LAMD-D08 DSCR Standard (No Minimum DSCR) | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 640
Max LTV – purchase: 85% (720, ≤$1.5M)
Max LTV – rate/term refinance: 85% (720, ≤$1.5M)
Max LTV – cash-out refinance: 80% (720/700, ≤$1M)
Minimum loan amount: $100K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: Unlimited.
LTV reductions & overlays: Investment property types: condo 85% purchase / 80% cash-out; non-warrantable condo 80% / 75%; condotel 75% / 70% (max $2M); 2–4 units 80% / 75%; modular 75% cash-out; rural 80% / 75%. Housing: 0x60x12 −5%; 0x90x12 not allowed. Foreclosure/short sale/DIL: 36 months standard, 24 months −5%, 12 months −15% and no cash-out. Bankruptcy: 24 months −5%, 12 months −5% and no cash-out. DSCR 0.75–0.999: −5%, 680 FICO, cash-out 70%. DSCR under 0.75: −5% at 700 FICO or −10% at 680, refi max $2M, cash-out 70%. STR −5%. Reduced reserves −5%. Foreign national −5% ($1.5M, 660). Declining market −5%. Cash-out within 6 months of purchase −5%.

DSCR requirements

Minimum DSCR: None – DSCR <0.75 allowed with LTV cuts
DSCR below 1.00: Yes – 0.75–0.999: −5% LTV, 680 FICO, CO max 70%
No-ratio (no DSCR calculated): DSCR 0–0.749: −5% LTV with 700 FICO or −10% with 680; max $3M, refi max $2M, CO 70%; 2-4 units in IL/NY ineligible
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA at note rate (IO uses the initial IO payment). Unleased purchase uses the 1007. Leased: lower of lease or market; a higher lease with 3 months' receipts; a higher market rent up to 120% of the lease (lease $1,400, market $1,800 → $1,680). DSCR can go below 0.75 at reduced LTVs.

Products & terms

Products: 15/30/40 fixed, 30/40 IO, 5/6 & 7/6 SOFR ARM
Interest-only: Yes – max 80%; 10-yr IO on 30/40-yr fixed and 5/6, 7/6 ARM
Prepayment penalty: Optional, per state law
Reserves: 6 mo (≤$1M); 9 mo ($1–2M); 12 mo (>$2M); reduced reserves −5% LTV; cash-out may count

Borrower & credit

Housing payment history: Up to 1x30x12 at full LTV; 0x60x12 −5%; 0x90x12 not allowed. A housing history is required on all investor products.
Credit events (BK, foreclosure, short sale, modification): Foreclosure, short sale, deed-in-lieu and bankruptcy allowed as soon as 12 months after (with LTV cuts and no cash-out); 24 months −5%; 36 months standard. No multiple events within 7 years. Bankruptcies must be settled by application.
Forbearance, deferrals & modifications: Forbearance with all payments made: reinstated, no waiting period. Missed payments: reinstated plus 3 on-time payments after forbearance (missed payments may have been added to the balance). Borrower explains the hardship.
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; all medical and time-barred collections can stay. Judgments, garnishments and liens must be paid. Tax liens not affecting title may stay with title sign-off, a repayment plan with 6 on-time payments, and (refinances) a subordination. Credit counseling OK after 12 months.
Tradelines & credit depth: N/A
First-time homebuyer: Yes – as first-time investor FTHB: 75%, 700 FICO, DSCR 1.00, 12 mo reserves, $1.5M, 12 mo housing history
First-time investor: Allowed (hasn't owned an investment property 12 months within 36): 660 FICO, $1.5M, 6-month primary mortgage history (spouse's or free-and-clear profile OK), no gifts. First-time homebuyers can also qualify: 75%, 700 FICO, DSCR 1.00, 12 months' reserves, $1.5M, 12-month housing history (not foreign nationals).
Foreign national: DSCR only: −5% LTV, max $1.5M, 660 FICO or grid, DSCR 1.00. SFR, 2–4 units and warrantable condos only; no rural; max 2 acres; no gifts or POA. Passport plus visa/I-797 (Visa Waiver countries exempt).
ITIN borrower: Not published – ask us about your scenario
Non-permanent resident: Yes – with US credit
LLC / entity vesting: LLC, partnership or corporation vesting allowed
Gift funds & assets: Allowed toward down payment and costs (not for first-time investors or foreign nationals).
Financed property / exposure limits: No limit on financed investment properties; lender exposure $7.5M or 10 properties per borrower; condo project exposure the lesser of $5M or 15%.
Other borrower rules: N/A

