Exiting Hard Money Loan

Houston, Texas
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Exiting Hard Money Loan

Caleb Hardesty
Beaumont, TX · Member since 2022 · 3 posts · 7 votes

Hey all,

I’ve got a single-family in Texas that I bought with hard money and the rehab is done.

Looking to move it into a long-term DSCR loan and trying to get a feel for what’s actually doable right now.

Curious what people are seeing for:

•  75% or 80% LTV on a refi out of hard money — is 80% realistic or is 75% more the norm?

•  Seasoning — how long do most lenders want you on title before they’ll use the full appraised value instead of what you have into it?

•  Do you need a lease in place, or will most lenders go off the appraisal’s market rent?

•  Rates, points, and prepay penalties on a 30-year fixed at those LTVs? Any big difference between just paying off the hard money vs. cashing out a little?

Credit’s around 730. Just trying to get a realistic picture of what to expect so I know what to look for when I start talking to lenders.

Anyone who’s done a hard money to DSCR refi recently (especially in Texas) — what kind of terms did you end up with?

Any recommendations for Texas lenders?

Appreciate any input. Thanks.

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Judith Chime
Virtual Assistant · Member since 2026 · 23 posts · 6 votes
6d

Thanks Caleb, that helps At 2 months, a lot of lenders will base the loan on your purchase plus rehab cost rather than the $160K ARV, but some have shorter seasoning rules, so it's worth comparing a few. Also, most DSCR lenders will qualify you on the long-term rent ($1,500) rather than the furnished income until you have some rental history.

Our team compares multiple DSCR lenders, so we could look at whether refinancing now or waiting a few months gets you the better result. I sent you a colleague request, so feel free to message me.

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  • Judith Chime
    Virtual Assistant · Member since 2026 · 23 posts · 6 votes
    6d

    Hi Caleb, congrats on finishing the rehab Full disclosure, I work with a loan brokerage, so I see a lot of these refis.

    A few things that usually matter:

    - Seasoning: many DSCR lenders want you to own it 3–6 months before they'll use the new appraised value instead of your purchase plus rehab cost.

    - LTV: 75% is more common; 80% usually needs strong credit and a DSCR above 1.0.

    - Rent: many lenders will use the appraiser's market rent if there's no lease, but some lower the LTV when it's vacant.

    When did you buy it, and what are you expecting for the ARV and rent? That will tell you pretty quickly which option fits.

    0Reply
    • Caleb Hardesty
      OP
      Beaumont, TX · Member since 2022 · 3 posts · 7 votes
      6d

      Hello Judith,

      We purchased end of August, so we are only 2 months in.. I guess we were expecting to rehab and refinance out as soon as we were done.

      Expecting an ARV of 160k and roughly 1500/month on long term rental. Although we are aiming to do 30 night stays, fully furnished all bills included @ ~3k. The house is in a heavy Industrial area with a lot of travelers temporarily here for work.

      1Reply
    • Judith Chime
      Virtual Assistant · Member since 2026 · 23 posts · 6 votes
      6d

      Thanks Caleb, that helps At 2 months, a lot of lenders will base the loan on your purchase plus rehab cost rather than the $160K ARV, but some have shorter seasoning rules, so it's worth comparing a few. Also, most DSCR lenders will qualify you on the long-term rent ($1,500) rather than the furnished income until you have some rental history.

      Our team compares multiple DSCR lenders, so we could look at whether refinancing now or waiting a few months gets you the better result. I sent you a colleague request, so feel free to message me.

      1Reply
  • Tyler MccleanPro Member
    Investor · Nassau County, NY · Member since 2022 · 100 posts · 26 votes
    6d

    Hey Caleb, so I’ll go down the list. You can get up to 80ltv but the rate is considerably better and there are a lot more options if you go 75ltv.

    A lot of banks require a 6 month seasoning period, but do to lending business slowing there are a lot more eliminating the seasoning requirements.

    You do not need a lease in place, but it can help if you have one and the market rents come in lower than desired on the appraisal.

    You do get a slightly better rate going rate and term compared to going cashout. It really all depends on the specific scenario. The rate more so gets impacted by LTV. If you go into a higher LTV bracket that would impact the rate much more. It's typically windows of 5LTV

    (60-65)(65-70)(70-75) so on and so forth.

    730 fico is great, rates unfortunately not the best right now. I’ve been suggesting clients take a lower prepay so you have the ability to refi in a year or two, when hopefully rates are better.

