LAMD-D14 DSCR Experienced Investor 0.80+ | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 680 (FN no FICO tier)
Max LTV – purchase: 80% (700+)
Max LTV – rate/term refinance: 80%
Max LTV – cash-out refinance: 75% (700+); 680–699 CO N/A
Minimum loan amount: $100K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: >65 LTV max $1M; ≤65 unlimited
LTV reductions & overlays: Warrantable condo 80%, non-warrantable 75%, 2–4 units 80%. 680–699 FICO: 70% and no cash-out. Loans under $150K: 75%. Over $1.5M: 700 FICO and 75%; over $2M: 70%; cash-out over $1.5M: 65% with 700 FICO. DSCR under 1.00: 75% (70% cash-out), max $1.5M, 720 FICO, no condotel or IO. A 1x30x12 mortgage late or any credit event in the last 7 years: 75%. Short-term rental income: −5%. Declining market with LTV over 65%: −5%. Cash-out on property owned under 6 months: −5% (value capped at price plus improvements).

DSCR requirements

Minimum DSCR: 0.80
DSCR below 1.00: Yes – 0.80–0.99: min 720 FICO, max 75% / CO 70%, max $1.5M, no condotel, no IO
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA at the note rate (IO loans use ITIA). DSCR may be rounded at the 4th decimal (0.9945 counts as 1.00). Rent used is the higher of the lease or 1007 market rent – market rent can be used up to 120% of the lease (lease $1,100, market $1,500 → $1,320). A lease above market is usable with 3 months' receipts. Vacant: full market rent with no vacancy factor.

Products & terms

Products: 30yr fixed, 5/6 & 7/6 ARM, 40yr fixed IO
Interest-only: Yes (not for DSCR <1 or FN)
Prepayment penalty: Permitted; NJ S/C-corp only; MI & OH priced no-PPP
Reserves: 3 months under $1M, 6 months $1M–$1.5M, 9 months over $1.5M; 12 months first-time investor; foreign national 12 months plus 2 per other property. None required on rate/term at 65% LTV or less. IO reserves use the IO payment; cash-out proceeds may be used.

Borrower & credit

Housing payment history: Max 1x30x12 (which caps LTV at 75%). Only the primary residence and the subject (on a refi) are verified – VOM/VOR without cancelled checks. Free-and-clear ownership counts as 0x30 for each month owned. Borrowers with less than 12 months of housing history are ineligible, unless they live rent-free and own other property with a clean 12-month history (rent-free letter required).
Credit events (BK, foreclosure, short sale, modification): Bankruptcy, short sale, deed-in-lieu, mortgage charge-off and foreclosure need 36 months from application. Any such event within the last 7 years caps LTV at 75%. Loan modifications acceptable after 36 months.
Forbearance, deferrals & modifications: COVID forbearance must be released and the loan fully current. Any non-COVID deferral or forbearance is disqualifying. Modifications need 36 months.
Collections, charge-offs, judgments & liens: Judgments, garnishments and liens (including mechanic's liens) must be paid at or before closing. Collections/charge-offs under 24 months old may stay open up to $2,000 total; 24+ months up to $2,500 each; time-barred and medical collections ignored. IRS payment plans with 3 months of payments may stay open. Credit counseling OK after 12 on-time months with the counselor's approval. Past-due accounts must be brought current.
Tradelines & credit depth: N/A
First-time homebuyer: Not published – ask us about your scenario
First-time investor: Allowed: max 75% LTV, DSCR 1.00+, 12 months' reserves, verified 12-month housing history. Experienced = owning or managing rental real estate 1 year in the last 3 (property-management employment counts).
Foreign national: Allowed: 70% purchase/rate-term, 65% cash-out (cash-out capped at $350K), max $2M, DSCR 1.00+, no IO, 12 months' reserves plus 2 months per additional property. Visas B-1, B-2, J-1, J-2 (or Visa Waiver). Long list of ineligible countries (OFAC-sanctioned plus others such as Russia, Venezuela, Nicaragua and the Balkans). Without US credit: 3 tradelines with 2-year history from the home country and no mortgage lates in 24 months.
ITIN borrower: No (separate ITIN program is primary-only)
Non-permanent resident: Yes
LLC / entity vesting: Title may be in an LLC, partnership or corporation (investment only): US-domiciled, max 4 members, applicants must own at least 25% if not all members apply, no layered entities, personal guaranties from qualifying members, no POA. Revocable trusts may hold title (not trust plus individual). Trusts and entities can't be the borrower themselves; no life estates.
Gift funds & assets: Purchase only, from a family member. Borrower must show they have 10% of the down payment in their own funds (doesn't have to actually contribute it). Not for reserves; no gift of equity on investment property. Business funds OK with 25%+ ownership; crypto allowed (60% value for reserves unless moved to a US bank). 1031 funds OK for down payment, not reserves.
Financed property / exposure limits: No cap on other financed properties when the subject is an investment property. Lender exposure: $7.5M or 10 loans per borrower; DSCR under 1.00 limited to $2M per borrower.
Other borrower rules: Neither the borrower nor any relative may occupy. Cash-out must be for business purposes (not consumer debt). POA allowed except cash-out and entity closings. Loans to the selling lender's executives, 501(c)(3)s and cannabis-industry business owners are ineligible. All borrowers must meet tradeline minimums.

