Albuquerque and Las Cruces investors often buy dated houses with hard money and fix them up. Once a tenant is in place, a DSCR rate-and-term refinance replaces that short-term loan with long-term financing based on the rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in New Mexico, up to 80% LTV on some programs, qualifying on the property's rent instead of your income. It is the standard way to pay off a hard money, bridge or higher-rate loan and move into a long-term payment, with cash back limited to a small allowance. The rent has to cover the new payment at 1.0x on standard programs, the minimum credit score is 620, LLC borrowers are standard and loans start at $150,000.
The idea is simple: trade the current loan for a better one. The new balance covers the payoff and closing costs, can reach up to 80% LTV on some programs (cash-out tops out), and any cash back is held to a small allowance set by the program.
Underwriting centers on the DSCR: rent divided by principal, interest, taxes, insurance and HOA dues. The standard minimum is 1.0x, with sub-1.0 programs for rentals just under that line. Minimum credit is 620, LLCs are standard, terms run up to 30 years, and you do not need W-2s or tax returns.
| Rate-and-term | Cash-out | |
|---|---|---|
| Max LTV | Up to 80% on some programs | Up to 75% |
| Cash to borrower | Small allowance only | Equity above payoff |
| Typical goal | Lower rate or payment, exit short-term debt | Pull equity for the next deal |
| Qualifies on | Rent (DSCR) | Rent (DSCR) |
A bridge or hard money loan gets the property bought and fixed, but it is not meant to be held. The standard exit is to refinance into a DSCR loan once the unit is rented, rather than paying higher short-term interest or asking for an extension.
New Mexico's rental stock includes mid-century stucco and frame homes across Albuquerque, newer subdivisions in Rio Rancho and Las Cruces, and adobe and pueblo-style homes in Santa Fe and northern towns. Flat roofs, older HVAC and swamp coolers are common rehab items.
Flat roofs and older roofing systems are worth documenting, since they can come up in the appraisal and in the insurance quote. Keep receipts and contractor invoices from your rehab.
New Mexico does not have a real estate transfer tax, which keeps refinance closing costs lower than in many states. Expect lender's title insurance, county recording fees for the new mortgage and settlement charges.
Ask your title company whether a reissue or refinance rate applies on the title policy if you bought recently. They will also confirm the old lien is paid and released.
Because closing costs are usually rolled into the balance, they affect both the LTV and the ratio, so ask title for real numbers before you lock.
New Mexico property taxes are moderate compared with many states, and annual increases in valuation on residential property are limited by state law. Use the current tax bill. Insurance is usually moderate, though wildfire exposure in some areas and roof condition can affect quotes.
When a file is close to the line, the fix is usually on the expense side: shop the insurance, confirm the actual tax bill and check whether any special assessments are scheduled.
This example is illustrative and not a quote. An investor bought and renovated an Albuquerque single-family rental using a hard money loan that now has a payoff of $232,000 interest-only, or about $2,223 a month in interest. The property now appraises at $330,000 and rents for $2,250 a month, with taxes and insurance of about $450 a month.
A rate-and-term loan of $240,000 covers the payoff plus $8,000 of closing costs, which is about 72.7% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $1,597, so the total payment is about $2,047 and the DSCR is about 1.10x, above the 1.0x standard minimum. The investor stops paying short-term interest and starts paying down principal, with no cash taken out.
| Item | Amount |
|---|---|
| Appraised value | $330,000 |
| Hard money payoff | $232,000 |
| Closing costs financed | $8,000 |
| New loan amount | $240,000 |
| Loan-to-value | About 72.7% |
| Principal and interest | About $1,597 |
| Taxes and insurance | $450 |
| Total monthly payment | About $2,047 |
| Monthly rent | $2,250 |
| DSCR | About 1.10x |
Programs differ on seasoning. If you closed on the property recently, some will use the after-rehab appraisal and others will base the loan on what you paid plus documented improvements. Because rate-and-term only needs to cover the payoff, the lower figure is often still enough.
Expect the appraisal to include a market rent estimate alongside the value. Underwriting compares it with your lease, and the figure it uses depends on the program.
Albuquerque is the state's largest rental market, with demand from Kirtland Air Force Base, Sandia National Laboratories and the University of New Mexico. Rio Rancho adds newer suburban rentals. Las Cruces benefits from New Mexico State University and White Sands-related employment.
Santa Fe has high prices and a city short-term rental permit system with limits on non-owner STRs. Taos and other northern towns also see vacation rental demand. Confirm local rules before relying on nightly income.
Having these ready before you apply keeps the appraisal and underwriting moving.
Choose rate-and-term when you mainly want out of short-term debt or into a lower payment. Choose cash-out, up to 75% LTV, when you want to pull equity. If the ratio is short, a sub-1.0 program or finishing the lease-up may solve it. Leverage on 5-8 unit properties and larger balances varies by program.
Yes. Our investor loans are business-purpose loans on non-owner-occupied property, and we offer DSCR rate-and-term refinances on 1-8 unit rentals across New Mexico, starting at $150,000.
Yes. LLC borrowers are standard. We will ask for the operating agreement, formation documents and good standing for the entity.
Yes. Residential DSCR programs cover 1-8 units. Maximum LTV may be lower on 5-8 units and varies by program.
New Mexico does not have a real estate transfer tax. You will still pay title insurance, recording fees and settlement charges.
Possibly, but Santa Fe limits STR permits, so the permit status matters. If the property cannot keep a permit, it may need to qualify on long-term rent instead.
Up to 80% LTV on some programs. Maximum LTV can be lower on 5-8 unit properties and larger balances, and it varies by program.
Only a small amount set by the program. If you want to pull equity out, a cash-out refinance up to 75% LTV is the better option.
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