Property

Eligible property types: SFR, condo, townhouse, PUD, modular, non-warrantable condo, condotel, rowhouse, 2-4, rural
ADUs & unpermitted additions: ADU rent can count when the appraisal shows zoning compliance is legal – permits are NOT required to establish that – with at least 2 sales comps that have an ADU and 1 rent comp with an income-producing ADU. Case-by-case: a 1-unit with up to 3 ADUs, a 2-unit with up to 2, a 3-unit with 1; no ADUs on 4-units. Purchase: lesser of 1007 or lease; refinance: 1007 market rent plus the current lease and 2 months' receipts. Multiple dwellings on one lot are ineligible other than legal ADUs.
Non-warrantable condo: Non-warrantable condos allowed with ONE non-warrantable factor: commercial space under 50% (subject unit fully residential), new projects 50% sold with common areas complete, HOA delinquencies up to 20%, developer control with defined turnover, reserves at least 5%, investor concentration up to 60% (higher with a rental history), single-entity ownership up to 50%, non-structural litigation case-by-case. Ineligible: timeshares/occupancy restrictions, live/work, manufactured projects, conversions under 2 years, over 50% non-residential, common-interest apartments, safety litigation. Borrower limited to 2 units (5–20 unit projects) or 10% of larger projects.
Condotel: Allowed as non-warrantable: full-size kitchen (fridge, stove, oven), a bedroom (no studios), 500+ sq ft, investor concentration up to 100%. Ineligible: 'hotel' or 'motel' in the name, converted hotels/motels, projects under 10 units, or locations outside a resort/destination area (beach, ski, lake).
Rural / acreage: Rural allowed: 80% purch/RT, 75% CO; max 20 acres
Minimum square footage: 600 sq ft (1-unit); 500 sq ft condo
Mixed use: Not published – ask us about your scenario
5+ units / multi-property: No
Ineligible properties: Agricultural zoning (case-by-case), co-ops, Hawaii lava zones 1–2, hobby farms/income-producing acreage, houseboats, manufactured/mobile homes, multiple dwellings on one lot (legal ADUs OK), oil/gas leases (case-by-case), unique properties, working farms/ranches/orchards, room-and-board, assisted living. Single-unit minimum 600 sq ft; year-round use with permanent heat; deferred maintenance under $2,000; over 20 acres case-by-case.
Declining markets: 5% reduction to the maximum LTV.
Appraisal, review & insurance: Up to $2M: one appraisal plus AVM (or CU 2.5 or less); desk review if AVM confidence under 90% or CU over 2.5; field review if variance over 10% (second appraisal if field review is 5%+ low). Over $2M: two appraisals. Holdbacks for cosmetic/weather items only (150% of bid, max $10K).

Rental income

Rent used on a purchase: Market rent (unleased OK)
Rent used on a refinance: Lower of lease or 1007; higher lease with 3 mo receipts; market up to 120% of lease
Vacant / unleased refinance: Allowed – single-unit vacant refinances (rate/term or cash-out) use the 1007 rent. 2–3 units may have 1 vacant unit; 4-units up to 2 (1 if DSCR is under 1.00).
Short-term rental (Airbnb/VRBO): Yes
Short-term rental documentation: Nightly-rate rentals in an established STR market (confirmed by appraisal; not where local rules restrict STRs). Purchase: 1007 or AMC STR analysis (AirDNA data allowed). Refinance: 12-month average including zero months (or 12 monthly/annual platform statements); without 12 months of documentation the property is treated as unleased. Gross rents reduced 20%.
Short-term rental limits: 5% LTV reduction and 20% rent haircut.

Refinance seasoning

Cash-out seasoning: Rate/term: no seasoning. Cash-out: after 6 months uses current value; under 6 months −5% and value is the lower of appraisal or price plus improvements. Previously listed properties must be off market 1 month before application (DSCR with a prepay: no seasoning).
Delayed financing (cash purchase recoup): Yes – per FNMA
Recently listed for sale: Must be off the market by application; cash-out needs 1 month since delisting unless the DSCR loan carries a prepayment penalty.

Other terms

Seller / interested-party concessions: Interested-party contributions up to 6% of the lower of price or value on investment properties, for closing costs/points only.
Secondary financing: Allowed with CLTV at the max LTV; the second-lien payment is included in DSCR.
State & local restrictions: All states, except loans failing the NY subprime test; 2–4 unit DSCR under 0.75 not eligible in IL or NY. Florida foreign-national purchases subject to SB 264 restrictions (China, Russia, Iran, North Korea, Cuba, Venezuela, Syria).

Additional details

Notes: Grid DSCR ≥1 (purch-RT/CO): ≤$1M 720 85/80, 700 80/80, 680 80/75, 660 75/75, 640 75/70; $1–1.5M 720 85/75, 700 80/75, 680 80/75, 660 75/70, 640 65/65; $1.5–2M 720 75/70, 700 75/70, 680 70/65, 660 70/65, 640 65/65; $2–2.5M 720/700/680 70/65; $2.5–3M 720/700 70/65, 680 65/60. Condo 85/80; 2-4 & rural 80/75; modular CO 75. STR −5%. Seller concessions 6%. Experienced investor = 12 mo of last 36. Housing history required.

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