    Dm me if you have any questions, I’d be more than happy to personally go over your scenario and give you real, accurate options!

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  • Cormac McCarthyBusiness Member
    Lender · Santa Monica, CA · Member since 2026 · 6 posts · 1 vote
    6d

    Hey Caleb,

    For LTV 80% is definitely realistic but it is the cap for almost every lender when it comes to a DSCR refi. If you drop down to 75% you may see a pretty significant drop in rate, around or above half a point.

    For seasoning most lenders will want to see 6 months, but it’s possible to get by with less and some lenders will accept an exception request for less seasoning.

    The majority of lenders will go based off the market rent and will not require a lease. Some lenders will even allow you to use market rent even if you have a lease in place, if market rent is higher than your lease.

    With your credit score and no prepayment penalty you'd like see something in the high 7's to low 8's for rate. If you wanted to put a 3 or 5 year prepay you could probably get down into low 7's or maybe even high 6. I typically charge 2 points on a DSCR.

    The main difference with a rate and term and cashout refi will come from the difference in LTV and the DSCR ratio.

    If you want to message me with the zip code, estimated value, estimated market rent, and desired LTV id be happy to price out scenarios and play with the variables you're asking about to give you an accurate idea of what your options look like.

    [email protected]310-963-2980
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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    6d

    @Caleb Hardesty

    With respect to Texas, I will do my research work properly and find three DSCR lenders since the reason is that there might be a little bit of variance regarding LTV, seasoning, and lease requirement on the basis of the program. In the case of having a very good credit score of 730 with the completion of renovation, you can begin your search.

    Good luck!

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  • Nyisha Walton
    Lender · Houston, TX · Member since 2026 · 108 posts · 34 votes
    6d

    Caleb, nice work getting the rehab done, that's the hard part. Moving rentals from hard money into DSCR is what I do every day, and I work with a network of DSCR lenders, so if I'm not the right fit I can get you to someone who is. Seasoning is usually the big swing factor, since many lenders use the new appraised value only after you've been on title a few months, so check your purchase date before you pick a lender. Message me your purchase price, rehab cost, and expected rent and I'll help you figure out the best path.

    0Reply
  • Ryan BakerBusiness Member
    Lender · Strongsville / Cleveland, OH · Member since 2026 · 111 posts · 29 votes
    6d

    Caleb, nice work getting the rehab done. A few things that usually matter on a DSCR exit from hard money. Most DSCR programs cap a cash-out refi around 75% of appraised value, and some go higher on a rate-and-term refi that just pays off the hard money balance. Seasoning varies a lot by lender: some will use the new appraised value after as little as 3 months of ownership, others want 6 to 12, so ask that question first. On the lease, many DSCR lenders will use market rent from the appraiser's rent schedule if the house is vacant, but furnished 30-day income usually needs a track record before it counts, so plan to qualify on the roughly $1,500 long-term rent. With a $160k ARV your loan is on the smaller side, so also check each lender's minimum loan amount and how points work at that size. Happy to walk through the numbers on a quick call, my direct line and email are on my profile.

    (Drafted with AI assistance.)

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 891 votes
    6d

    I'd talk to several lenders and compare the whole loan, not just the rate. LTV and seasoning can vary quite a bit, and I'd specifically ask how they treat the new appraised value versus your cost basis, whether they require a lease or will use market rent, and what the prepay and points look like. I'd also compare the loan just to pay off the hard money versus taking cash out. Pulling money out can be great, but only if the property still has plenty of cash flow after the new debt service. The lower rate isn't necessarily the best loan if the prepay or other terms are restrictive. With a 730 credit score and a completed rehab, I'd definitely shop this around before committing. Even a small difference in LTV, points or prepayment terms can make a pretty big difference over the life of the loan.

    0Reply
  • Justine Sanchez
    Member since 2020 · 21 posts · 3 votes
    6d

    Hi Caleb, congrats on getting the rehab finished in Beaumont. Since you're only about two months on title, I'd ask each lender up front how they handle seasoning, because some will size off the $160K appraisal while others stick to your purchase plus rehab cost until you've owned it longer. For the DSCR math, plan on the payment being covered by the roughly $1,500 long-term market rent, since the furnished 30-night income usually can't be counted until there's some operating history behind it. Also check your hard money maturity date so you know how much runway you have if the refi takes longer to line up, and have your rehab receipts, the appraisal and a payoff statement ready. Are you leaning toward waiting out the seasoning, or do you need out of the hard money sooner?

