Ohio is one of the busiest states for buy, rehab and refinance investors, from Columbus and Cincinnati to Cleveland, Dayton, Akron and Toledo. A DSCR rate-and-term refinance takes you out of the rehab loan and into long-term financing based on the rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in Ohio, 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.
A rate-and-term refinance replaces the loan you have now with a new one, usually to get a lower rate, a longer term or a fixed payment. The new balance is sized to pay off the existing loan plus closing costs, and it can go up to 80% LTV on some programs, compared with up to 75% on a cash-out. Cash back at closing is limited to a small amount set by the program.
The loan qualifies on the debt service coverage ratio, the property's rent divided by the full monthly payment: principal, interest, taxes, insurance and any HOA dues. Standard programs look for 1.0x or better, and sub-1.0 programs exist for rentals that fall a little short. There are no W-2s or tax returns, the minimum credit score is 620, LLC borrowers are standard and 30-year terms are available.
| 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) |
Short-term loans are built to be replaced. They are interest-only, priced higher and due on a short maturity. Once the rehab is finished and a tenant is signed, a rate-and-term DSCR loan pays off that balance and puts the property on a long-term amortizing payment.
Ohio's rental stock is heavy on older single-family homes, doubles and up-and-down duplexes built before 1950, especially in Cleveland, Akron, Dayton and Toledo. Columbus and Cincinnati add newer suburban rentals. Most of this stock needs work, which is why hard money is so common.
Lower purchase prices mean some Ohio houses do not reach the $150,000 minimum loan size on their own. A duplex, fourplex or several rentals refinanced together can solve that.
Ohio's conveyance fee is charged on deeds when property is sold, so a refinance where the owner stays the same usually does not trigger it. Expect lender's title insurance, county recording fees for the new mortgage and settlement charges.
Many Ohio cities require rental registration, and some, including Cleveland, have lead-safe certification rules for older rentals. Having those in order supports the refinance and avoids delays at closing.
Your term sheet will show lender costs separately from title and government charges. Confirm the final figures with your title company or closing attorney.
Ohio property taxes vary widely by county and school district, and recent reappraisals raised values in many counties. Use the current bill. Insurance is usually moderate, but older roofs, knob-and-tube wiring and vacant periods can affect quotes.
Every dollar of tax and insurance lowers the ratio the same way a higher rate would. If the numbers are tight, a better insurance quote or a corrected tax figure can be the difference between clearing 1.0x and falling short.
This example is illustrative and not a quote. An investor bought and renovated a Columbus single-family rental using a hard money loan that now has a payoff of $196,000 interest-only, or about $1,960 a month in interest. The property now appraises at $280,000 and rents for $2,100 a month, with taxes and insurance of about $520 a month.
A rate-and-term loan of $203,000 covers the payoff plus $7,000 of closing costs, which is about 72.5% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $1,334, so the total payment is about $1,854 and the DSCR is about 1.13x, 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 | $280,000 |
| Hard money payoff | $196,000 |
| Closing costs financed | $7,000 |
| New loan amount | $203,000 |
| Loan-to-value | About 72.5% |
| Principal and interest | About $1,334 |
| Taxes and insurance | $520 |
| Total monthly payment | About $1,854 |
| Monthly rent | $2,100 |
| DSCR | About 1.13x |
Seasoning varies by program. Some will refinance soon after purchase using the new appraised value; others want several months of ownership or cap the loan at purchase price plus documented improvements. On a rate-and-term refinance this matters less than on a cash-out, but it can still limit the loan if you bought recently.
The appraiser will also estimate market rent. Underwriting generally uses the lease rent, the market rent estimate or the lower of the two, depending on the program, so a signed lease at a realistic rent helps.
Columbus has the strongest population and job growth in the state and the highest prices. Cincinnati and its Kentucky suburbs offer a mix of older and newer stock. Cleveland, Akron, Dayton and Toledo have lower prices and often strong rent relative to value.
Because prices are lower in many Ohio cities, ratios often clear easily, but loan sizes can be small. Check the $150,000 minimum before you start.
Having these ready before you apply keeps the appraisal and underwriting moving.
If the property has gained a lot of value and you want to fund the next purchase, a cash-out refinance up to 75% LTV may fit better. If the rent does not yet cover the payment, finishing the lease-up first, or looking at a sub-1.0 DSCR program, is usually smarter than forcing the numbers. Larger 5-8 unit properties may also see lower maximum LTV, which 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 Ohio, starting at $150,000.
It depends on the program. Some use the new appraised value soon after purchase; others base the loan on purchase price plus documented improvements until a seasoning period passes.
Standard programs look for 1.0x, meaning rent at least equals the full payment. Sub-1.0 programs exist for rentals that fall slightly short.
Generally not. Ohio's conveyance fee is tied to deeds on a sale. A refinance where the owner stays the same usually avoids it.
Cleveland requires lead-safe certification for many older rentals. Having it in place keeps the property compliant and avoids questions during underwriting.
No. The loan qualifies on the property's rent. You need a 620 or higher credit score, reserves and entity documents if you use an LLC.
Yes. LLC borrowers are standard. We will ask for the operating agreement, formation documents and good standing for the entity.
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