Your Rental ARM Is Resetting. Here's How to Exit Without W-2s.

The ARM Reset Problem

Adjustable rate mortgages on rental properties were common during low-rate periods. As those initial fixed periods expire, typically 5, 7, or 10 years, the rate adjusts to current market levels. For investors who locked in at 3–4%, a reset to 7–8% can flip a cash-flowing property to negative overnight. A property generating $400/month in cash flow suddenly costs $300/month. That's a $700 monthly swing from a single rate letter.

Why Conventional Exit Is Blocked

Many investors who acquired rental properties during low-rate periods are self-employed or have complex income. Their tax returns show aggressive write-offs. Their Schedule E shows rental losses despite positive cash flow. Conventional lenders use those figures. The refinance gets denied, even for a cash-flowing property with a creditworthy owner.

Additionally, investors who hold properties in LLCs cannot use conventional financing at all: Fannie Mae requires individual borrowers. If your rental is titled in an entity, you have no conventional path out of the ARM regardless of your income.

DSCR: The Clean ARM Exit

DSCR loans never look at your personal income. The rental property's gross rent divided by the new fixed-rate loan's PITIA is the only income calculation. If the ratio is 0.75 or above, you qualify. No W-2. No Schedule E. No DTI.

What You Need to Qualify

• 660+ FICO: standard program
• 0.75+ DSCR on the subject property
• Property in good condition
• No income docs, no W-2s, no tax returns
• Close in LLC: standard

Rate & Term vs Cash-Out

If you just want to fix your rate and improve cash flow, a rate & term refinance replaces the ARM with a fixed DSCR loan: no cash taken out. Rate & term transactions typically get slightly better pricing than cash-out because the lender's exposure doesn't increase. If you have equity and want to access it while fixing the rate, a cash-out refinance accomplishes both in a single transaction at a marginally higher rate.

Submit your deal and specify your goal: we'll quote both options within 24 hours so you can compare the numbers directly before deciding.