In the Salt Lake Valley, a lot of rental value is created by turning a single house into two units with a legal basement apartment or ADU. A DSCR rate-and-term refinance pays off the short-term loan once both units are leased.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment properties in the Salt Lake Valley, replacing hard money, bridge debt or an existing loan with a long-term payment sized on rent. Rate-and-term goes up to 80% LTV on some programs, the standard minimum DSCR is 1.0x, and no W-2s or tax returns are required.
Salt Lake City's older neighborhoods, including Sugar House, Liberty Wells, 9th and 9th, the Avenues, Rose Park, Glendale and Poplar Grove, have bungalows and brick homes with full basements that lend themselves to second units. West Valley City, South Salt Lake, Murray, Millcreek and Taylorsville add more affordable single-family and duplex stock.
Strong in-migration, a large university and healthcare employment base around the U of U, and a tight housing supply have kept long-term rental demand strong. Investors who add a unit or renovate with bridge or hard money usually want to lock in a 30-year payment as soon as the leases are signed.
The property type and location shape both value and rent.
| Area | Typical rental stock | Refinance angle |
|---|---|---|
| Rose Park, Glendale, Poplar Grove | Post-war homes with basements | Add a legal basement unit, then refinance on both rents |
| Sugar House, Liberty Wells, 9th and 9th | Bungalows and older duplexes | Higher values; refinance out of bridge debt after renovation |
| The Avenues | Older homes, some converted to units | Confirm legal unit count and historic rules |
| West Valley City, Taylorsville, Murray | 1970s to 1990s single-family | Replace an adjustable or maturing loan |
With cash-out, you borrow more than you owe and keep the difference, up to 75% LTV. With rate-and-term, the new loan pays off what you owe and the closing costs, and the purpose is better terms rather than cash. That is why some programs allow up to 80% LTV on rate-and-term.
Both qualify the same way, on the DSCR: rent divided by principal, interest, taxes, insurance and HOA dues. The standard minimum is 1.0x, and sub-1.0 programs exist for properties where the rent falls a little short.
Utah gives a residential property tax exemption to homes used as someone's primary residence, and long-term rentals where the tenant lives full time can qualify. Short-term rentals do not. Counties may ask the owner to file a declaration, so check that your rental is classified correctly with the Salt Lake County Assessor.
Utah does not have a separate mortgage recording tax, so refinance closing costs are mostly title, escrow, appraisal and lender costs. Earthquake coverage is a separate decision; if you carry it, its premium counts in the payment.
Salt Lake City requires a business license for rental units, and its landlord program can lower the fee for owners who complete training and meet requirements. Suburbs set their own rules, so check each city before you lease.
Basement and accessory units need to meet code and zoning to count as legal units. Salt Lake City generally restricts nightly rentals in residential zones, so our refinances in the city are usually based on long-term leases.
This example is illustrative and not a quote. An investor owns a Rose Park home with a newly legalized basement unit, financed with a bridge loan. It appraises at $560,000, the payoff on the existing loan is $410,000, and estimated closing costs of $9,000 are rolled into the new loan, for a balance of $419,000, about 74.8% LTV. Rent is $3,600 a month.
Estimated principal and interest on a 30-year loan comes to about $2,858. Adding taxes of $280 and insurance of $110 gives a total payment of about $3,248, for a DSCR of about 1.11x, above the 1.0x standard minimum. Compared with the old loan, the monthly payment drops by about $902, and the balance now amortizes.
It helps to know the limits before the appraisal. At the same taxes and insurance, rent of about $3,248 would put the DSCR at 1.0x, and the current $3,600 rent would carry a loan of roughly $471,000 at that level. Anything well inside those numbers is a comfortable file.
| Item | Bridge loan (interest-only) | New DSCR loan |
|---|---|---|
| Appraised value | $560,000 | $560,000 |
| Loan balance | $410,000 | $419,000 |
| LTV | 73.2% | 74.8% |
| Principal and interest (or interest-only) | $3,760 | $2,858 |
| Taxes, insurance and HOA | $390 | $390 |
| Total monthly payment | $4,150 | $3,248 |
| DSCR at $3,600 rent | About 0.87x | About 1.11x |
The best time to start is when the work is finished, permits are closed and a tenant is signed, ideally with a couple of months left before the short-term loan matures. That leaves room for the appraisal and title work without paying an extension.
How long you must own before the lender uses the new value varies by program. Some go by the appraisal soon after a rehab; some limit the loan to cost plus documented improvements early on. A clean record of the rehab budget helps either way.
Vacancy at the time of refinance does not always stop the loan, since some programs use market rent from the appraisal. Still, a signed lease removes a common question and usually makes the file stronger.
Having these ready when you apply avoids most delays.
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us about the Salt Lake City-area rental, the existing loan and the lease, and we will check the ratio with realistic taxes and insurance before you order an appraisal.
Investors with several rentals can compare a single-property refinance with a blanket portfolio loan, which puts five or more properties on one closing and one payment.
You can also compare with our Utah rate-and-term refinance page. Get a quote with the form below or call (877) 298-1001.
Only if it is legal under city code and zoning. A permitted unit can be counted in the rent and the value; an unpermitted one usually cannot.
The city requires one for rental units. Having it in place shows the property is operating legally, which helps a smooth refinance.
Yes. We refinance 1-8 unit rentals throughout Salt Lake County and neighboring counties when the rent and value support the loan.
It depends on the appraisal, title and how complete the file is. Starting with a full document package shortens the timeline.
DSCR loans start at $150,000 with no stated maximum. Larger balances get more review, and max LTV can vary by program.
Some programs use the appraiser's market rent estimate instead of a signed lease. Terms vary by program.
Yes. That is one of the most common uses of a rate-and-term refinance once the rehab is done and the property is leased.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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