Virginia investors in Richmond, Hampton Roads and Northern Virginia often buy with short-term money, update the property and lease it. A DSCR rate-and-term refinance then replaces that loan with long-term financing sized on the rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in Virginia, 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.
The idea is simple: trade the current loan for a better one. The new balance covers the payoff and closing costs, can reach up to 80% LTV on some programs (cash-out tops out), and any cash back is held to a small allowance set by the program.
Underwriting centers on the DSCR: rent divided by principal, interest, taxes, insurance and HOA dues. The standard minimum is 1.0x, with sub-1.0 programs for rentals just under that line. Minimum credit is 620, LLCs are standard, terms run up to 30 years, and you do not need W-2s or tax returns.
| 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) |
A bridge or hard money loan gets the property bought and fixed, but it is not meant to be held. The standard exit is to refinance into a DSCR loan once the unit is rented, rather than paying higher short-term interest or asking for an extension.
Virginia's rental stock is broad: townhomes and single-family homes across Northern Virginia, older brick homes, duplexes and row houses in Richmond and Petersburg, military-driven rentals in Norfolk, Virginia Beach, Chesapeake and Newport News, and university-area rentals in Charlottesville, Harrisonburg and Blacksburg.
Hampton Roads has many properties in or near flood zones, and some neighborhoods see recurring tidal flooding. Order the flood determination early, since a required flood policy goes straight into the payment.
Virginia charges a state recordation tax on deeds of trust, plus a local share in many counties and cities, and it can apply on a refinance. Reductions may apply in some cases, such as when the new loan is with the same lender. Ask your settlement agent for a written estimate, because on a larger loan it is a real line item.
Virginia's grantor tax and deed recordation tax are tied to sales, so a refinance that keeps the same owner usually avoids those. Expect lender's title insurance, recording fees for the new deed of trust and settlement charges from the settlement agent or attorney.
Because closing costs are usually rolled into the balance, they affect both the LTV and the ratio, so ask title for real numbers before you lock.
Virginia property taxes are set by each county and independent city, and rates and assessment cycles vary a lot. Northern Virginia has high values and high bills, while much of southern and western Virginia is lower. Use the current bill from the locality. Coastal flood coverage and wind exposure in Hampton Roads can lift insurance costs.
When a file is close to the line, the fix is usually on the expense side: shop the insurance, confirm the actual tax bill and check whether any special assessments are scheduled.
This example is illustrative and not a quote. An investor bought and renovated a Richmond single-family rental using a hard money loan that now has a payoff of $258,000 interest-only, or about $2,472 a month in interest. The property now appraises at $370,000 and rents for $2,550 a month, with taxes and insurance of about $450 a month.
A rate-and-term loan of $267,000 covers the payoff plus $9,000 of closing costs, which is about 72.2% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $1,803, so the total payment is about $2,253 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 | $370,000 |
| Hard money payoff | $258,000 |
| Closing costs financed | $9,000 |
| New loan amount | $267,000 |
| Loan-to-value | About 72.2% |
| Principal and interest | About $1,803 |
| Taxes and insurance | $450 |
| Total monthly payment | About $2,253 |
| Monthly rent | $2,550 |
| DSCR | About 1.13x |
Programs differ on seasoning. If you closed on the property recently, some will use the after-rehab appraisal and others will base the loan on what you paid plus documented improvements. Because rate-and-term only needs to cover the payoff, the lower figure is often still enough.
Expect the appraisal to include a market rent estimate alongside the value. Underwriting compares it with your lease, and the figure it uses depends on the program.
Richmond has steady rental demand from state government, healthcare and Virginia Commonwealth University, with a mix of older city neighborhoods and suburban stock in Henrico and Chesterfield. Hampton Roads has deep military rental demand. Northern Virginia has the highest prices, so ratios there are often thinner.
Virginia Beach regulates short-term rentals and limits them to certain areas, and other localities have their own rules. If you plan to qualify on nightly income, confirm the property's permit status and zoning first.
Having these ready before you apply keeps the appraisal and underwriting moving.
Choose rate-and-term when you mainly want out of short-term debt or into a lower payment. Choose cash-out, up to 75% LTV, when you want to pull equity. If the ratio is short, a sub-1.0 program or finishing the lease-up may solve it. Leverage on 5-8 unit properties and larger balances 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 Virginia, starting at $150,000.
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.
It can. Virginia taxes recorded deeds of trust, with a local share in many places, and reductions may apply in some cases. Ask your settlement agent for the figure.
Yes. If the property is in a special flood hazard area, flood insurance is required and the premium is part of the payment the rent must cover.
Only a small amount set by the program. If you want to pull equity out, a cash-out refinance up to 75% LTV is the better option.
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.
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