Property

Eligible property types: SFR, SFR + 1 ADU, modular, 2-4, condo, co-op, rural ≤20 acres
ADUs & unpermitted additions: A single-family home with one ADU is eligible and ADU rent can count. The appraisal must show the ADU is a legal use under zoning – permits are not required to prove zoning compliance – with at least one sales comp and one rent comp that have an ADU. Only one ADU allowed. Purchase: lower of 1007 or lease for the ADU; refinance: 1007 market rent plus the current lease and 2 months' receipts.
Non-warrantable condo: Allowed at 75% (lender's grid). Project criteria: commercial space under 50% (subject unit 100% residential), project and common areas complete with 50%+ sold, HOA delinquencies up to 35% (60+ days), investor concentration up to 60%, single-entity ownership up to 50%, reserves at least 8% of budget, developer control acceptable if turnover is defined. Litigation case-by-case (structural/safety litigation declined). Lender exposure in one project: lesser of $2M or 15% of units.
Condotel: Allowed: $150K–$1M, 75% purchase / 65% refinance, DSCR 1.00+ (not allowed when DSCR is under 1.00). Unit 475+ sq ft with at least 1 bedroom and a full kitchen (full-size fridge and stove/oven). Hotel/resort/lodge names OK; the project must have a hotel or resort rating. Investor concentration up to 100%.
Rural / acreage: Rural allowed up to 20 acres; over 20 acres ineligible. Zoning alone (e.g., agricultural) doesn't disqualify a property if the highest and best use is legal residential and it can be rebuilt; working farms and agricultural properties are ineligible.
Minimum square footage: 500 sq ft total living space (condotels 475 sq ft with a bedroom).
Mixed use: Not published – ask us about your scenario
5+ units / multi-property: No
Ineligible properties: Manufactured homes, mixed use, commercial, barndominiums, log homes, geodesic domes, unique properties, boarding houses/PadSplit, assisted living, agricultural/working farms, rural over 20 acres, under 500 sq ft, C5/C6 condition, under construction, tenancy-in-common properties (TIC vesting is OK), timeshares, tribal land, model-home leasebacks, vacant lots, properties listed for sale at loan purchase. Co-ops and leaseholds (where common) are eligible.
Declining markets: N/A
Appraisal, review & insurance: Full appraisal plus CDA up to $2M; two appraisals over $2M. Transferred appraisals allowed (under 60 days old at transfer, 120 at closing). Flips (resale within 365 days at 10%+ higher price) need arm's length and open marketing; second appraisal if the price rose 10% within 90 days or 20% within 91–180 days.

Rental income

Rent used on a purchase: Higher of lease or 1007 market (market capped at 20% over lease)
Rent used on a refinance: Higher of lease or 1007 (market capped at 120% of the lease; higher lease needs 3 months' receipts). Leases must be at least 12 months originally (month-to-month after expiry OK).
Vacant / unleased refinance: Allowed – use full 1007 market rent with no vacancy factor.
Short-term rental (Airbnb/VRBO): Yes
Short-term rental documentation: 12-month look-back via 12 monthly or an annual platform statement plus a screenshot of the active listing. No history needed when the appraiser confirms a short-term-rental market with no code/HOA restrictions and provides an STR-based 1007/1025 (or AMC STR analysis) for: new construction within 120 days, a seller-occupied home being converted to STR, or (by exception) a long-term rental being converted.
Short-term rental limits: 5% LTV reduction when STR income is used; minimum DSCR 1.00.

Refinance seasoning

Cash-out seasoning: One borrower on title at application. Owned under 6 months: 5% LTV reduction and value is the lower of purchase price plus documented improvements or appraisal. No wait for inherited or divorce-awarded property. Property must be off the market 1 month before application; if listed in the last 6 months, LTV uses the lower of list price or appraisal.
Delayed financing (cash purchase recoup): Allowed within 6 months of a cash purchase (arm's length, no financing, no liens, funds sourced; gifts can't be reimbursed). Loan limited to documented investment plus costs. If purchase funds were borrowed against another asset, proceeds must pay that loan down.
Recently listed for sale: Must be off the market at least 1 month before application. Rate/term listed within 3 months, or cash-out listed within 6 months: LTV uses the lower of list price or appraised value.

Other terms

Seller / interested-party concessions: Seller/interested-party contributions up to 6% at any LTV for investment properties (combined giveaways under $1,000 ignored). Excess is deducted from price.
Secondary financing: Not allowed on DSCR loans (new or existing).
State & local restrictions: Not available in Baltimore, MD or Philadelphia, PA. Prepayment penalties in NJ only for S-corp/C-corp borrowers; MI and OH priced as no prepay.

Additional details

Notes: >$1. Not permitted Baltimore MD, Philadelphia PA. Subordinate financing not allowed. Declining market −5% when LTV >65.

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