LAMD-D02 DSCR Standard (No Minimum DSCR, ITIN) | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 620
Max LTV – purchase: 85% (700, ≤$1M, DSCR ≥1)
Max LTV – rate/term refinance: 85%
Max LTV – cash-out refinance: 75% (700/680, ≤$1M)
Minimum loan amount: $100K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: ≤65 LTV $1M; >65 LTV $500K
LTV reductions & overlays: 2–4 units and modular 80%. STR 70% purchase/rate-term, 65% cash-out (75% with a 12-month rent history). First-time investor: 80% at 700+ FICO, 75% at 680–699, 65% under 680 or with DSCR under 1.00. Rural 75% purchase/rate-term, 70% cash-out. Condotel 75% / 65% cash-out. Non-warrantable condo 80% / 75% cash-out. Unleased refinance 70% rate/term, 65% cash-out. 0x60x12 housing caps at 70% (no cash-out). Declining values, oversupply or 6+ months marketing time: −5% on top of other limits. Listed for sale in prior 6 months (cash-out): −10% or a 2-year prepay.

DSCR requirements

Minimum DSCR: Below 0.75 allowed
DSCR below 1.00: Yes – 0.75–0.99: 70% purch/RT, 70% CO (≤$1M); <0.75: 65% purch/RT, 60% CO (700)
No-ratio (no DSCR calculated): Yes (<0.75 tier, max $1.5M above $1M)
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA at the note rate; interest-only qualifies on the starting ITIA. Rent = lower of lease or 1007; a higher lease is usable with the 2 most recent months' receipts. Short-term rent is haircut 20% (lowest of 80% of appraiser estimate, AirDNA, or actual history). DSCR under 0.75 allowed at reduced LTVs (65% purchase, 60% cash-out, max $1.5M).

Products & terms

Products: 30/40 fixed, 5/6 & 7/6 SOFR ARM, IO versions
Interest-only: Yes – max 75%; not in WV
Prepayment penalty: Permitted where legal (Business Purpose Affidavit)
Reserves: 3 months (of the qualifying payment). Cash-out proceeds can be used with 620+ FICO.

Borrower & credit

Housing payment history: 1x30x12 qualifies at full grid LTVs; 0x60x12 is the floor and caps at 70% (purchase/rate-term only). Mortgage and rent lates are combined. All mortgages on credit, the subject, and the primary residence must be rated – even if not in the borrower's name; private-party rent or mortgage needs 12 months of cancelled checks or bank statements. Everything must be current at closing.
Credit events (BK, foreclosure, short sale, modification): Bankruptcy (Ch 7, 11 or 13, discharged or dismissed), foreclosure, short sale, deed-in-lieu, a loss-mitigation modification (principal forgiveness, curtailment, debt moved to a soft second or unsecured) and a 1x120 mortgage late all need 36 months from closing. A foreclosure/short sale must be complete with no deficiency balance. Property surrendered in a Ch 7 is seasoned from the discharge date.
Forbearance, deferrals & modifications: Only disaster (FEMA/presidential, incl. COVID) forbearance is accepted. If payments were kept current, no action needed. If payments were missed, either reinstate with a lump sum (not borrowed after application) or make 3 on-time payments under a repayment plan, deferral or trial modification. Missed payments during a documented disaster forbearance aren't counted as lates; missed payments after it are.
Collections, charge-offs, judgments & liens: Collections/charge-offs under 24 months old may stay open up to $2,000 total; collections 24+ months old up to $2,500 each; older unsecured charge-offs, time-barred debts and all medical collections can stay open. Anything larger, and any charge-off secured by real estate, must be paid. Judgments and tax liens must be paid at or before closing; IRS debt without a lien needs a plan with 3 months of payments. Consumer accounts can't be more than 30 days past due at closing, and rolling lates are each counted separately.
Tradelines & credit depth: 3 tradelines 12+ months or 2 tradelines 24+ months; a 12/24-month housing history or manually rated utilities can count. Limited or non-traditional credit not allowed.
First-time homebuyer: Not separately excluded – must own or rent primary
First-time investor: Allowed (hasn't owned an investment property 12+ months within the last 36). 80% max at 700+ FICO, 75% at 680–699, 65% under 680 or if DSCR is below 1.00. Rent-free borrowers can't be first-time investors.
Foreign national: No
ITIN borrower: Yes – ITIN grid: 750 → 80% (DSCR ≥1); max UPB $2M
Non-permanent resident: Yes – visa with ≥3 yrs remaining
LLC / entity vesting: LLC, partnership, corporation or S-corp; business purpose limited to real-estate ownership/management (STRs OK). Up to 4 owners, all natural persons; every owner signs a URLA and a personal guaranty, and each owner's credit and assets are used for qualifying and pricing. Trust vesting not allowed. Cash-out on LLC-held property requires 50%+ ownership of the LLC.
Gift funds & assets: Allowed for down payment from a relative after the borrower puts in 5% of their own funds; gifts of equity also allowed after the 5%. Gift funds verified in the borrower's account before closing can count as reserves. Business funds OK for down payment/closing if 50%+ owner.
Financed property / exposure limits: No limit on other financed properties; the lender caps exposure at 5 of its own loans per borrower.
Other borrower rules: Must own or rent a primary residence (renters need a lease/VOR, with the primary superior or near work). Rent-free OK if living in a spouse's home, or elsewhere with 660+ FICO and a rent-free letter. Non-permanent residents need a visa with 3+ years remaining. ITIN allowed under a separate grid (max $2M UPB, 670–750 FICO). Foreign nationals, DACA and trusts ineligible. Limited POA OK.

