The Quick Read: Usually the same amount as with a clean tenant, as long as the rent the lender counts still supports the larger loan. The plan does not add income, so cash is capped by the lower of the value limit and the rent limit, and the rent limit can bind first.
- Value limit: appraised value times a 75% cash-out LTV ceiling on a standard rental, minus the payoff and closing costs.
- Rent limit: the largest payment the counted rent can cover, with standard programs starting at a 1.00 coverage floor.
- Plan installments and back rent do not count as rent income.
- Seasoning of about 6 months from title recording applies regardless of tenant status.
- Gross proceeds are not net cash, because the payoff and costs come out first.
How Is the Cash Actually Calculated?
Net cash is the new loan amount minus the existing payoff minus closing costs. The new loan is capped by the lower of two tests.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Nov 5, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Nov 5, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Test one is value. Appraised value times the cash-out LTV ceiling gives the maximum loan. Across most of the wholesale network Lendmire works with, that ceiling is 75% on a standard rental. Short-term-rental collateral sits lower, at 70% on a cash-out.
Test two is rent. DSCR is monthly rent divided by the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. A bigger loan raises that obligation and lowers the ratio. So a file can pass the LTV test and fail the coverage test.
Here is a round-number illustration, using placeholder values only. A property appraises at $400,000 and the existing payoff is $200,000. At 75% LTV, the maximum loan is $300,000, which leaves $100,000 before closing costs. Costs come out of that figure, and the rent test may shrink it further. The calculator on this site can run an illustrative version of the same arithmetic.
Equity is not cash. The reducers are closing costs, any prepayment penalty on the old loan, escrows, and reserves the borrower must show.
Does the Repayment Plan Change the Number?
Not directly. A repayment plan is a record of a debt owed to the landlord. Lenders treat it as documentation of arrears, not as an income line. Lendmire’s piece How a Lender Reads a Tenant Repayment Plan on a Cash-Out Refinance covers that reading in detail.
The plan matters only through the rent test. Lenders typically credit the lower of the signed lease rent and the appraiser’s market rent. If deposits match the lease, the lease rent can be evidenced. If the tenant is months behind with no matching deposits, the lease rent is not proven. The lender may then use market rent, or drop the unit from the count.
That is how the plan shrinks cash. Lower counted rent supports a smaller payment, and a smaller payment supports a smaller loan.
Three things the plan does not do:
- It does not restart the seasoning clock. Seasoning comes from the program and ownership date.
- It does not lift a below-market lease up to market.
- It does not turn an above-market lease into extra coverage. The surplus is ignored.
How Does the Lender Classify the Tenant?
Think of five buckets: current, late but paying, in arrears, in eviction, or vacant. A tenant paying down a balance usually lands in arrears, now paying. A late-but-current tenant is mostly a documentation question. A tenant months behind is an income question. An eviction filing moves the property into transitional territory, where the lease may no longer support counted rent. A vacant unit has no lease income to document, so the file leans on the appraiser’s market rent estimate instead.
Each bucket changes what the file must prove. The cleanest files show:
- The signed lease.
- A rent ledger starting when the arrears began.
- Bank deposits that match the lease.
- The signed repayment plan.
- A short explanation letter.
The ledger must separate current rent from arrears payments. Mixing them blurs which dollars are rent.
Where Does the Appraisal Rent Come From?
On a single-family or condo rental, the appraiser documents market rent on Form 1007. McKissock, an appraiser-education provider, explains that the form estimates monthly market rent from comparable rentals, while the lender makes the final income determination. Form 1025 is the counterpart for 2-4 unit properties.
Those forms are named here only because they feed the rent test. DSCR loans follow their own program guidelines, not agency selling rules.
Clean Tenant, Plan Tenant, Below-Market Lease
| Scenario | Rent counted | Coverage effect | Cash effect |
|---|---|---|---|
| Clean tenant | Lower of lease or market | Full support | Value limit usually binds |
| Tenant on a plan, deposits match | Lease rent, if evidenced | Same as clean | Usually unchanged |
| Plan, no matching deposits | Market rent or unit dropped | Weaker | Rent limit may bind |
| Below-market lease | Lease rent | Lower ratio | Smaller supportable loan |
The pattern is simple. The plan is neutral when the paper trail is clean. It costs cash only when it weakens the rent evidence.
What Edge Cases Change the Answer?
Notice in the file. If the lease reads current but a nonpayment notice sits in the file, lenders see a credibility problem. That can hold up a file longer than the unpaid rent itself.
