Trying to refinance but keep getting declined

[Peggy Liu]

Here's my situation.. I have a 1/1 condo out in Austin that I am trying to refinance with cashout to renovate my unit. If I can renovate, I can get a higher rental income, thus cashflow.

I have a first mortgage of 46K at 6.75% and a home equity loan of 30K at 5.99% on it. The condo is worth around 150K. I'd like to combine the two liens down to a better interest rate. My credit score is around 710~715. I'd like to get out about 20K for home improvements on the condo.

I have tried to apply for conventional loans last spring but I got declined because of my debt-to-income ratio. The underwriter did not accept my sublease agreement with my roommate, which indicates that she pays half of the apartment rent. My primary residence is an apartment rental and the landlord would raise our rent if I added my roommate to the main lease. Our landlord hasn't increased our rent in 6 years. We're about $300 under the going rental market. I don't want to add her only to pay more rent. She doesn't want that either. But, with that said, I have been hitting road blocks on trying to refinance my condo. Does anyone out here on BP know where I might go to refinance? Btw, a lot of the big lenders didn't want to deal with Texas refi. So that was another hurdle.

Thanks in advance!