The Quick Read: HARP no longer exists, so the practical route for most rental owners is a DSCR refinance, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. It is a brand-new application, so it does not matter who holds your current loan. It does require real equity, though, and it will not rescue an underwater property.
- HARP stopped taking new loans after 2018 and cannot be revived by any lender.
- A DSCR refinance looks at rent against the full housing payment, not at your personal income.
- Cash-out refinances on standard rentals typically top out around 75% LTV across the network.
- Many select programs start at 1.00 coverage, and stronger ratios open better terms.
- Underwater rentals generally need cash at closing or more time before refinancing.
What Was HARP, and Why Is It Gone?
HARP was a federal refinance program for borrowers whose homes had lost value. The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to extend it through December 31, 2018, and the agency reports that more than 3.4 million homeowners refinanced through HARP. It only worked on loans that Fannie or Freddie already owned. That is why it never became a general refinance tool.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 29, 2026
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As of Oct 29, 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.
Landlords did use it. Even so, the window has closed. No lender can offer it today, and any pitch that says otherwise deserves suspicion.
Did Anything Replace It?
Only a narrow successor exists. Fannie Mae’s Selling Guide describes a high-LTV refinance option for borrowers whose loans Fannie Mae already owns, and it notes that acquisition of those loans is currently paused. In short, there is no federal rescue refinance waiting for rental owners.
That leaves private-market options. A DSCR refinance is one of them. It is a non-QM investor product, built for non-owner-occupied properties and reviewed differently from a standard owner-occupied mortgage.
How Does a DSCR Refinance Work, Step by Step?
A DSCR refinance replaces your current loan with a new one, underwritten on the property. The steps below show how most files move across the wholesale network.
1. Choose the refinance type. A rate-and-term refinance pays off the old loan with little or no cash back. A cash-out refinance pulls equity out. Both are new applications.
2. Order the appraisal with a rent schedule. For a single-family rental, the appraiser gives an as-is value and a market-rent opinion on Fannie Mae Form 1007. Small multifamily uses a different income form and a rent roll.
3. Settle on the rent figure. Most programs use the lower of the signed lease and the appraiser’s market rent. A lease above market adds nothing if the appraisal comes in lower.
4. Run the coverage ratio on the new payment. DSCR divides rent by PITIA: principal, interest, taxes, insurance and any HOA dues. A cash-out raises the balance, so it lowers coverage. A property that covers the old loan easily may cover the new, larger one more thinly.
5. Size the loan with two tests. The value test applies an LTV cap to the appraisal. The rent test requires coverage at the program’s floor. The lower result controls.
6. Check seasoning. Most programs want about 6 months of ownership before sizing a cash-out on appraised value rather than cost.
7. Gather documents. Expect the appraisal, the lease, entity papers if an LLC holds title, a payoff statement, the insurance declarations page, ID and a credit authorization. Personal income documents are not the center of the file, but credit, reserves and property papers still apply.
8. Close and pay off. The new first lien pays off the old loan. Any net equity comes to you only on a cash-out. Check the old note for a prepayment penalty first.
One point trips up many investors. Clearing 1.00 on DSCR does not mean the property cash-flows. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities and capex sit outside it.
What Do the Numbers Look Like?
Across the network, a few ranges come up again and again. Subject to lender guidelines, they run like this:
| Factor | Typical network range |
|---|---|
| Cash-out refinance LTV (standard rental) | Up to about 75% |
| Rate-and-term refinance ceiling | Up to 85% |
| Coverage | 1.00 is where many select programs start |
| Credit score | 620 floor in parts of the network; most want around 660; 700+ unlocks the strongest tiers |
| Reserves | About 6 months of PITIA; about 9 months on loans above $1,500,000 |
| Loan size | Up to $3,000,000 on standard programs |
Treat these as ranges, not promises. Reserves in particular shift with leverage, loan size and transaction type. Conservative rate-and-term files at modest leverage under $1,500,000 can sometimes see reserves waived.
Coverage below 1.00 is a separate path. It is available through select lenders in the network, with leverage and terms adjusted. It is not the same program with a lower floor.
A larger down payment or smaller loan lowers the payment and can 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.
Key Terms Defined
DSCR (debt service coverage ratio): Monthly rent used for lender review divided by the full monthly housing payment.
LTV (loan-to-value): The loan balance as a percentage of the appraised value.
Seasoning: The time you have held title before a lender sizes a cash-out on appraised value instead of cost.