Multi-unit properties. One delinquent door among several may be absorbed by the rest. The rent roll should still show every tenant’s balance. Pooled cash-outs test combined value against combined rent.
Month-to-month tenants. Treatment varies by program, so confirm it before applying.
Vacant, rent-ready unit. Market rent applies cleanly. This is generally simpler to document than a non-paying tenant.
Short-term rentals. Form 1007 cannot document nightly rates. Fannie Mae’s appraiser update says appraisers should not multiply a nightly fee by 30. Appraisal firms such as Class Valuation use a separate income analysis instead. Across the network, short-term-rental cash-out leverage tops out at 70%, lower than the 75% on standard rentals. Programs typically want about 12 months of hosting history and a 640+ score, with a 1.00 coverage floor on refinances.
Rehab files. A property still under renovation is a poor fit for a long-term DSCR loan. Finish the work and stabilize the rent first.
What Else Limits the Cash?
Program rules sit on top of the tenant story. Most programs on the network want a score around 660, with a 620 floor in parts of the network and 700+ opening the strongest tiers. Reserves commonly run about 6 months of PITIA, stepping up to about 9 months on loans above $1,500,000, subject to lender guidelines. Standard programs go up to $3,000,000.
Not every property qualifies. Manufactured homes, log homes, and barndominiums are not offered through these DSCR programs.
Standard programs start at a minimum DSCR of 1.00. Coverage below 1.00 is available only through select lenders in the network, with leverage and terms adjusted. That is a separate path, not a lower floor on the same program. Expect a smaller loan, not a larger one.
Should You Take the Maximum?
Taking less cash is the usual fix when rent evidence is thin. Every added dollar of cash-out raises the obligation and thins coverage.
Clearing 1.00 also is not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation. A file that passes at the margin can still leave an owner with a property that barely pays for itself.
Three choices are worth weighing:
1. Cash out now. This fits best when recent deposits match the lease and the plan is being honored.
2. Cure the arrears first. Waiting until the balance is paid removes the question.
3. Re-lease at market rent. A fresh lease with a new tenant produces clean evidence, at the cost of vacancy time.
Prepayment penalties on the new loan are a cost to weigh as well, since DSCR loans commonly carry them in the early years. And the choice flips if reserves are thin. A delinquent-tenant file leans harder on liquid reserves, because reserves carry the property through a gap.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Key Terms Defined
DSCR: Monthly rent used for lender review divided by the full monthly obligation of principal, interest, taxes, insurance, and HOA dues.
LTV: The loan amount as a percentage of appraised value.
Seasoning: How long the borrower has owned the property before a cash-out, measured from title recording.
Arrears: Rent that was due and unpaid.
Form 1007: The appraiser’s schedule of monthly market rent for a one-unit rental.
Reserves: Liquid funds a borrower shows after closing, expressed in months of PITIA.
Frequently Asked Questions
Does a tenant repayment plan lower my cash-out amount?
Not by itself. The 75% LTV ceiling on a standard rental and the payoff set the value limit whatever the tenant’s status. The plan lowers cash only when it leaves the lease rent unproven, which shrinks the payment the rent can support. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Do plan installments count as rental income?
No. Installments repay a debt, so they do not add to the coverage numerator. Lenders count current rent, typically the lower of the lease and the appraiser’s market rent. Keep installments and current rent on separate ledger lines.
Is a lease required?
A signed lease is the usual evidence of rent. On an unleased property, a market rent schedule from the appraisal can stand in on many programs.
What documents should I assemble first?
Gather the lease, a rent ledger from the start of the arrears, matching bank deposits, the signed plan, and a short explanation letter. Add proof of liquid reserves. Clean paper is what keeps the lease rent counted.
When does it make sense to skip the cash-out?
Skip it when the larger payment would sit close to the rent, or when the tenant’s history is still unsettled. Curing the arrears or re-leasing first is often the cleaner path. Approval is always subject to lender guidelines and property review.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. The complete DSCR loans guide covers the full program picture. Reach the team at 828-256-2183, or request a quote through the Lendmire site.
Program terms vary by lender and change over time, and nothing here is a commitment to lend.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. McKissock
2. Fannie Mae Appraiser Update
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Cash Comes Out of a DSCR Cash-Out Refinance to Scale a 2-10 Door Portfolio? · How Much Cash Comes Out of a Short-Term Rental Cash-Out Refinance to Buy Out an Ex-Spouse? · How Much DSCR Cash-Out Releases on a Rented Rehab
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.