Florida investors have two main ways to take equity out of a rental: a conventional cash-out, qualified on your personal income, or a DSCR cash-out, qualified on the property's rent.
Conventional investment cash-out
- Maximum: 75% of value on one unit, 70% on two to four units (Fannie Mae Eligibility Matrix; Freddie Mac Guide 4203.1)
- Seasoning: the mortgage being paid off must be at least 12 months old, and you need 6 months on title (or use delayed financing after a cash purchase)
- Qualifying: full income documentation and debt-to-income ratio
- Title: in your personal name at closing
DSCR investment cash-out
- Maximum: set by each lender — commonly up to 70%–75%
- Qualifying: the property's rent compared with its full payment; no tax returns
- Title: can usually close in an LLC
- Short-term rentals: many lenders accept vacation-rental income
- More detail: DSCR cash-out refinance and Florida DSCR refinance
Example
| Conventional (1 unit) | Conventional (fourplex) | |
|---|---|---|
| Appraised value | $450,000 | $800,000 |
| Maximum LTV | 75% | 70% |
| Maximum loan | $337,500 | $560,000 |
| Current payoff | $200,000 | $400,000 |
| Cash before closing costs | $137,500 | $160,000 |
Florida closing taxes on the new loan
Florida charges two state taxes when a new mortgage is recorded:
- Documentary stamp tax on the note: 35 cents per $100 of the loan amount
- Nonrecurring intangible tax on the mortgage: 0.2% (2 mills) of the loan amount
On a $337,500 loan that's about $1,181 in doc stamps and $675 in intangible tax. Whether part of a refinance is exempt depends on how the loan is structured; your Loan Estimate shows the exact amount. Source: Florida Department of Revenue.
Florida-specific factors
- Insurance costs are part of the DSCR payment calculation. Higher premiums lower your ratio, so get an updated quote before applying.
- Short-term rental rules are set city by city and county by county in Florida. A lender using vacation-rental income will want to know the property can legally operate as one.
- Condos: lenders review the building's condition, reserves and budget, which can limit options on some buildings.
- Flood zones: flood insurance, if required, is part of the payment.
Where to next
Frequently asked questions
How much can I cash out of a Florida rental property?+
With a conventional loan, up to 75% of the appraised value on a single unit or 70% on two to four units. DSCR lenders set their own limits, commonly up to 70% to 75%.
What taxes apply to a Florida cash-out refinance?+
Florida charges documentary stamp tax of 35 cents per $100 on the note and a 0.2% nonrecurring intangible tax on the new mortgage. Your Loan Estimate shows the exact amount for your loan.
Can I cash out a Florida vacation rental?+
Yes, often with a DSCR loan that accepts short-term rental income. The lender will want to confirm local rules allow the property to be rented short term.
Can I do a Florida investment cash-out in an LLC?+
Usually with a DSCR loan. Conventional loans close in your personal name.