DSCR Rate & Term Refinance
A DSCR rate-and-term refinance replaces an existing loan on an investment property, typically to change the interest rate, term, or loan structure without taking significant cash out. Eligible programs may qualify using the property’s rental income. Terms and eligibility vary by lender, property, and jurisdiction.
Who It's For
- Investors refinancing an existing rental loan
- Borrowers seeking to adjust their rate or loan term
- Owners moving from short-term or bridge financing to longer-term financing
Common Uses
- Changing the rate or term on an existing rental loan
- Replacing maturing short-term or bridge financing
- Consolidating an existing investment property loan
Qualification Overview
- Eligible DSCR programs generally evaluate the property’s qualifying rental income relative to the new monthly housing expense.
- Existing loan details, property value, credit, and reserves are typically reviewed.
- Qualifying methods and requirements vary by program and investor.
Common Variables
- Current loan balance and terms
- Property value and qualifying rental income
- Leverage after refinance
- Borrower credit and reserves
Eligible Property Types
- Single-family rentals
- Condominiums (eligible projects)
- 2–4 unit properties
- Certain short-term rentals (program-dependent)
Common Documentation
- Existing mortgage statement and payoff information
- Lease or market-rent support (program-dependent)
- Property insurance information
- Entity documents when vesting in an LLC
Loan Purpose
Business-purpose refinance of an investment property. Not a consumer mortgage for a primary residence.
Potential Advantages
- May adjust rate or term without a significant cash-out component
- Can provide a path off short-term or bridge financing
- May qualify using property cash flow on eligible programs
Potential Considerations
- Prepayment penalty structures may apply on the new loan
- Closing costs and terms vary by program
- Eligibility depends on property value and cash flow
Frequently Asked Questions
- What is the difference between rate-and-term and cash-out?
- A rate-and-term refinance generally changes the rate, term, or structure without taking significant equity out. A cash-out refinance is designed to access equity as loan proceeds. Program definitions and limits vary.
- Can I refinance out of a bridge loan?
- Refinancing from short-term or bridge financing into longer-term DSCR financing may be possible on eligible properties, subject to property cash flow, value, and program guidelines.
Program details are general and for educational purposes only. This is not a commitment to lend, an offer, or specific loan terms. All programs are business-purpose investor loans subject to underwriting, property review, investor guidelines, and applicable law. Availability, eligibility, and terms vary by state and transaction. Simple DSCR is an assumed business name of WooHoo Mortgage LLC, NMLS #2347993.