Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Quick Read: The 75% ceiling in this title belongs to long-term DSCR cash-out refinancing, not to hard money. Hard money cash-out and rate-and-term refinances typically reach up to 65% of value. The best program for your situation is usually a hard money bridge while the property is finished and leased, then a DSCR cash-out refinance to reach 75% once the property is stabilized and seasoned.
- Hard money cash-out refinancing runs up to 65% of value, with 6-18 month interest-only terms and no prepayment penalty, varying by lender, property, and experience.
- DSCR cash-out on a standard rental runs up to about 75% LTV across most of the wholesale network, with roughly 6 months of seasoning as the common expectation.
- Two tests set the loan: a value test (the LTV cap) and a rent test (coverage). The tighter one wins.
- Net cash is always smaller than the headline percentage, because the payoff and closing costs come out first.
- Every figure here is a typical range and subject to lender guidelines. Nothing here is a commitment to lend.
What Does 75% LTV Actually Attach To?
Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The 75% figure attaches to DSCR cash-out refinances on standard rentals. Hard money is a different product with a different job. It is short-term, interest-only, and underwritten on the property, the plan, and the exit rather than on long-term rent coverage.
Across the wholesale network Lendmire works with, hard money programs sit like this:
- Cash-out and rate-and-term refinance: up to 65% of value.
- Bridge purchases without rehab: up to 80% of purchase price.
- Fix-and-flip: leverage is measured against project cost and capped at 75% of after-repair value, so those figures are loan-to-cost, not LTV.
- Terms: 6-18 months, interest-only, no prepayment penalty.
- Collateral: non-owner-occupied residential, 1-4 units.
- Loan size: up to $5,000,000, with larger balances by exception.
Those are typical ranges that vary by lender, property, and experience. No hard money refinance program in the network reaches 75% of value on a hold.
So when an investor searches for this program, there are really two questions. The first is how to pull cash out of a property that is still on short-term debt. The second is how to reach 75% leverage on a property that now produces rent. The first is a hard money question and tops out lower, at up to 65% of value. The second is a DSCR question and is where the 75% lives.
The pairing is common. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized. Lendmire, a mortgage broker, arranges that path through select lenders in its wholesale network, which covers 41 markets, including Washington, D.C.
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 lender looks at the property first. As the Scotsman Guide notes, many DSCR products include a cash-out option, and the agency limit on owning 10 financed properties does not apply to them.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the appraised value of the property.
Loan-to-cost: The loan divided by what the project costs, used on hard money purchase and rehab loans instead of value.
Cash-out refinance: A new loan that pays off the old one and returns the leftover cash to the borrower.
Rate-and-term refinance: A new loan that pays off the old one with no cash back, apart from small amounts allowed by the lender.
Seasoning: The ownership period a lender wants before it will size a loan on a new appraisal. Seasoning is lender policy, not law.
DSCR (debt service coverage ratio): Monthly rent divided by the monthly PITIA, meaning principal, interest, taxes, insurance, and HOA dues.
PITIA: The full monthly housing obligation on the property, as listed in the DSCR definition above.
Bridge loan: Short-term financing that carries a property until a longer-term loan replaces it.
How Underwriting Treats the Refinance, Step by Step
Underwriting a cash-out on a rental runs in a set order. Skipping a step is how files stall.
1. Pick the exit product. Hard money fits the stretch before a rental is finished, leased, and seasoned. DSCR cash-out fits after that. A DSCR take-out usually needs documented leasing, a stabilized rent roll, final rehab costs, and an appraisal that reflects post-repair value.
2. Check the seasoning clock. About 6 months of ownership, counted from recording, is the common expectation across the network. Each lender sets its own waiting period and its own exceptions. Inside the window, the loan is typically sized on the lower of the appraisal or the cost basis. After the window, the appraisal governs.
3. The lender orders the appraisal with a rent schedule. The appraisal does two jobs. It sets value, which drives LTV, and it sets market rent, which drives coverage. A borrower’s own after-repair estimate is not an underwriting input.
4. Decide which rent counts. Most files use the lower of the signed lease and the appraiser’s market rent. A vacant property uses market rent. A lease above market does not raise the number.
5. Run the coverage math. Divide monthly rent by PITIA. A ratio of 1.00 means rent equals PITIA, and it is where most programs start. Stronger ratios open better pricing and leverage. Select lenders in the network also offer coverage below 1.00, with leverage and terms adjusted.
6. Apply the two tests. The loan generally cannot exceed the cash-out LTV cap times the appraised value. Coverage must also reach the program floor. The loan is the smaller of the two results.
