An experienced real estate investor came to us carrying a 7.375% rate on a four-unit multifamily rental property in Fort Lauderdale, Florida. The property was cash-flowing, fully occupied, and generating reliable monthly income — but the rate was eating into his returns and equity had built up that he wasn't using. He wanted to fix both problems at once: lower his rate and pull cash out to fuel his next moves.
We closed him at 5.874% on a 30-year fixed DSCR loan — $675,000 funded. Of that, $490,000 went to pay off his existing mortgage. He walked away with $140,000 in usable capital, without submitting a single tax return or bank statement.
What Is a DSCR Loan — and Why It Was the Right Tool
A DSCR loan — Debt Service Coverage Ratio loan — qualifies the borrower based entirely on the property's income, not their personal finances. The lender looks at one thing: does the monthly rent cover the monthly debt service? If yes, the deal works. No W-2s. No personal tax returns. No two years of self-employment income history. The property carries itself, and the loan reflects that reality.
For investors who own multiple properties, run businesses, or take advantage of depreciation and write-offs — the kind of people whose tax returns look nothing like their actual financial picture — DSCR is the product that actually fits how they operate. Traditional lenders will decline a perfectly performing asset because of a Schedule E. A private lender offering no income verification DSCR financing doesn't care about the Schedule E. They care about the rent roll.
DSCR = Monthly Rent ÷ Monthly PITIA (Principal, Interest, Taxes, Insurance, HOA). A ratio of 1.0 means rent exactly covers the payment. Most lenders require 1.0–1.25. No personal income verification required.
The Rate Story: 7.375% Down to 5.874%
The investor was carrying 7.375% on his existing loan. That's a rate that made sense when it was originated, but the market had moved — and so had his options. We locked him at 5.874% on a 30-year fixed. That's a reduction of more than 150 basis points on a $675,000 loan.
On paper that's roughly $670 per month in interest savings compared to carrying the same balance at the old rate — money that now stays in his pocket every single month for the life of the loan. Over five years, that's north of $40,000 in interest that stays on his side of the ledger. The rate reduction alone made the refinance worth doing. The cash-out made it a no-brainer.
"The rate drop alone saves him roughly $670 a month. The cash out gives him capital to move on the next deal. That's what a refinance is supposed to do."
The Cash-Out: $140,000 Freed Up and Ready to Deploy
The existing payoff was roughly $490,000. The new loan came in at $675,000. After satisfying the old balance and closing costs, the investor walked away with $140,000 in cash. That capital doesn't sit in the property appreciating at whatever the local market does — it goes back to work immediately.
He now has the liquidity to acquire additional properties, pay down other obligations, cover capital improvements across his portfolio, or move on an opportunity the moment it shows up — without needing to go back to a lender, wait for an approval, or explain his tax returns to anyone. The cash is his to deploy on his schedule.
Why Section 8 Makes DSCR Even Stronger
This particular four-unit was a Section 8 property — and that matters more than most investors realize when it comes to DSCR qualification. Section 8, formally the Housing Choice Voucher Program, has the federal government covering a guaranteed portion of the rent every single month. The payment doesn't depend on whether the tenant has a good month. It doesn't fluctuate with local economic conditions. It arrives on time because it comes from HUD — the U.S. Department of Housing and Urban Development, the federal agency that administers the program.
For DSCR underwriting, guaranteed income is about as good as it gets. Vacancy risk drops significantly. Rent collection risk is essentially zero on the voucher portion. The property's income is stable, predictable, and backed by the U.S. government — which is exactly what lenders want to see when they're evaluating whether a property can carry its debt service. Section 8 and DSCR are a natural fit, and this deal was a textbook example of why.
The Advantages of a Cash-Out Refinance on Investment Property
A cash-out refinance on an investment property is one of the most capital-efficient moves a landlord can make. Instead of selling an asset to access equity — triggering capital gains taxes, losing a cash-flowing property, and incurring transaction costs on both sides — you keep the asset and pull the equity out as debt. That debt is at a fixed rate, on a long amortization, and the interest may be deductible against rental income. The property keeps generating cash flow. You keep the appreciation. And you get the liquidity without the tax event.
For investors with multiple properties, cash-out refinances are how portfolios compound. You buy, stabilize, build equity, pull it out, and deploy it again. Each property you acquire becomes a source of fuel for the next one. The investors who grow the fastest aren't the ones waiting to save up — they're the ones who understand how to recycle capital already sitting inside assets they own.
Own a Rental Property With Equity? Let's Talk.
If you're carrying a rate above 6% or sitting on equity you haven't touched, there may be a better structure available. No tax returns required — just the property.