Property

Eligible property types: SFR, PUD, condo (low/high-rise), site condo, condotel, non-warrantable condo, townhouse, leasehold, 2-4, modular, agricultural zoned
ADUs & unpermitted additions: ADUs (granny units, in-law suites) are fine when typical for the area, substantially smaller than the main house and legal under zoning. Illegal ADUs make the property ineligible; a legal non-conforming ADU needs 2 appraisal comps with similar ADUs. ADU rent counts when local code allows renting it, using the lease or 1007 market rent (a higher lease needs 3 months' receipts); a vacant ADU on a refinance can use market rent but triggers the unleased-property LTV limits. Room additions without permits are acceptable – the appraiser comments on quality and value impact rather than the loan being declined.
Non-warrantable condo: Allowed with management approval. Typical accepted reasons: new projects lacking PERS but substantially sold, investor concentration over 50%, a single entity owning over 10%, commercial space over 25%, reserves under 10% of budget, leased amenities, deductibles over 5%. Projects that are badly under-insured, overdue on required building inspections, have dangerous construction defects or poor marketability are declined. Max 80% purchase/rate-term, 75% cash-out.
Condotel: Allowed as a non-warrantable project with management approval – resort areas, heavy STR concentration, or HOA rental-listing services are acceptable features. Declined: former hotel/motel conversions, mandatory rental pools, limits on owner occupancy, timeshare/fractional. Max 75% purchase/rate-term, 65% cash-out.
Rural / acreage: Rural is case-by-case with an additional management review; max 75% purchase/rate-term, 70% cash-out. Max 10 acres; land value over 35% of total value gets extra scrutiny. Agricultural zoning is fine for a residential use; working/hobby farms are not.
Minimum square footage: 600 sq ft gross living area.
Mixed use: No
5+ units / multi-property: No
Ineligible properties: Manufactured homes, co-ops, mixed use (any business use like a daycare, salon or office), log homes, farms (hobby or working), unique properties, properties with oil/gas/mineral rights exceptions, builder model leasebacks, illegal zoning or non-conforming zoning that prohibits rebuilding, Indian-leased land, Hawaiian Homelands, Hawaii lava zones 1–2, group/boarding homes, nursing or adult-care homes, marijuana-producing properties, C5/C6 condition. Leaseholds are eligible if the lease runs 5+ years past maturity. 55+ age-restricted communities are allowed.
Declining markets: N/A
Appraisal, review & insurance: One full appraisal plus a review product (CU score 2.5 or less at 80% LTV or less, otherwise desk review). Second full appraisal over $2M or on flips (lower value used); values of $1.5M+ get an additional review. Updates allowed up to 240 days. Rent-loss insurance of 6 months required.

Rental income

Rent used on a purchase: Lower of lease or 1007 market rent; purchases may be vacant (market rent used). Leases must have 3+ months remaining at closing (month-to-month OK with an extension letter). Tenants can't have a right of first refusal.
Rent used on a refinance: Lower of lease or 1007; a higher lease is usable with 2 consecutive months' receipts. If the appraisal says it's leased, the lease must be provided.
Vacant / unleased refinance: Allowed using the appraiser's market rent, capped at 70% LTV rate/term and 65% cash-out.
Short-term rental (Airbnb/VRBO): Yes
Short-term rental documentation: Requires both the appraiser's STR income estimate (3+ STR comps, seasonality and occupancy considered) and an AirDNA Rentalizer ordered by the lender (3+ STR comps in the ZIP, 50%+ occupancy, market score 60+). Qualifying rent = lowest of 80% of the appraiser's figure, 80% of AirDNA, or 80% of actual property-manager history. Property can't be altered from residential character (e.g., parking lots, reception areas).
Short-term rental limits: 70% purchase/rate-term, 65% cash-out; 75% when a 12-month rent history from the management platform is documented.

Refinance seasoning

Cash-out seasoning: One borrower on title 6 months (note date to note date) unless delayed financing; if held in an LLC/trust, 6 months in that name (moves between the borrower and their own LLC/trust count toward seasoning). No wait if awarded in divorce. Not eligible if the last first-mortgage transaction was a cash-out within 6 months. Bought under 6 months ago: value is the lower of appraisal or price plus documented improvements; 6–12 months: current value with two appraisals.
Delayed financing (cash purchase recoup): Allowed for cash purchases owned under 6 months: arm's-length purchase, no financing used, funds sourced (no gifts), new loan no more than the documented investment plus closing costs.
Recently listed for sale: Must be off the market by application with a letter of explanation and intent to keep the property 12 months. Cash-out after a listing in the prior 6 months requires a 2-year prepay or a 10% LTV cut; value is the lower of the last list price or appraisal (both refi types).

Other terms

Seller / interested-party concessions: Seller/interested-party credits up to 4% at LTVs over 65% and 6% at 65% or less. Excess is deducted from price; financing concessions not allowed.
Secondary financing: Not permitted.
State & local restrictions: All states eligible; interest-only not available in West Virginia; Texas A(6) refinances not allowed.

Additional details

Notes: 2-4 units & modular max 80%. Declining market −5%. Rent loss insurance 6 mo required. Listed for sale in last 6 mo: 2-yr PPP or −10% LTV on cash-out. Seller concessions 4% (>65 LTV) / 6%. Rolling lates not permitted. All states eligible.

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