In New York City, a rate-and-term refinance can carry a large closing cost that most of the country never sees: the mortgage recording tax. On a two- or three-family in Queens or the Bronx, how the new loan is structured can change cash to close by thousands.
In short: LendingStreet refinances 1-8 unit rentals in the New York City 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 New York City, most refinances are two- and three-family homes in the outer boroughs, and the mortgage recording tax, CEMA options and rent stabilization on six-unit-plus buildings are what to ask about first.
New York's outer boroughs have deep, steady rental demand. Two- and three-family homes in Bedford-Stuyvesant, Ridgewood, Jamaica, Wakefield and Staten Island are the core of the small-landlord market, and their rents can support a long-term payment.
Investors often buy with bridge or hard money to compete, renovate and then refinance. Others hold buildings on bank loans that are resetting. A rate-and-term DSCR refinance qualifies on the rent roll, which helps owners whose tax returns show little income after depreciation.
Each borough has its own stock and the questions that come with it.
| Area | Typical rental stock | Common refinance situation |
|---|---|---|
| Bedford-Stuyvesant, Bushwick and Crown Heights | Brownstones and two- to four-family homes | Paying off a bridge after renovation |
| Ridgewood, Jamaica and Queens Village | Two-family homes | Rate-and-term on a long-held two-family |
| Wakefield, Williamsbridge and the north Bronx | Two- and three-family homes | Replacing a bank loan |
| Staten Island North Shore | Single-family and two-family homes | Refinancing a rehab |
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 New York cash-out page instead.
Common reasons to choose rate-and-term:
This example is illustrative and not a quote. A three-family in Wakefield in the Bronx was bought with hard money, renovated and leased on all three floors. It appraises at $1,050,000 and rents for $7,800 a month. The hard money loan balance is $700,000, with an interest-only payment of about $6,708 a month.
A rate-and-term DSCR refinance of $721,000 covers the payoff plus about $21,000 in estimated closing costs, roughly 69% LTV. Estimated principal and interest on a 30-year fixed loan is about $4,858. With taxes of $620 and insurance of $320, the monthly payment is about $5,798, for a DSCR of about 1.35x.
The new payment is about $1,851 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 | $700,000 | $721,000 |
| Monthly loan payment | $6,708 (interest-only) | $4,858 (est. principal and interest) |
| Property taxes | $620 | $620 |
| Insurance | $320 | $320 |
| Total monthly payment | $7,648 | $5,798 |
| DSCR at $7,800 rent | About 1.02x | About 1.35x |
| 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. In NYC, appraisers compare two- and three-family sales and rents in the same borough, and legal unit count must match the certificate of occupancy.
One- to three-family homes are Class 1 property, with yearly limits on assessed value increases. Four-unit-plus buildings are Class 2, assessed differently. Use the Department of Finance notice of property value.
New York State and City charge a mortgage recording tax on new mortgages. A Consolidation, Extension and Modification Agreement (CEMA) can let the new loan absorb the existing mortgage so tax is due only on new money. Not every program or existing lender allows it, so ask early.
Parts of southern Brooklyn, Queens near Jamaica Bay and Staten Island's shore are in flood zones. Older frame and brick buildings need current insurance with liability limits that fit a multi-unit property.
Buildings with six or more units built before 1974 are generally covered by rent stabilization, which limits increases. In a 6-8 unit building, the DSCR uses the legal registered rents. One- to five-unit buildings are usually not stabilized unless specific history applies.
Local Law 18 requires host registration and largely limits short-term rentals to hosts who live in the unit, so most NYC refinances use 12-month leases.
Also confirm the certificate of occupancy matches the number of units being rented. An illegal basement or cellar unit will not be counted in the rent, and it can raise questions with the appraiser and the insurer.
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 NYC, that usually means a two- or three-family renovated with bridge money and leased on every floor.
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 Brooklyn, Queens, the Bronx and Staten Island, with Manhattan reviewed case by case. 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.
A CEMA lets the new loan absorb the existing mortgage so recording tax is due only on new money. Not every program or existing lender allows it, so ask early.
Yes, for covered buildings. The DSCR uses the legal registered rents, not market rents.
Generally no. Local Law 18 largely limits short-term rentals to hosts who live in the unit.
We focus on 1-8 unit rentals in Brooklyn, Queens, the Bronx and Staten Island, with Manhattan reviewed case by case.
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.
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.
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