    0Reply
  • Joe Piccirello
    Lender · Peoria, AZ · Member since 2026 · 36 posts · 11 votes
    6d

    Hey Caleb, congrats on wrapping up the rehab!

    With a 730 credit score, you've potentially got some good DSCR options. One thing I'd look at closely is whether your refinance can be structured as a rate-and-term rather than cash-out.

    If you're simply paying off the existing hard money loan, without pulling additional equity out, some lenders may treat that as a rate-and-term refinance, potentially allowing up to 80% LTV.

    If you're looking to pull additional cash out beyond the hard money payoff and allowable closing costs, it would generally be considered a cash-out refinance, where 75% LTV may be the maximum with certain lenders.

    The other big factors are seasoning, whether the lender will use the current appraised value versus your original cost plus improvements, and whether they’ll qualify the property using market rent if it’s not leased yet.

    I work with several DSCR lenders, and their guidelines can vary quite a bit on these details.

    Happy to help you compare options and figure out which structure makes the most sense.

    How long have you owned the property, and are you just looking to pay off the hard money or pull some equity out as well?

    0Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    6d

    Caleb, you're asking the right questions before talking to lenders. I'd definitely get a few quotes rather than anchoring yourself to a specific LTV or rate until you see what your property actually qualifies for.

    One tax item I'd add: since you originally bought this with hard money and rehabbed it, I'd have your CPA look at how you originally intended to use the property before you simply treat the refinance and rental conversion as a normal long-term hold.

    The refinance itself isn't a taxable sale, but I'd keep the new loan proceeds, interest, points, and any cash-out completely traceable, especially if you're using the funds for additional investments.

    And if this property was originally intended as a flip but you're now changing course and holding it as a rental, that's something I'd want documented and reviewed before the next step.

    Feel free to DM me, I’d be happy to send over a few resources that might be helpful.

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  • Michele Balady
    Dallas · Member since 2026 · 14 posts · 9 votes
    5d

    That's an interesting situation, especially with the rehab already completed.

    I think the biggest things to establish upfront are the lender's seasoning requirements and whether they're treating the transaction as a rate-and-term refinance or a cash-out refinance. Those distinctions can make a significant difference in the available LTV and overall terms.

    I'd also be interested in how the property is being evaluated for DSCR purposes. Some lenders may accept market rent from the appraisal, while others may require an executed lease.

    With a 730 credit score, you should have a reasonable starting point, but I'd compare multiple lenders rather than focus solely on the advertised interest rate. Points, prepayment penalties, and cash-out restrictions can change the economics considerably.

    Have you already received any quotes from DSCR lenders, or are you just beginning the process?

    0Reply
  • Muyees Ayilara
    Lender · Boynton Beach, FL · Member since 2026 · 162 posts · 68 votes
    5d

    Hey Caleb — just did hard money to DSCR refi in Florida on a similar single family BRRRR, so sharing what I am seeing right now for 730 credit like yours:

    LTV: 75% is the norm for cash out on appraised value. 80% is possible but you will see pricing hit and DSCR needs to be strong, usually 1.25+ and many lenders will require lease in place for 80%. For 75% most will go off market rent at 75% of that, lease not always required.

    Seasoning: Most DSCR lenders I talked to will use full appraised value after 3 months on title if you can document rehab with before/after photos and HUD. Some will do 0 to 3 months but cap at purchase plus rehab documented. For rate and term with no cash out, seasoning is easier. If you want cash out above what you have into it, expect 3 to 6 months.

    Lease: For 75% LTV you can often close with market rent only. For 80% or if you want max rent credit, they want executed lease. I closed one with market rent at 75% LTV, no lease, but had to show rent comps leased in last 6 months within half mile.

    Rates and terms today: For 730 credit and single family, I am seeing 7.5% to 8.25% for 30 year fixed, 1 to 2 points, prepay usually 3-2-1 or 5-4-3-2-1 options. Paying hard money off with no extra cash out vs small cash out is usually same rate if DSCR holds. Big difference is if you go over 75% LTV or DSCR drops under 1.0, then rate jumps 0.5 to 1%.

    Tips that helped me: Have GC invoices, final photos, insurance binder with new coverage, and rent comps ready before you call lenders. That cut my approval time from 2 weeks to 5 days.

    What ARV and rent are you expecting on the Houston one?

