The Seacoast has plenty of investors who bought with short-term money: a hard money loan for a rehab, a bridge loan to win a deal, or a five-year bank note that is now coming due. A rate-and-term DSCR refinance replaces that debt with a long-term loan based on the rent.
In short: LendingStreet refinances 1-8 unit rentals in Portsmouth and the Seacoast with DSCR rate-and-term loans, up to 80% LTV on some programs, to pay off hard money, bridge or existing loans. The loan qualifies on the rent with a standard 1.0x minimum DSCR and a 620 minimum credit score. Thirty-year terms are available, and LLC borrowers are standard.
Most rate-and-term refinances we see in the area fall into three groups. Flippers who decided to keep a Rochester or Dover multi-family after the rehab. Investors who used a bridge loan to buy a Portsmouth property quickly and have now leased it. And long-time owners whose local bank loan has a balloon, an adjustment date or a payment they want to lower.
Each group has the same goal: replace a loan built for a short project with one built for a long hold. The difference is timing. A flipper may be racing a maturity date, while a long-time owner may be planning months ahead of a rate adjustment.
A rate-and-term refinance pays off the existing loan and closing costs without taking meaningful cash out. Because there is no cash-out, leverage can go up to 80% LTV on some programs, compared with 75% for cash-out. The goal is a lower or fixed payment, a longer term, or the end of short-term debt.
Closing costs can usually be rolled into the new loan as long as the total stays inside the program's LTV limit. A rate-and-term refinance can also remove a partner or move the property into an LLC, depending on the program.
Unlike a purchase, a refinance in the same name does not trigger the New Hampshire transfer tax, which keeps closing costs lower. You will still pay for the appraisal, title, recording and any lender fees.
This example is illustrative and not a quote. An investor bought and renovated a Rochester three-family with a hard money loan that now has a $395,000 balance and interest-only payments of about $3,950 a month. The units lease for $1,500, $1,450 and $1,400, or $4,350 a month, and the building appraises at $560,000.
The new DSCR loan is $405,000, covering the payoff and about $10,000 of costs, about 72% of value. Estimated principal and interest on a 30-year term is about $2,832. With taxes of $850 and insurance of $190, the payment is about $3,872 and DSCR is about 1.12x.
The new payment is higher than the old interest-only payment because it includes principal and a full tax and insurance escrow, but it is fixed for the long term and removes the maturity risk. Most investors accept that trade once a property is stable.
| Item | Before (hard money) | After (DSCR loan) |
|---|---|---|
| Loan balance | $395,000 | $405,000 |
| Monthly loan payment | $3,950 interest-only | $2,832 amortizing |
| Term | Short-term, maturing | 30 years |
| DSCR | Not measured | 1.12x |
Start the refinance well before the short-term loan matures. Appraisals, title and insurance take time, and an extension on hard money can be expensive. Have leases signed and tenants paying, because the DSCR is based on the rent the building actually produces or supports.
If any unit is still vacant when you apply, some programs can use the appraiser's market rent for it, but signed leases are always stronger. Plan the refinance for after the last lease is signed if your timeline allows it.
Keep the hard money or bridge lender informed of your refinance timeline. Many short-term lenders will provide a payoff letter quickly, but extension fees can apply if closing slips past maturity.
Rochester, Somersworth and Dover have higher tax rates per $1,000 than Portsmouth, and a rehab can raise the assessment at the next revaluation. Use a tax figure that reflects the renovated building. Older multis may also need updated insurance once the work is finished.
Insurance can change too. A renovated building with new wiring, plumbing and heat may qualify for better coverage, while a building that still has older systems may need extra review. Get the quote early so it does not delay closing.
If rents are still ramping up, a rate-and-term refinance at a lower loan amount, with some cash paid down, may be the cleanest way to exit a short-term loan. Another option is to extend the bridge or hard money loan briefly while the last units lease. Sub-1.0 DSCR programs exist for some files, and our team can show you the trade-offs of each path on the same property.
If you need cash for the next deal, a cash-out refinance up to 75% LTV may fit better. If you want the strongest ratio and the most leverage against the payoff, rate-and-term is the cleaner choice. Many Portsmouth-area investors do rate-and-term first and cash out later once seasoning allows.
Some investors also use the rate-and-term refinance to move from a loan in their personal name to one in an LLC, which can make future refinancing and portfolio loans simpler.
Owners with five or more rentals sometimes refinance them together into a blanket portfolio loan with one payment. It can simplify management for investors who own across Dover, Rochester and Portsmouth.
A blanket loan also includes release provisions, so you can sell one property later without refinancing the whole group.
Send the address, payoff, rents and your timeline. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or request a quote with the form below.
Yes. A rate-and-term DSCR refinance can pay off hard money once the property is leased and the rent supports the payment.
Up to 80% LTV on some programs, based on the appraised value.
Rate-and-term rules are usually more flexible than cash-out seasoning, but they vary by program.
The standard minimum is 1.0x. Sub-1.0 programs exist for some files.
Yes. Many owners replace balloon or adjustable bank loans with a 30-year DSCR loan.
It can at the next revaluation. Budget for the renovated value.
Yes. LLC borrowers are standard.
Usually, as long as the total loan stays inside the program's LTV limit and the rent supports the payment.
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