The Quick Read: Which provider fits you depends less on a ranked list than on three tests: whether the appraised value supports enough loan to pay off your bridge and costs, whether the property’s rent covers the new payment, and whether you have passed the seasoning period the program requires. Lendmire is a mortgage broker, so it does not rank lenders. It shops a wholesale network and matches your file to the program that fits.
- The lender’s appraisal sets value. Your projected after-repair value does not.
- On a hard money cash-out refinance of a non-owner-occupied 1-4 unit property, the loan typically reaches up to 65% of value. Terms are 6-18 months, interest-only.
- On a DSCR cash-out refinance of a standard long-term rental, leverage generally tops out around 75% LTV, and about 6 months of seasoning is the common expectation.
- Your bridge payoff and costs come out first. Only what is left returns to you.
- Every figure here varies by lender, property, and experience. Nothing is a commitment to lend.
Key Terms Defined
Hard money loan: a short-term, interest-only loan secured by the property. It is underwritten on the property, the plan, and the exit.
Bridge: the hard money loan that carries you from purchase and rehab to a longer-term refinance.
After-repair value (ARV): what the property should be worth once the work is done. The lender’s appraiser decides the number that counts.
LTV (loan-to-value): the loan amount divided by the appraised value.
Loan-to-cost: the loan amount divided by what the project costs, meaning price plus documented rehab.
Seasoning: the waiting period before a lender sizes your loan on appraised value instead of what you paid.
Cost basis: your purchase price plus documented rehab spending.
Payoff-only refinance: a refinance that repays the bridge and costs and returns no cash.
DSCR (debt service coverage ratio): monthly rent divided by the full monthly housing payment.
PITIA: principal, interest, taxes, insurance, and any association dues. It is the payment DSCR measures against.
What Does a Cash-Out Refinance Actually Do to a Hard Money Loan?
It replaces the bridge with a new loan sized on what the property is now worth. The new loan pays off the bridge, covers closing costs, and sends any remainder to you. That remainder is how you pull your original investment back out.
Start with how much of your own cash went in. Across the network, fix-and-flip hard money typically funds 85% to 93% of project cost, depending on how many projects you have completed. Every tier is capped at 75% of after-repair value. Bridge purchases without rehab run up to 80% of the purchase price. Up to 100% of the rehab budget can fund in draws against completed work.
So your cash in is roughly what the bridge did not cover, plus carry and fees. Getting it back means the next loan must exceed the bridge balance and costs by at least that much. That is a sizing question, and the next section shows the two tests that answer it.
The Two Tests: Value and Rent Coverage
Either test can cap the loan. The first is value: the loan-to-value cap applied to the appraisal. The second is rent coverage: how well the property’s rent covers the new payment.
A cash-out takes a bigger loan than a payoff-only refinance, so coverage gets tighter. Addicted2Success makes the same point: pulling cash out raises the mortgage, and a bigger mortgage eats cash flow. It also warns that high-price, low-rent areas can turn a rehab-and-refinance into negative cash flow.
The long-term DSCR math is simple. Divide monthly rent by monthly PITIA. A result of 1.00 means rent matches the payment. Many select programs start at 1.00, and stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
Clearing 1.00 is not positive cash flow. Repairs, vacancy, management, utilities, and capital expenses all sit outside the calculation. Budget for them separately.
A bigger down payment can lower the payment and lift the ratio. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests, enough equity and enough rental coverage.
How Underwriting Treats the Refinance, Step by Step
Underwriting sizes the loan on the lender’s appraisal and the property’s rent. It does not size it on your projections. Here is the usual path.
1. Buy and rehab on the bridge. AirDNA describes hard money as short-term funding for purchase and rehab, with terms that push you to refinance. On this network’s hard money program, terms run 6-18 months, interest-only, with no prepayment penalty.
2. Put the property in service. Lenders want proof of rental income. That usually means a signed lease and verified deposit. Have the itemized list of improvements ready too, because the appraiser needs it.
