Skip to main content

Investors looking to refinance their rental properties without an occupying tenant often find it difficult with traditional conventional loans. Conventional loans are backed by Fannie Mae and Freddie Mac and have stricter, fixed guidelines to qualify that mortgage lenders must abide by. Said guidelines often state that a borrower must have income documentation for the current and previous months to qualify for a refinance on their investment property. These strict requirements limit borrowers and their options to refinance an investment property without a tenant.

The good news is that borrowers have options! There are some lenders—private loan lenders like Newfi!—that do not have the same requirements as traditional conventional lenders. Because we offer loan products that are not backed by Fannie Mae and Freddie Mac, we have more flexible solutions for investment property lending.

No Tenant? No Problem!

At Newfi we offer an alternative lending solution for investors looking to refinance their rental properties called a Debt Service Coverage Ratio (DSCR) Cash Flow loan. A DSCR Cash Flow loan is an investment property mortgage that borrowers qualify for based on the cash-flow of the rental property. But what does that really mean?

It means that we look at the location of your property and what other rental properties in that area bring in on a yearly basis, then qualify you on that calculated amount. We refer to this as your expected market rent, or your cash-flow.  DSCR Cash Flow loans have no personal income requirements, require less documentation, and offer borrowers a quicker process on their investment property transactions.

Why Would You Need to Refinance Without a Tenant?

An investment property owner—we’ll call them “Z”—has decided to renovate their rental property. Z thinks that it’s a great time to renovate because their tenant has moved out and the house is vacant! They decide to go to a local agency lender and explore their refinance options. Z is hoping to be able to take cash out of their home to do these renovations. However, the local agency lender cannot qualify Z for a refinance because the investment property is not currently bringing in revenue.

Z leaves the local agency lender frustrated. They know that living through renovations would be hard on a tenant, and that—realistically—any prospective tenant is not going to want to live in a construction zone. Z isn’t sure what to do next.

Thankfully Z comes to Newfi because they specialize in investment property financing. One of our Senior Loan Advisors recommends Z look at a DSCR Cash Flow loan because borrowers qualify for the loan with their expected marker rent, not personal income. With this solution, Z won’t have to worry about showing current proof of income from their rental property.

This means Z will be able to take cash out of their current mortgage to renovate without a tenant! Since our process is quick, Z can also get their renovations done swiftly and resume generating cash flow on their property with their upgrades in place.

Other Benefits to Refinancing with a DSCR Cash Flow Loan

  • Generate More Cash-Flow Month Over Month

Newfi offers 30- and 40-Year Interest Only payment options with our DSCR Cash Flow loan. These loan terms can lengthen the repayment period on your mortgage, provide interest only payments on the first 10 years of the loan, and therefore lower your monthly payment obligation. With these options we put more of the monthly rent you collect in your pocket! We prioritize the cash flow on your investment properties.

  • Newfi Only Asks for What We Need

We understand that what our borrowers want is to:

  • Refinance to take cash out of their home for renovations
  • And do those renovations without a tenant in their investment property.

At Newfi, we think these are simple asks. So, we’ve created a simple qualifying process. We don’t ask for proof of income, your employment, personal debt, or heavily detailed information on the other properties in your real estate portfolio. That means you need to provide less information on your personal finances and can have a smoother mortgage process.

  • The Quicker Process

We always want our borrowers to be able to refinance and begin renovations as soon as possible. With our DSCR Cash Flow loan, that’s possible! We’re able to get you access to your equity faster because our loan process is shorter than a typical conventional loan and doesn’t have mandatory waiting periods.

DSCR Cash Flow Loans: The Answer to Refinancing Without a Tenant

Questions about refinancing your investment property with our DSCR Cash Flow loan? Interested in learning more about investment property mortgage options? Get a quote or talk to one of our senior loan advisors today at!

Want to know if Newfi’s really up for the test? Read any of our 1,300+ reviews and see what our past clients have to say!

Close Menu