In Santa Fe, remodels take longer than planned. Historic review, busy trades and short building seasons stretch timelines, and every extra month on a hard money loan eats into the return. A rate-and-term refinance ends that clock.
In short: LendingStreet's DSCR rate-and-term refinance replaces hard money, bridge debt and existing mortgages on 1-8 unit rentals in Santa Fe and across New Mexico. It qualifies on the property's rent rather than your income, can go up to 80% LTV on some programs, and offers 30-year terms. The goal is a lower payment, a longer term or a cleaner structure, with little or no cash out.
The most common file is a renovated rental: an investor bought a midcentury home in Casa Solana, Bellamah or Casa Alegre with short-term money, replaced the roof, refinished the plaster and floors and updated systems, and now has a tenant in place. Other files include paying off a maturing loan from a local bank, replacing seller financing that is coming due, or moving a property from a personal name into an LLC.
Each of these borrowers wants to keep the property, not pull cash from it. They want a fixed long-term schedule that the rent can carry.
Because DSCR loans qualify on the property rather than personal income, they suit investors whose tax returns show heavy depreciation or uneven self-employment income, and they do not cap the number of rentals you own.
This example is illustrative and not a quote. An investor remodeled a three-bedroom Casa Solana home and leased it for $3,250 a month. The hard money balance is $372,000, with interest-only payments of about $3,410. Taxes, based on the value reset when the investor bought, are about $320 a month, and insurance is $175. The current payment is about $3,905 and the rent covers it only about 0.83x.
The home appraises at $560,000. A new DSCR loan of $378,000, covering the payoff and about $6,000 in closing costs, is about 67.5% LTV. Estimated principal and interest is about $2,643, for a total payment of about $3,138 and a DSCR of about 1.04x, on a 30-year schedule with no maturity date.
| Item | Hard money today | DSCR refinance |
|---|---|---|
| Loan balance | $372,000 | $378,000 |
| Monthly principal and interest or interest-only | $3,410 | $2,643 |
| Taxes | $320 | $320 |
| Insurance | $175 | $175 |
| Total payment | $3,905 | $3,138 |
| DSCR at $3,250 rent | 0.83x | 1.04x |
| Term | Short-term, maturity date | 30-year schedule |
When you bought the house, the county reset its value to market. Since then, New Mexico's cap limits annual increases on most residential property, though the assessor can add value for new construction such as an addition or a new casita. A refinance does not reset the value. Use your current tax bill in the refinance numbers, and if you added square footage, ask the Santa Fe County Assessor how it will be valued.
Lease the property first; a signed lease at market rent is the strongest support for the ratio. Close out building permits, including any historic district approvals, since open permits can hold up the appraisal or title. Keep receipts and photos for the roof, stucco, mechanical and kitchen work so the appraiser can see what was done.
If the remodel added a bedroom, a bathroom or square footage, include the permits and the floor plan. Those changes can lift both the value and the market rent, and they need to be documented to count.
Appraisers compare your house with recent sales of similar style, age and location. A fully remodeled midcentury home surrounded by original-condition neighbors may need careful comparables, and features buyers pay for in Santa Fe, such as restored vigas, kiva fireplaces, refrigerated air and a recoated roof, should be called out. Rent comparables come from long-term leases in the same part of town. Strong photos of the finished work help the appraiser see the difference between your house and its unrenovated neighbors.
Some programs base the new loan on the post-remodel appraised value soon after completion; others limit it to purchase price plus documented improvements until the property has been owned longer. Rate-and-term can go up to 80% LTV on some programs. Leverage can be lower on 5-8 unit properties and larger balances, and it varies by program.
Santa Fe's prices make some refinances tight even after a good remodel. If the ratio falls short, you can pay down part of the short-term loan at closing, document a higher market rent, add a legal second unit later, or look at sub-1.0 DSCR programs. We would rather show you the options before the hard money matures than after.
If you only need to retire the existing debt and costs, rate-and-term is simpler and allows higher leverage on some programs. If you want to pull equity for the next project, see our Santa Fe cash-out page, where the limit is 75% LTV and the rent usually decides how much you can take.
Send the address, payoff letter, lease, tax bill and insurance quote through the form below, or call (877) 298-1001. We will show the new payment and DSCR at a few loan amounts. Our investor loans are business-purpose loans on non-owner-occupied property. See our New Mexico rate-and-term page for statewide details.
A refinance that pays off existing debt and closing costs with little or no cash to you, qualified on the property's rent rather than personal income.
Often, yes. Some programs use the post-remodel value soon after completion; others limit the loan until you have owned the property longer.
Up to 80% LTV on some rate-and-term programs. Leverage can be lower on 5-8 unit properties and larger balances.
A refinance does not reset the capped valuation in New Mexico. New construction, such as an addition, can be added to the value.
A signed lease is the strongest support. Without one, the appraiser's market rent estimate is used.
Yes. Close out building permits and any historic approvals before you apply. An open permit can show up in the appraisal or title review and delay closing, sometimes past your hard money maturity date.
Yes. Many investors retitle into an LLC during a rate-and-term refinance; check the property tax treatment first.
Yes. Paying off seller financing on a 1-8 unit rental is a common rate-and-term use, especially when a balloon payment is coming due. Bring the note, payment history and payoff figure.
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