3. Clear seasoning. Until the clock runs, many lenders size on cost basis. After it runs, they size on appraised value.
4. Get the appraisal. For a single-unit rental, the appraiser typically uses the 1004 value form plus the 1007 rent schedule. A 2-4 unit property uses the 1025.
5. Run both tests. The lender applies its LTV cap to the appraisal and checks rent coverage against the new payment. The smaller result sets the loan.
6. Pay off through title. The new loan repays the bridge at closing.
7. Receive what is left. Proceeds after payoff and costs come back to you.
Market surveys report that many lenders want 6-12 months of seasoning and allow 75-80% of new appraised value (AirDNA). In Lendmire’s network, a DSCR cash-out on a standard rental generally tops out around 75% LTV. About 6 months of seasoning is the common expectation, and it can vary by lender.
The Break-Even Math
Divide your bridge payoff plus costs by the LTV cap. The answer is the appraisal you need to get your money out.
These are modeled assumptions on an index scale, not market data. Say your payoff plus closing costs equal 70, and the property appraises at 100.
- At a 75% cap, the loan is 75. You clear the payoff and costs and take 5 back.
- At a 65% cap, the loan is 65. You come up 5 short and bring cash to closing.
Reverse it. At a 75% cap, a payoff-plus-costs figure of 70 needs an appraisal of about 93.3, since 70 ÷ 0.75 is 93.3. At a 65% cap, the same 70 needs about 107.7.
Now take an investor who funded most of the project on the bridge. Payoff plus costs of 90 needs an appraisal of 120 at a 75% cap. That is a big value jump from cost. A full recovery is not always realistic. A partial recycle is common, so it makes sense to test the refinance against a conservative appraisal before you buy.
Which Providers Fit Which Situation?
The best program for your situation depends on the property, your credit profile, how much leverage you need, and where you are in seasoning. Lendmire does not name or rank lenders. Here is how the provider types map to investor situations.
| Your situation | Program type that tends to fit |
|---|---|
| Bridge due soon, value proven | Hard money cash-out, up to 65% of value |
| Stabilized rental, rent covers payment | DSCR cash-out, around 75% LTV |
| Rent below payment | Select-lender sub-1.00 path, terms adjusted |
| Short-term rental collateral | STR cash-out, 70% LTV, 640+ score |
| Want longer terms | Select lenders: 40-year, interest-only, ARM |
A few notes on the table. For DSCR on standard rentals, a 620 credit floor exists in parts of the network, and most programs want around 660. A 700+ score unlocks the strongest leverage tiers. Hard money requires a 620 minimum, with additional conditions below 660. Because hard money stays asset-based, underwriting looks at the property, the plan, and the exit rather than rent coverage.
Short-term rental refinances expect about 12 months of hosting history and a 1.00 coverage floor. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Loan sizes on DSCR files run up to $3,000,000 on standard programs, with smaller balances available through select lenders. Hard money goes up to $5,000,000, larger by exception. Above $2,500,000 on DSCR, the network generally holds to 30-year fixed structures.
Ask every provider the same questions:
- Does the loan size on appraised value or cost basis, and when does that switch?
- How many months of seasoning does the program expect?
- What reserves apply at your loan size and leverage? On DSCR files they commonly run around 6 months of PITIA. Conservative rate-term files at modest leverage under $1,500,000 can see them waived, and larger loans typically step up to about 9 months.
- Are there prepayment terms?
- Is the property type eligible?
On that last one, DSCR loans are not offered on manufactured homes (single- or double-wide), log homes, or barndominiums. Hard money is for non-owner-occupied residential property of 1-4 units.
Where the Standard Path Breaks
Several situations change the answer. Know them before you plan your exit.
Delayed financing will not rescue a hard money purchase. That agency-style rule is built for all-cash buyers. A hard money purchase carries a lien, so it was financed. Even where a similar structure exists, it recovers documented cost, not post-rehab value.
Your bridge matures before seasoning ends. AirDNA notes that seasoning varies and some lenders waive it. If yours does not, your options are asking about an extension, a payoff-only refinance, bringing cash to closing, or starting with a longer bridge. Hard money here runs up to 18 months, so plan the clock before you buy.
