LAMD-D10 DSCR Standard 0.75+ | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 660
Max LTV – purchase: 80% (680+, ≤$1.5M; 740 ≤$2M)
Max LTV – rate/term refinance: 80%
Max LTV – cash-out refinance: 75% (720/700, ≤$1.5M)
Minimum loan amount: $100K
Maximum loan amount: $2.5M
Cash-out (cash in hand) limit: Unlimited under 65% LTV; $750K cap above 65%.
LTV reductions & overlays: 1x30x12 housing: 75%. First-time investor: 75% (680 FICO, DSCR 1.00+, 12 months' reserves, 0x30x12). Non-warrantable attached condo: 75%. Short-term rental (1 unit only): 75% purchase/rate-term, 70% cash-out, DSCR 1.00+. Interest-only: 75% at DSCR 1.00+ or 70% at 0.75–0.99 (700 FICO). Cash-out $1M–$1.5M with DSCR under 0.80: 65%. Recently listed cash-out: −5%. Declining market: −5%.

DSCR requirements

Minimum DSCR: 0.75
DSCR below 1.00: Yes – 0.75–0.99: 75% purch/RT (720), 70% CO; CO 65% for $1–1.5M when <0.80
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA (IO: ITIA). Short-term rent is counted at 80% of the appraiser's STR figure, 80% of an AirDNA projection, or 80% of the 12-month payout (gross bookings minus deductions).

Products & terms

Products: 15/30 fixed, 30yr fixed IO
Interest-only: Yes – 700 FICO; 75% (≥1.00) / 70% (0.75–0.99)
Prepayment penalty: Up to 5 yr or state max
Reserves: DSCR 1.00+: 3 months under $500K, 6 months above. DSCR under 1.00: 6 and 9 months. First-time investor 12 months. Cash-out proceeds count.

Borrower & credit

Housing payment history: Max 1x30x12 on the subject and the primary residence (caps LTV at 75%); any mortgage on the credit report must also be within 1x30x12. Every borrower must currently own and be obligated on a US mortgage for 12 months. First-time investors need 0x30x12 and can't live rent-free.
Credit events (BK, foreclosure, short sale, modification): No significant derogatory event in the last 36 months: short sale, deed-in-lieu, mortgage charge-off, pre-foreclosure, foreclosure, bankruptcy (Ch 7/11/13), non-COVID/non-disaster forbearance, notice of default, lis pendens, 120-day mortgage late, or a default modification. Measured to the note date.
Forbearance, deferrals & modifications: A non-COVID, non-disaster forbearance counts as a significant credit event (36 months). COVID or non-default modifications don't count.
Collections, charge-offs, judgments & liens: Collections/charge-offs under 24 months may stay open up to $2,000 total; 24+ months up to $2,500 each; time-barred and medical collections ignored; collections on a payment plan can stay. Judgments, liens and delinquent taxes on title must be paid. Credit counseling OK after 12 on-time months. Non-traditional credit not allowed; 2 credit scores minimum.
Tradelines & credit depth: N/A
First-time homebuyer: No
First-time investor: Allowed: 680 FICO, max 75%, DSCR 1.00+, 12 months' reserves, 0x30x12; not if living rent-free. Experienced borrowers must document 12 months of landlord history in the last 3 years.
Foreign national: No
ITIN borrower: No
Non-permanent resident: Yes
LLC / entity vesting: LLC, corporation or partnership (US-domiciled, up to 4 owners, all natural persons). Guarantor must own 25%+ (or be majority holder) and sign a notarized personal guaranty; each guarantor's credit is used for qualifying and pricing. Revocable trusts per Fannie Mae. No POA with an entity.
Gift funds & assets: Purchase only with a 10% borrower contribution and DSCR 1.00+. Not for reserves; no gift of equity.
Financed property / exposure limits: Lender exposure per borrower: $5M or 10 loans (DSCR 1.00+); $2M or 2 loans when DSCR is under 1.00.
Other borrower rules: US citizens, permanent and non-permanent residents. Foreign nationals and first-time homebuyers ineligible; no family-member tenants; no non-arm's-length deals; employment income must not be disclosed on the application.