7. Subtract the payoff and costs. The check the borrower receives is the loan less the existing payoff and closing costs. That includes any payoff of a hard money balance.
8. Assemble the file. A typical file has the lease, credit, the appraisal with rent schedule, title, a payoff statement, entity papers, and reserves documentation. DSCR reviews the property rather than personal income, but the file is not light on documents.
The appraisal forms are worth knowing by name. Form 1025 is the Small Residential Income Property Appraisal Report for two- to four-unit properties. Form 1007 is the single-family comparable rent schedule, and the same schedule also appears under a different form number in the agency world, where it is used to obtain market rent from the appraiser. DSCR loans are not agency loans. The forms are borrowed as documentation only.
The Two-Test Math at 65% and at 75%
The cap decides how much appraised value you need before any cash comes back. Use percentages, not dollars, to see it.
Divide payoff plus closing costs by the cap. At a 65% cap, the appraisal must come in at about 154% of payoff plus costs before cash comes back. At a 75% cap, it must come in at about 133%. That gap is the practical difference between the two products.
Run the numbers on a hypothetical rental where payoff plus closing costs equal 60% of the expected appraised value. This is a modeled assumption, not a market figure.
| Cap | Max loan (% of value) | Cash back (% of value) |
|---|---|---|
| Hard money, 65% | 65% | about 5% |
| DSCR cash-out, 75% | 75% | about 15% |
Now raise payoff plus costs to 70% of value. A 65% cap leaves a gap, so the deal becomes a payoff-only refinance with the borrower bringing the difference. A 75% cap returns about 5%.
Next, test a low appraisal. Say you expected a value of 100 and payoff plus costs are 60. The appraisal comes in at 90.
- At 75%, the loan is 67.5, so cash back is 7.5 instead of 15.
- At 65%, the loan is 58.5, which does not cover the 60, so cash back is gone and the borrower brings money.
A 10% miss on value cut the DSCR cash-out roughly in half and erased the hard money cash-out. Low appraisals hit hardest where the cap is lowest.
The rent test can also bind first. If rent supports only a smaller loan than the LTV cap allows, the smaller loan wins. Clearing 1.00 is also not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation.
Structures and Variations That Exist
Hard money bridge, then DSCR take-out. This is the common path for investors who buy, rehab, lease, and hold. The bridge carries the property on 6-18 month interest-only terms with no prepayment penalty. The DSCR cash-out replaces it with a long-term loan once the property is stabilized and seasoned. This strategy depends on the DSCR loan being approved at the end, and a refinance is never guaranteed. The property must meet DSCR requirements first. Plan the take-out before taking the bridge.
Hard money payoff as rate-and-term. Paying off a hard money balance with no cash back is generally treated as rate-and-term. Once cash comes back, it is a cash-out with its own seasoning and leverage cap. Because a payoff-only loan avoids the cash-out treatment, some investors size the new loan to the payoff and stop there.
Delayed financing for all-cash buyers. An all-cash, arm’s-length purchase can sometimes cash out before the usual seasoning window. The loan is sized on the lower of value or documented cost, and the cash-out cap still applies. Hard money and financed purchases generally do not qualify for this path.
Term structures on the DSCR side. The spine is the 30-year fixed. Extended terms and interest-only periods are available through select lenders in the network, and ARM structures exist for investors who want them. Standard DSCR loan sizes reach up to $3,000,000 on standard programs, with smaller balances available through select lenders. Above $2,500,000 the network generally holds to 30-year fixed structures.
Short-term rental collateral. Cash-out on STR collateral is capped lower than on long-term rentals. On STR collateral, DSCR cash-out runs at about 70%, against about 75% on a standard long-term rental. Expect a score of 640 or higher and about 12 months of hosting history. Form 1007 reflects monthly market rent, not nightly income. 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. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Where the General Rule Breaks
The 65%-versus-75% split holds for most files. A few situations bend it.
A recorded hard money lien shows up in title. The refinancing lender can see it. That lien can start the lender’s seasoning clock or change how the file is classified. Pull a title report early so nothing about the old loan surprises the new lender.
Multi-unit properties. Two-to-four-unit properties use Form 1025, and caps can differ from single-family. On larger loans, the cash-out LTV ceiling steps down by loan band. Check the cap for your unit count and loan size before assuming 75%.
Thin credit. A 620 floor exists in parts of the network. Most programs want about 660, and 700 or higher unlocks the strongest leverage tiers. On the hard money side, the minimum score is 620, with additional conditions below 660. First-time investors qualify at the lower leverage tiers, and the top tier is reserved for experienced investors.