    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 525 votes
    5d

    There are more options the longer you have had the property as seasoning or time between transactions impacts how many DSCR loan options you will have to use the new appraised value for the LTV.

    75% LTV for a cash out is more realistic if you have had the property for less time such as less than 6 months from the last transaction. 80% LTV on a cash out is possible if you have had the property for at least 6 months but generally for programs it will make the rate go up.

    For some DSCR lenders you don't need a lease in place and they will go off of market rents from the appraisal form but for some lenders not having it rented will affect LTV.

    In general, for a DSCR loan, the longer the prepayment penalty will have a positive impact on the rate and a shorter prepayment penalty will have a negative one. For example for a borrower with the same credit score, getting a 3 year prepayment penalty will have a more positive impact on the rate compared to a one year prepayment penalty.

    DSCR loan programs vary much more than conventional loan programs since the DSCR lender programs and details are DSCR lender specific even though there is often some overlap. Working with a mortgage broker that specializes in DSCR loans can be helpful since an experienced mortgage broker who specializes in DSCR loans can help you find DSCR loan options from lenders that don't advertise directly to the public Also since DSCR loans are not regulated the same way as owner occupy loans, rate and terms can go up all the way until the day of funding even if nothing has changed on the loan such as the appraisal coming back lower and that affecting LTV. Since those changes can cost an investor thousands of dollars, it's important to work with a well researched mortgage professional you feel comfortable with to avoid that from happening. Happy to connect to discuss further.

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  • Connor MaynerBusiness Member
    Lender · Sarasota, FL · Member since 2026 · 10 posts · 3 votes
    5d

    Caleb, congrats on getting the rehab done! We have DSCR cash-out refi options at 80% LTV, no seasoning required, and we can qualify on either the lease or market rent.

    I own Ocean Coast Mortgage, a brokerage that arranges business-purpose investment loans. I can send you a quote sheet showing all your options across different prepay structures. Let's connect and set up a quick call.

    Connor

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5d

    What the challenge will be is the 80% LTV even qualify for a DSCR based on the rental rate. That will be the challenge right now is making those numbers work, and if they do, do you have the buffer to cover misc expenses. We buy non performing loans and the number of DSCR loans we are seeing that were 80% levered with low DSCR ratios is substantial right now because borrowers did not have adequate reserves.

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  • Christian Duncan
    Member since 2026 · 2 posts · 1 vote
    5d

    Nice work getting the rehab done fast. Good news on the seasoning worry: we have DSCR options with no seasoning requirement, so at 2 months in you don't have to sit on the hard money waiting for month 6. There are also ways to pull cash out on a refi like this without it being treated as a cash-out, which can help on LTV and pricing. Happy to walk you through how that works on your numbers.

    — Christian, Epic Capital (business-purpose investor loans)

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  • Simon W.Business Member
    Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 691 votes
    5d

    Good question. Before you pick between 75% and 80%, run the cash left in the deal both ways. On a $160,000 ARV, 75% is $120,000 and 80% is $128,000, so that's an $8,000 swing. If your hard money payoff is around $125,000, the 75% loan leaves you about $5,000 short before refi closing costs, and the 80% loan might cover it.

    Also count the refi costs. If the new loan costs about $4,000 to close, that usually gets spread over the life of the loan, so about $133 a year on a 30 year note. It's small, but the whole amount comes due in cash at closing, so it belongs in your cash-left-in number.

    Keep the hard money points, interest, and rehab costs by property from day one. The rehab and holding costs usually go into the property's basis and the refi costs get amortized, so you want a clean file when your CPA asks. A slightly higher rate can still win if it gets more of your cash back out.

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  • Apurva Sanghavi
    Lender · Houston, TX · Member since 2019 · 8 posts · 1 vote
    5d

    Caleb, congrats on getting the rehab wrapped. A few things to add from the Houston side:

    Seasoning: at 2–3 months, a lot of DSCR lenders will size the loan off the lower of the appraised value or your purchase plus documented rehab. A few will go off the full appraised value with little or no seasoning, so it's worth shopping before you sit on hard money interest waiting. Either way, keep your receipts and draw records organized.

    LTV: 75% is the common cash-out cap. 80% exists but usually needs stronger credit and a DSCR comfortably above 1.0. On a ~$160K value, also check each lender's minimum loan amount, since some won't go that small.

    Rent: for a long-term rental, many lenders use the lower of the lease or the appraiser's market rent, and some will take the market rent alone if it's vacant. The furnished 30-night plan is a different underwrite. Many lenders want a track record or will discount projected income, so decide before the appraisal which rent story you're telling.

