Utah investors in Salt Lake City, Provo, Ogden and St. George often buy with short-term money and refinance once the rental is leased. A DSCR rate-and-term refinance replaces that loan with long-term financing based on rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in Utah, 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.
Utah's rental stock includes newer suburban single-family and townhomes along the Wasatch Front, older homes in Salt Lake City and Ogden, and vacation properties in St. George and Park City. Basement apartments and ADUs are common.
Many Utah homes have basement apartments or accessory units. A legally permitted unit with its own lease adds rent to the ratio. Have the permit ready.
Utah does not have a real estate transfer tax. Expect lender's title insurance, county recording fees for the new trust deed and settlement charges.
Utah uses trust deeds. Your title company handles the payoff and recording. If the property is in an HOA, title will request a payoff or status letter to confirm dues are current, and any leasing restrictions in the CC&Rs are worth checking before you refinance.
Your term sheet will show lender costs separately from title and government charges. Confirm the final figures with your title company or closing attorney.
Utah gives a residential exemption that lowers taxable value for primary residences, and long-term rentals occupied by a tenant as their primary home can often qualify, while short-term rentals generally do not. Confirm with the county assessor. Earthquake coverage is optional but worth considering.
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 an Ogden single-family rental with basement unit using a hard money loan that now has a payoff of $300,000 interest-only, or about $2,875 a month in interest. The property now appraises at $430,000 and rents for $2,850 a month, with taxes and insurance of about $410 a month.
A rate-and-term loan of $309,000 covers the payoff plus $9,000 of closing costs, which is about 71.9% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $2,129, so the total payment is about $2,539 and the DSCR is about 1.12x, 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 | $430,000 |
| Hard money payoff | $300,000 |
| Closing costs financed | $9,000 |
| New loan amount | $309,000 |
| Loan-to-value | About 71.9% |
| Principal and interest | About $2,129 |
| Taxes and insurance | $410 |
| Total monthly payment | About $2,539 |
| Monthly rent | $2,850 |
| DSCR | About 1.12x |
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.
Salt Lake City and its suburbs are the main rental market. Provo and Orem have university demand. Ogden offers lower prices. Logan, near Utah State University, and the growing Tooele and Heber areas also see rental demand.
St. George and Park City have active vacation rental markets, with local rules that vary. Confirm before relying on nightly income.
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 Utah, starting at $150,000.
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.
Long-term rentals used as a tenant's primary residence can often qualify; short-term rentals generally do not. Confirm with the county assessor.
A legally permitted unit with its own lease adds rent to the ratio. Have the permit and lease ready.
Yes. Residential DSCR programs cover 1-8 units. Maximum LTV may be lower on 5-8 units and varies by program.
Up to 80% LTV on some programs. Maximum LTV can be lower on 5-8 unit properties and larger balances, and it varies by program.
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