Rate-and-term refinance: A new loan that pays off the old one with no meaningful cash back.
Cash-out refinance: A new, larger loan that returns part of your equity as cash.
PITIA: Principal, interest, taxes, insurance and association dues, the full monthly payment.
Where Does the Standard Path Break?
Several situations change the answer.
Underwater or high-LTV rentals. This is the hardest case. With no HARP-style program, the new loan must still fit inside the LTV cap. A borrower with negative equity needs to bring cash to closing or wait.
Recent purchase or rehab. Inside the seasoning window, lenders commonly size on the lower of cost basis or appraised value. A big appraisal may not turn into cash yet. Investors who buy, renovate, rent and then refinance out of a short-term loan should plan around this.
Unleased or between-tenant property. Some lenders accept an appraiser’s rent schedule when the unit is vacant. Others want a signed lease. A handful of lenders in the network are flexible here, but not all.
Short-term rentals. Form 1007 captures monthly market rent, not nightly projections. For short-term-rental collateral, cash-out tops out at 70%, and refinance leverage runs around 70%. Expect a 640+ score and about 12 months of hosting history, with a 1.00 coverage floor on refinances. 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.
LLC-held property. Entity ownership is commonly allowed on DSCR files, subject to program eligibility. Agency loans generally restrict it.
Free-and-clear rentals. With no payoff, any cash you take is still a cash-out refinance, so the 75% ceiling on standard rentals applies.
Existing DSCR loans. Read the current prepayment terms before refinancing out.
Property types outside the programs. Manufactured homes, log homes and barndominiums are not offered in the network’s DSCR programs.
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.
What If the Numbers Don’t Work?
Start with the ratio. If coverage falls short, the usual levers are a smaller loan, a longer amortization through select lenders, or renewing a below-market lease at market rent before the appraisal. Extended 40-year terms and interest-only periods are available through select lenders and can lift coverage, though they change the cost of the loan over time.
If leverage is the problem, the fix is cash or time. Paying down the balance or waiting for appreciation are the real options. Chasing a sub-1.00 structure to compensate for thin numbers is a signal to rethink the deal, not just the loan.
Is a DSCR Refinance Worth the Trade-Offs?
For a self-employed investor, someone with several financed properties, or an LLC owner, it often is. The property qualifies, not the personal tax return. Equity recycling is the main appeal: a cash-out on a stabilized rental can fund the next purchase. Lendmire’s piece Is It Worth Using a Rental Cash-Out Refinance for a Down Payment? walks through that decision.
The trade-off is cost. DSCR pricing is typically higher than agency pricing, and prepayment penalties are common. A W-2 borrower with one rental and strong equity on an agency-owned loan may find conventional financing cheaper, if an agency loan still fits the file. If you own more than a few financed properties or hold title in an LLC, the conventional lane tends to narrow quickly.
Tax treatment varies; consult a qualified professional.
For the full picture of how these loans work, see the complete DSCR loans guide.
Frequently Asked Questions
Is HARP still available for a rental house?
No. FHFA’s directive ended the program for new loans after December 31, 2018, and the program is not coming back. The agency successor covers only certain Fannie Mae loans, and its acquisitions are paused. A DSCR refinance is the practical private-market alternative.
Can I refinance an underwater rental with a DSCR loan?
Generally not without cash at closing. DSCR programs apply an LTV cap to the appraised value, so negative equity leaves no room to size a new loan. Waiting for appreciation or paying down the balance are the realistic options.
Do I need to show personal income?
The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, reserves, the appraisal and entity papers still matter, so the process is not paperwork-free.
How long must I own the property first?
Most programs want about 6 months of seasoning before sizing a cash-out on appraised value. Lenders vary, so a recent purchase may be sized on cost basis until that window passes.
Can I refinance a vacant rental?
Sometimes. A few lenders in the network will use the appraiser’s market-rent schedule on an unleased property, while others require a signed lease. Ask early, since it changes which program fits.
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. Lendmire is a broker arranging DSCR financing through select lenders in its wholesale network across 41 markets, including Washington, D.C.; every file is underwritten individually 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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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. FHFA news release: HARP extension through Dec 2018
2. Fannie Mae Selling Guide B5-7-01
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Standard vs Jumbo DSCR Refinance for a Larger Rental Loan · How to Get an Escrow Waiver Approved on a DSCR Rental Loan · Can You Get a DSCR Loan on a Beach House You Rent Out?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.