    Prepay: step-down structures like 3-2-1 or 5-year are common, and you can usually shorten them by trading rate. If you might sell or refi again soon, price that out before you lock.

    Happy to compare notes. We shop 150+ lenders, and a few have short-seasoning DSCR programs built for exactly this situation.

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    5d

    Hi Caleb - 80% is doable for sure if its just paying off the hard money plus closing costs, since most DSCR Lenders will treat that as a rate/term refi, but once you're taking any real cash out you're generally looking at 75% max. Seasoning is the big one - a lot of lenders want ~6 months on title before they'll use the full appraised value, though theres plenty that will go off the new value sooner if you can document the rehab (receipts, invoices, before/after photos), otherwise they'll cap you at what you have into it. On the lease, most will use the appraiser's market rent (the "1007") but some will knock your max LTV down a bit if its vacant on a refi, so getting a tenant in before you close definitely helps. Rates and points really come down to the prepay you pick - a 5 year prepay is going to price the best and a 0-1 year will cost you in rate or points, and at a 730 score the jump from 75% to 80% usually isn't huge. Whats your all-in vs what you're expecting it to appraise at?

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  • Ty Burns
    Lender · Salt Lake City, UT · Member since 2013 · 146 posts · 21 votes
    5d

    Caleb, I've been on both sides of this one. I flip and BRRRR here in Utah and I also do DSCR loans, so here's how it usually shakes out.

    80% is doable on some programs but it's usually rate and term only, meaning you're basically just paying off the hard money plus closing costs. Once you take actual cash out most lenders cap you at 75%. So the payoff vs a little cash out question matters more than people think.

    Seasoning is the bigger issue at 2 months. A lot of DSCR lenders will only use the new appraised value after 6 months of ownership. Before that some will still do it but they'll cap you off purchase price plus whatever rehab you can document, so keep every receipt and invoice. A few will use appraised value at 3 months, they're just pickier.

    On the lease, for a refi most want a signed lease in place. Some will go off the appraiser's market rent if it's vacant but they usually knock the LTV down 5% for it. Get it rented before you apply if you can, it makes everything easier.

    At $160k ARV your loan is going to land around $120k, so watch for lender minimums. Some won't touch anything that small and the ones that do sometimes price it a bit higher. Prepay is your main lever on pricing, a longer prepay usually gets you a better rate, so just pick one that matches how long you actually plan to hold.

    Happy to run your numbers if you want, just shoot me a message.

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  • Logan LambertPro Member
    Member since 2026 · 15 posts · 7 votes
    5d

    Some great questions here! A lot of this really depends on the lender and the loan structure.

    You can typically go up to 80% LTV on a rate-and-term refinance, allowing you to pay off the existing hard money loan and cover closing costs. If you only need 75% LTV, you can often get a better interest rate than you would at higher leverage or with a cash-out refinance.

    Seasoning requirements vary across the board. Some lenders require no seasoning for rate-and-term, others require three months for cash-out, and some offer cash-out options with no seasoning at all.

    In most cases, you won’t need a lease in place, as lenders can use the appraiser’s market rent. Rates are generally floating in the 7% range, with around two points being fairly common. Most programs offer 30-year fixed terms, with prepayment penalties depending on the loan structure.

    I’ve worked with investors in Texas, and one thing I’d strongly recommend is actually getting on the phone with the lender you’re considering. Unfortunately, some lenders will just send over terms in an email without asking the important questions upfront.

    A quick conversation can make a huge difference in understanding your situation, getting you the best available terms, and making sure the loan goes smoothly without surprises.

    I’m a lender based in Baltimore, but I lend nationwide. If you have any questions or want to compare options, I’d be more than happy to jump on a call and help you out!

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  • Tommy Deguchi
    Member since 2026 · 62 posts · 3 votes
    5d

    Caleb, I got out of a hard money loan on a rehab this year with about the same time on title. My guy ran it DSCR off the new appraised value, no seasoning wait, while everyone else quoted me 3-6 months. He underwrites off the higher of market rent or the lease so it cash flows, and no reserves needed. On your $160K value the loan lands around $120K, that is the 75% cap for loans this size. DM me if you want his info.

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  • J CastroBusiness Member
    Lender · Florida · Member since 2025 · 765 posts · 267 votes
    5d
    Quote from @Caleb Hardesty:

    Hey all,

    I’ve got a single-family in Texas that I bought with hard money and the rehab is done.