Payoff-only becomes cash-out. The label flips the moment proceeds exceed payoff and costs. A payoff-only refinance generally carries less seasoning friction, but your equity stays in the property.
You bought with cash. Some lenders will refinance a cash purchase on cost basis, which is a different path from the appraised-value path. Confirm how the specific lender treats it.
You move the deed into an LLC. A title change after purchase can trigger a title review with some lenders. That is subject to lender program eligibility, so ask before you retitle.
Your property is a short-term rental. The collateral type changes the leverage and the history requirements, as the table shows.
What Delays Cost You
Carry cost is the hidden variable. Bridge interest keeps accruing while you wait on seasoning or the appraisal. PropertyReach notes that a deal needing a long wait on hard money may not pencil out.
The timeline is never fully yours. Seasoning rules, appraisal scheduling, and lender policy all sit outside your control. Build slack into your hold period.
Leaving capital behind also compounds. If every deal strands some of your money, your buying power shrinks with each project. A weak appraisal limits the next purchase as much as this one.
Common Misconceptions
I will get 75% of my ARV. The appraisal governs. On hard money cash-out the cap is lower than that anyway.
Seasoning is a federal rule. It is lender or program policy. It differs by lender, and some waive it.
A perfect deal leaves $0 in. Cash-out math depends on your all-in cost against the loan cap, so even a well-run project may leave some money in. A partial recycle is common.
A business-purpose checkbox is enough. Lenders want supporting documentation, which the next section covers.
What to Gather Before You Apply
Prepare a signed lease and deposit verification. Add an itemized list of completed improvements for the appraiser and the bridge payoff statement. Have entity documents ready if the property is held in an LLC, subject to program terms.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The OCC’s Truth in Lending handbook treats credit extended primarily for business purposes as exempt from Regulation Z. The CFPB’s exam procedures add that a checked box alone, without supporting documentation, may be insufficient evidence.
The Exit After the Exit: Long-Term DSCR Financing
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized. Lendmire brokers that path across 41 markets, including Washington, D.C. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
The structure matters for your recovery math. A DSCR cash-out refinance on a standard rental is sized against the property’s value, while hard money is typically sized against project cost, with any cash-out capped at a lower share of value. That difference in how the two loans are sized is often the gap between getting your capital back and leaving some behind.
The spine of most DSCR programs is the 30-year fixed. Select lenders in the network offer 40-year terms and interest-only periods, and ARM structures exist for investors who want them. For a fuller picture, read the complete DSCR loans guide.
Frequently Asked Questions
Can I get all of my original investment back?
It depends on the appraisal and your all-in cost. Full recovery requires a loan large enough to cover the bridge payoff, costs, and your cash in. Partial recycling is common, and a thin value gap may mean bringing cash to closing.
Is seasoning a legal requirement?
No. Seasoning is lender or program policy. It varies, and some lenders waive it. On DSCR cash-outs in Lendmire’s network, about 6 months is the common expectation.
Does hard money require rental income to cash out?
Hard money reviews the property, the plan, and the exit, not rent coverage. Long-term DSCR financing adds the rent test, so plan your stabilization before the bridge ends.
Which hard money cash-out provider is best?
The best provider depends on your property type, credit profile, leverage need, and documentation. A broker that shops multiple wholesale lenders can match the scenario to the program. Terms vary by lender, property, and experience.
What if the appraisal comes in low?
The loan shrinks with the value. You may take less cash out, bring cash to closing, or wait and reappraise. Testing the deal against a conservative value before you buy reduces this risk.
Next Step
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Reach the team at 828-256-2183 or request a quote.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Addicted2Success BRRRR Method
4. OCC Comptroller’s Handbook: Truth in Lending Act
5. CFPB Truth in Lending Act Exam Procedures
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Cash-Out Refinance vs Hard Money for a Rental Capital Repair · Can a DSCR Cash-Out Refinance Raise Down Payment Money for a Parent’s House?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.