Milwaukee's upper-and-lower duplexes are a classic hard money rehab. Across Wisconsin, a DSCR rate-and-term refinance takes you out of that short-term loan and into long-term financing based on the rent.
In short: Yes, LendingStreet offers DSCR rate-and-term refinances on 1-8 unit investment property in Wisconsin, 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.
Wisconsin's rental stock is heavy on older two-family flats in Milwaukee, Racine and Kenosha, many with separate upper and lower units. Madison adds student and professional rentals, and Green Bay, Appleton, Oshkosh, Eau Claire and La Crosse offer older single-family and small multifamily.
Milwaukee and some other cities require rental registration or inspections, and many older rentals have lead paint. Keep compliance documents and records of your renovation ready for underwriting.
Wisconsin's real estate transfer fee applies to conveyances on a sale, so a refinance where the owner stays the same usually avoids it. Expect lender's title insurance, county recording fees for the new mortgage and settlement charges.
Your title company will order the payoff and record the new mortgage. If the property has unpaid city charges, such as water bills that can be added to the tax roll, title will flag them.
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.
Wisconsin property taxes are relatively high, especially in Milwaukee and Madison, and they sit inside the DSCR payment. Use the current bill. Older roofs and heating systems, plus winter freeze risk on vacant units, can affect insurance quotes.
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 Milwaukee upper-and-lower duplex using a hard money loan that now has a payoff of $203,000 interest-only, or about $2,030 a month in interest. The property now appraises at $290,000 and rents for $2,450 a month, with taxes and insurance of about $690 a month.
A rate-and-term loan of $210,000 covers the payoff plus $7,000 of closing costs, which is about 72.4% LTV, inside the 80% limit some programs allow. On 30-year amortization, principal and interest is about $1,380, so the total payment is about $2,070 and the DSCR is about 1.18x, 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 | $290,000 |
| Hard money payoff | $203,000 |
| Closing costs financed | $7,000 |
| New loan amount | $210,000 |
| Loan-to-value | About 72.4% |
| Principal and interest | About $1,380 |
| Taxes and insurance | $690 |
| Total monthly payment | About $2,070 |
| Monthly rent | $2,450 |
| DSCR | About 1.18x |
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.
Milwaukee is the state's largest rental market, with lower prices and strong rent relative to value on duplex stock. Madison has higher prices and steady demand from the University of Wisconsin and state government. Green Bay, Appleton and the Fox Valley offer mid-range prices.
Wisconsin Dells, Door County and the Northwoods have vacation rental demand, and some towns require short-term rental licenses. Confirm local rules before relying on nightly income. Kenosha and Racine, between Milwaukee and Chicago, also draw investors to older duplex stock at lower prices.
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 Wisconsin, starting at $150,000.
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.
Generally not. It is tied to conveyances on a sale, so a refinance where the owner stays the same usually avoids it.
Yes, as long as the loan is at least $150,000 and the combined rent from both units covers the payment at the program minimum.
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.
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