Refi Window Is Cracking Open: Bridge-to-DSCR Timing After the Fed Move

If you’re holding bridge debt, the combination of a softer rate backdrop and calmer Treasury yields is your cue to prep the take-out. Here’s a practical, no-drama playbook to time your bridge-to-DSCR exit so you capture today’s pricing before spreads or appraisals drift.

Who should lean in right now

• Rehabs 70–100% complete with punch-list items left.

• Lease-up at 85–95% with signed rents landing this month.

• Tight DSCR deals (1.05–1.20) that were just out of reach a few weeks ago.

• STR portfolios where a small coupon drop flips coverage positive.

• Rate-term refis where cash-out is optional but carry relief is urgent.

Readiness check (pass these, then move)

Property readiness

• ✅ Final scope within budget ±5%

• ✅ Permits/inspections scheduled (TCO or CO in sight)

• ✅ Rent roll updated; delinquency documented

Paper readiness

• ✅ ARV or DSCR-eligible appraisal lined up (don’t wait)

• ✅ T-12 and current P&L cleaned and labeled (bridge vs. operating)

• ✅ Insurance quotes ready to switch Builder’s Risk → Landlord on funding day

Borrower readiness

• ✅ FICO verified (660+ workable; 700+ helps LTV/pricing)

• ✅ Entity/vesting consistent from bridge to perm

• ✅ Prepay preference chosen (3/2/1 step-down is a smart default)

The 60-day countdown (reuse this on every deal)

Three exit tracks (pick one and drive it)

1) Rate-Term “Speed Flip”
Cosmetic rehabs with strong comps.

• Appraisal on ARV basis if eligible

• I/O option can lift DSCR during first year

• Minimal docs: appraisal, title, insurance, entity

2) Cash-Out BRRRR
Hold strategy with fresh leases.

• DSCR target ≥ 1.15

• Clean rent roll + T-12 + PM letter

• Consider step-down prepay to preserve future refi flexibility

3) Portfolio Ladder (4–8 doors)
Stagger 2–3 closings over 30–60 days.

• Averages into favorable prints

• Avoids appraisal/escrow bottlenecks

• Simplifies 1031 or acquisition timing

Quick DSCR math

• DSCR = NOI ÷ Annual Debt Service
  If NOI is $27,600/yr and target DSCR is 1.15, allowable annual debt is $24,000 (~$2,000/mo P&I).
  A modest coupon improvement can either:

• Increase max loan amount, or

• Keep loan size constant and raise DSCR (smoother underwriting).

Lock vs. float (how to decide in 3 bullets)

• Close ≤45 days? Lock it. If available, add a float-down or pick a shorter lock with a fast close.

• Cash-flow first? Consider ARM or I/O—often improves coverage on tight deals.

• Future optionality? Choose a 3/2/1 step-down over a hard lockout so you can refi again if spreads compress.

Packaging tips that shave a week

• Use a CSI-formatted budget (no “misc.” lines).

• Label financials clearly: “Bridge Carry vs. Operating”.

• Provide before/after photos in a simple cloud folder.

• Confirm loss-payee language on the landlord policy.

• Keep entity names identical across appraisal, insurance, title, and loan docs.

Common speed bumps (and fast fixes)

Case snapshot (illustrative)

• Property: 4-plex, rehab 95% complete

• Bridge: 11.0% I/O; $420k balance

• DSCR take-out: ~7s (pricing tiered to FICO/LTV/DSCR), 30-yr fixed at 80% LTV

• Result: Monthly debt service drops ~25–30%; DSCR rises from 1.08 → ~1.25; carry relief funds next acquisition

(Actual quotes depend on FICO, LTV, DSCR, property type, and prepay.)

Ready to capture the window?

Email your rent roll, T-12, and rehab % complete. We’ll return side-by-side DSCR options (fixed vs. ARM vs. I/O), a countdown timeline, and—if you’re on bridge—a clear payoff plan.

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Bridge today. DSCR tomorrow. Carry relief starts the day after.