Property

Eligible property types: SFR, 2-4, PUD, warrantable condo, non-warrantable condo (no condotels)
ADUs & unpermitted additions: Single-family homes with up to three ADUs, and 2–4 unit properties with ADUs, are eligible under Fannie Mae's ADU rules. Unpermitted ADUs make the property ineligible on this program (it is one of the stricter programs on this point). ADU rent follows the general rent rules (1007/1025).
Non-warrantable condo: Allowed with full questionnaire, no more than 2 non-warrantable features, max 75%. Commercial space up to 50% (subject unit fully residential), HOA delinquencies up to 20%, reserves at least 8%, investor concentration up to 60%, single-entity ownership up to 25%, new projects 50% sold with common areas complete (developer control OK with defined turnover). Litigation OK if non-structural, not health/safety, and damages under 25% of reserves or insured. A borrower may own no more than the lesser of 3 units or 15% of a project.
Condotel: True condotels with on-site reservation desks are prohibited; short-term vacation-rental condo projects are case-by-case.
Rural / acreage: Rural properties are not eligible for investment loans. Max 5 acres on this DSCR program.
Minimum square footage: 500 sq ft total living space.
Mixed use: No
5+ units / multi-property: No
Ineligible properties: Rural, mixed use (and commercial, industrial or mixed-use zoning), zoning violations, condotels, co-ops, manufactured/mobile homes and manufactured-home condo projects, unpermitted ADUs, tenancy-in-common properties, timeshares, boarding houses/B&B/PadSplit, assisted living, working farms, vacant/undeveloped land, unique properties (barndominiums, log homes, domes), C5/C6, under 500 sq ft, no full kitchen with stove and oven, not suitable for year-round use, tribal land, STR-qualified properties where local code bans STRs. Leaseholds (where common, not tribal) and modular homes are eligible.
Declining markets: N/A
Appraisal, review & insurance: One full appraisal under $2M, two above. No hybrid/reduced appraisals; under 180 days old at note. Bergen and Essex (NJ) and Orange and Rockland (NY) counties need a CDA regardless of CU score.

Rental income

Rent used on a purchase: Lower of lease or 1007/1025; lease required if a tenant stays or a new lease starts within 60 days.
Rent used on a refinance: Market rent with the lease if tenant-occupied. A lease above market can be used up to 120% of market rent with 3 months' receipts (deposits excluded).
Vacant / unleased refinance: Only if the property was recently renovated to be rented and the appraiser confirms with photos; market rent then used.
Short-term rental (Airbnb/VRBO): Yes – 1 unit only
Short-term rental documentation: Property must be legal and licensed as an STR where required; 1-unit only. Purchase: appraiser's STR rent schedule at 80%, or an AirDNA analysis at 80% of projected revenue (12-month forecast within 90 days of note, 50%+ occupancy, 4 comps in the same ZIP or within 2 miles, similar size/rooms/amenities). Refinance: 12-month remittance statement from Airbnb/VRBO-type manager plus an active-listing screenshot and an STR 1007; owned under 12 months is case-by-case using the purchase method.
Short-term rental limits: 1-unit only; 75% purchase/rate-term, 70% cash-out; minimum DSCR 1.00; 20% income haircut.

Refinance seasoning

Cash-out seasoning: 6 months on title (time held by the borrower's majority-owned entity or revocable trust counts). If the existing loan was a cash-out, it must be 6+ months old. The inherited/divorce-award exception does not apply to DSCR loans. No POA on cash-out. Must be off the market 1 month before application.
Delayed financing (cash purchase recoup): Allowed per Fannie Mae, priced and limited as a cash-out.
Recently listed for sale: Not currently listed; if listed in the past 6 months, off market at least 1 month before application, with cancelled listing, MLS search and intent letter. LTV uses the lower of list price or appraisal; cash-out also takes a 5% LTV reduction.

Other terms

Seller / interested-party concessions: Interested-party contributions up to 6%.
Secondary financing: No new subordinate financing. Existing seconds may stay on a refinance if subordinated and recorded (not with interest-only).
State & local restrictions: Not available in Baltimore City MD, Brooklyn NY, Puerto Rico, Guam or USVI; Hawaii only through delegated channels. Prepayment penalties in IL and NJ only for S/C-corporation borrowers. Texas 50(a)(6)/50(a)(4) ineligible.

Additional details

Notes: All borrowers must currently own & be obligated on a US mortgage for 12 mo. Not permitted: Baltimore City, Brooklyn, Guam, USVI, PR; HI delegated only. CDA required in Bergen/Essex NJ, Orange/Rockland NY. Declining market −5%. Existing subordinate financing OK on refi (not IO).

← LAMD-D09 · All programs · LAMD-D11 →