Coverage below 1.00. This is a separate path from the standard 1.00 programs. The Scotsman Guide reports that some non-QM lenders will lend below 1.0 if other assets compensate for the shortfall. Select lenders in the network offer it, with leverage and terms adjusted. No-ratio structures are available only through select lenders, generally for borrowers who already own a primary residence.
Reserves. Reserves vary by lender, leverage, loan size, and transaction type. About 6 months of PITIA is common on DSCR cash-out files. Loans above $1,500,000 typically step up to about 9 months. Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived, but that rarely applies to a cash-out.
Property types not offered. DSCR on manufactured homes (single- and double-wide), log homes, and barndominiums is not offered in the network. On the hard money side, commercial, industrial, land, hospitality, and owner-occupied properties are not on the program sheet.
Appraisal shortcuts. Waiver-style shortcuts built for owner-occupied, limited-cash-out loans do not fit a rental cash-out. Expect a full appraisal with a rent schedule.
Bigger down payments help, but only so far. More equity lowers the monthly payment and can lift the coverage ratio. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests, with enough equity and enough rental coverage.
Which Path Fits Which Situation?
| Your situation | Typical path | Limiting factor |
|---|---|---|
| Rehab done, leased, past seasoning | DSCR cash-out, about 75% | Appraisal and coverage |
| Rehab done, not yet leased | Hard money cash-out, up to 65% | Value and exit plan |
| Rehab done, rent thin | DSCR through select lenders, adjusted terms | Coverage and leverage |
| Short-term rental, 12 months hosted | STR cash-out, about 70% | Hosting history |
| Hard money maturity approaching | DSCR take-out if seasoned | Seasoning and appraisal |
| Too little equity | Payoff-only refinance | Value test |
The right choice depends on the property, the plan, and how far along the file is. A file that works as a hard money bridge in month three may be a DSCR file by month seven.
For the full program map, see the complete DSCR loans guide.
What the Best Program Depends On
No single program is best for every investor. The best program for your situation depends on property type, credit profile, leverage need, documentation, and how long the bridge has to run. The lenders that write this business depend on the same factors, so the match matters more than the label.
This is where a broker earns its place. Lendmire shops multiple wholesale lenders and matches the scenario to the program. One lender may want 12 months of hosting history. Another may waive reserves at modest leverage. A third may accept a lower score with less leverage. A single lender sees only its own guidelines. A broker sees the range.
Preparation also makes the match cleaner. A tidy file for either product has these pieces:
- Entity documents, with LLC vesting subject to lender program eligibility.
- A signed lease, or a rent schedule request ready for the appraiser.
- A payoff statement for the existing loan.
- A reserves statement showing liquid funds.
- A scope-of-work and final cost summary if there was a rehab.
- Title information showing any recorded hard money lien.
Frequently Asked Questions
Why is hard money capped below the 75% in the title?
Hard money is short-term, interest-only, and underwritten on the property, plan, and exit. Its cash-out and rate-and-term refinances typically run up to 65% of value, varying by lender, property, and experience. The 75% ceiling belongs to DSCR cash-out on a standard rental. For most investors, the working answer is a hard money bridge followed by a DSCR cash-out once the property is stabilized and seasoned.
How long do I have to own the property before a DSCR cash-out?
About 6 months of ownership, counted from recording, is the common expectation. Seasoning is lender policy, not law, so each lender sets its own period and exceptions. Inside the window, the loan is typically sized on the lower of the appraisal or cost basis.
Does passing the 1.00 coverage test mean the property cash flows?
No. DSCR compares rent to PITIA only. A property can clear 1.00 and still have thin cash flow after those costs. Treat the ratio as a lending test, not a profit measure.
Can an LLC take a hard money or DSCR cash-out loan?
Often yes, subject to program terms. The Scotsman Guide notes that DSCR loans have no cap on financed properties, which makes entity ownership common among investors building portfolios. Lenders review the entity papers as part of the file, so have them ready.
What happens if the appraisal comes in lower than I expected?
The loan shrinks with the value, and cash back shrinks faster. In the hypothetical above, a 10% value miss cut a 75% DSCR cash-out roughly in half and erased a 65% hard money cash-out. The lender’s appraisal sets value and market rent, and the borrower’s own after-repair estimate is not an underwriting input. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Where to Go From Here
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. Investors can request a quote through the Lendmire quote page or call 828-256-2183. Program details vary by lender, property, and experience, and nothing here is a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide, “Invest in Your Future”
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Banks That Offer a Hard Money Cash-Out Refinance When the Hard Money Note Is Coming Due · DSCR Cash-Out vs Hard Money to Pay Off a Private Note · Short-Term Rental Cash-Out Refinance Requirements for an Out-of-State Investor
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.