Washington investors in Tacoma, Spokane, Vancouver and the Seattle suburbs 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 the rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in Washington, 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.
Washington's rental stock includes early 1900s homes and small multifamily in Seattle and Tacoma, newer suburban construction in Pierce, Snohomish and Clark counties, and lower-priced single-family homes in Spokane, Yakima and the Tri-Cities. Accessory dwelling units have become common as cities loosened rules.
Washington adopted a statewide limit on annual rent increases in 2025 that applies to many residential rentals, with exemptions for newer buildings. Seattle and some other cities layer on their own tenant rules. Underwriting will use the current lease rent, so plan around what you can legally collect.
Washington's real estate excise tax (REET) is tied to sales, so a refinance where the owner stays the same generally avoids it. Expect lender's title insurance, county recording fees for the new deed of trust and escrow fees.
Closings in Washington typically run through an escrow company or title company, which handles the payoff, reconveyance of the old deed of trust and recording of the new one.
Your term sheet will show lender costs separately from title and government charges. Confirm the final figures with your title company or closing attorney.
Washington has no state income tax on wages, and property taxes vary by county and levy district. Use the current bill rather than an older one, since voter-approved levies can change it. Insurance is usually moderate, but older roofs and wildfire exposure east of the Cascades can affect quotes.
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 a Spokane single-family rental using a hard money loan that now has a payoff of $279,000 interest-only, or about $2,674 a month in interest. The property now appraises at $400,000 and rents for $2,700 a month, with taxes and insurance of about $470 a month.
A rate-and-term loan of $288,000 covers the payoff plus $9,000 of closing costs, which is about 72.0% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $1,916, so the total payment is about $2,386 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 | $400,000 |
| Hard money payoff | $279,000 |
| Closing costs financed | $9,000 |
| New loan amount | $288,000 |
| Loan-to-value | About 72.0% |
| Principal and interest | About $1,916 |
| Taxes and insurance | $470 |
| Total monthly payment | About $2,386 |
| Monthly rent | $2,700 |
| DSCR | About 1.13x |
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.
Seattle, Bellevue and the Eastside have the highest prices and the thinnest ratios. Tacoma, Everett and the Pierce and Snohomish suburbs offer somewhat lower prices. Vancouver draws investors from the Portland area. Spokane, Yakima and the Tri-Cities have lower prices relative to rent.
Many Washington cities, including Seattle, regulate short-term rentals with licensing and limits on the number of units an operator can run. Confirm local rules before qualifying 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 Washington, starting at $150,000.
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.
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.
Generally not. The real estate excise tax is tied to sales, so a refinance where the owner stays the same usually avoids it. Confirm with escrow.
The underwriter uses the current lease rent and the appraiser's market rent estimate. The ratio has to work at the rent you can legally collect.
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.
Standard programs look for 1.0x, meaning rent at least equals the full payment. Sub-1.0 programs exist for rentals that fall slightly short.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.