's market rent and your actual leases should line up.
If the value comes in lower than you hoped, a rate-and-term refinance can still work if the payoff is within the program's LTV limit, or you can bring cash to closing.
Start well before your short-term loan matures. Appraisals, title and escrow in Stanislaus County can take several weeks, and any final permit sign-offs from the rehab need to be complete. Some programs look at ownership time when the value has risen sharply since purchase, so check seasoning early; our seasoning guide covers the common rules.
California's tight insurance market can delay refinances. If your current policy was written for a vacant or under-renovation property, it will need to be replaced with a landlord policy for an occupied building. Some owners end up combining a FAIR Plan policy with other coverage. Start on insurance early and use the real premium in your DSCR.
Lenders also check that the policy names the borrowing entity correctly and carries the required liability and loss of rents coverage. Having the declarations page ready when you apply avoids a last-minute scramble before closing.
Expect an appraisal, title insurance, escrow and recording fees, and initial escrow deposits for taxes and insurance. A refinance does not trigger documentary transfer tax because the deed is not being transferred. Your payoff will include interest through the payoff date.
If you have stabilized several Stanislaus County rentals, a blanket portfolio loan can refinance five or more under one loan and one payment, qualified on combined cash flow, with release provisions for later sales. For one or two properties, individual DSCR loans are usually simpler.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, payoff statement, leases, tax bill and estimated value through the form below, or call (877) 298-1001. For statewide context, see our California rate-and-term refinance page.
Yes. Once the property is leased or ready to lease, a DSCR loan can pay off the bridge loan and qualify on the rent.
Up to 80% LTV on some rate-and-term programs. It can be lower on 5-8 unit properties and larger balances and varies by program.
No. A refinance does not trigger a Prop 13 reassessment. New construction added during a rehab can be assessed separately.
No. Documentary transfer tax applies to deed transfers, not to refinancing a property you already own.
No. The loan qualifies on the property's rent, with a 620 minimum credit score.
The refinance can still work if the payoff fits within the LTV limit. Otherwise you can bring cash to closing.
The ADU's rent can count once it is permitted and leased, but the county may assess the new construction, which can raise taxes.
Yes. A rate-and-term DSCR refinance can pay off the flip loan once the property is finished and leased.
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