    Looking to move it into a long-term DSCR loan and trying to get a feel for what’s actually doable right now.

    Curious what people are seeing for:

    •  75% or 80% LTV on a refi out of hard money — is 80% realistic or is 75% more the norm?

    •  Seasoning — how long do most lenders want you on title before they’ll use the full appraised value instead of what you have into it?

    •  Do you need a lease in place, or will most lenders go off the appraisal’s market rent?

    •  Rates, points, and prepay penalties on a 30-year fixed at those LTVs? Any big difference between just paying off the hard money vs. cashing out a little?

    Credit’s around 730. Just trying to get a realistic picture of what to expect so I know what to look for when I start talking to lenders.

    Anyone who’s done a hard money to DSCR refi recently (especially in Texas) — what kind of terms did you end up with?

    Any recommendations for Texas lenders?

    Appreciate any input. Thanks.

    Hey @Caleb Hardesty welcome to BP!
    Congratulations on completing the rehab! Moving from hard money into a long-term DSCR loan is a strategy we work with investors on regularly.

    From a lending perspective, several factors will determine how much leverage you can obtain and what terms may be available:

    • LTV: 75% LTV is generally a more realistic starting point for many DSCR refinance scenarios. 80% may be possible depending on the program, property, borrower qualifications, and transaction structure.

    • Seasoning: Requirements vary by lender and program. Some programs may allow the use of the current appraised value with limited seasoning, while others have specific title-holding requirements.

    • Rental Income: Depending on the program, lenders may accept market rent supported by the appraisal, while others may require an executed lease.

    • Rates and Terms: Interest rates, points, and prepayment penalties depend on the requested LTV, DSCR, credit profile, property type, and whether the transaction is rate-and-term or cash-out.

    With a 730 FICO and a completed renovation, you may have some attractive options worth exploring.

    We offer DSCR financing for qualified real estate investors, including rate-and-term and cash-out refinance options. Our goal is to structure financing around the property's rental income and the investor's long-term strategy, without relying solely on traditional personal income documentation.

    I'd be happy to review the numbers and see what we may be able to offer. Feel free to DM me with the property address, estimated appraised value, current hard-money payoff, and projected monthly rental income.

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  • Stephen Foster
    Member since 2026 · 21 posts · 5 votes
    4d

    Caleb, full disclosure, I'm a mortgage broker. A few things specific to your setup: most DSCR lenders size the loan on the appraiser's long-term rent (~$1,500), not furnished income, until you have 12 months of history, so decide which way you want to be underwritten before ordering the appraisal. At 2 months owned, ask each lender whether they use appraised value or cost basis, and whether rehab receipts count. Since it isn't your homestead, Texas cash-out restrictions generally don't apply, but get the lender to confirm in writing. Compare prepay terms and vacant-refi rules, and work back from your hard money maturity date. Congrats on finishing the rehab.

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  • Roberto Garza
    Lender · U.S. · Member since 2026 · 2 posts · 0 votes
    4d

    Caleb, I arrange commercial and investor financing in Texas, including DSCR refinances out of hard money. Here is what I see generally. Pricing moves with the market, so treat these as structure, not quotes.

    LTV: At 730 credit, 75% is the norm and 80% is possible with some lenders on a rate-and-term refi. Cash-out usually drops to 70% to 75%. The DSCR matters too: at 1.0 or better you get the best leverage, and below 1.0 lenders cut LTV or add pricing.

    Seasoning: This varies the most. Many lenders use the lesser of the appraised value or your total cost basis (purchase plus documented rehab) until you have been on title 6 to 12 months. After that, most will use appraised value. Some lenders will use appraised value sooner, so ask each one for its seasoning rule before you apply.

    Lease: Most lenders want a signed lease on an occupied property. If it is vacant, many will use the market rent from the appraisal's rent schedule, but expect slightly lower leverage or tighter terms. A lease in place is cleaner.

    Pricing: Expect a rate meaningfully above conventional, and a prepayment penalty, most often a 3-year or 5-year step-down. A lower rate often comes with a longer or stricter prepay. Paying off the hard money only is priced better than cashing out, because cash-out lowers leverage and adds risk.

    For consideration: seasoning rule, DSCR minimum, cash-out limit, and prepay structure. I'm happy to share what I'm seeing if you send me a message.

    With Purpose,

    Roberto

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