LAMD-D19 DSCR Standard 0.75+ & No-Ratio | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 660
Max LTV – purchase: 80% (720+, ≤$1M, DSCR ≥1)
Max LTV – rate/term refinance: 80%
Max LTV – cash-out refinance: 75% (720+, ≤$1M)
Minimum loan amount: $100K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: Unlimited at 60% or less; $500K above 60%; cash-out max loan $2M.
LTV reductions & overlays: 2–4 units 75%; warrantable and non-warrantable condos 75% (non-warrantable max $2M); loans $2M–$2.5M 65%, $2.5M–$3M 60%. Non-permanent residents 75%, no cash-out, $2M. STR 70% and $2M. Interest-only 75% (DSCR 1.00+) or 70% (0.75–0.99), 700 FICO; not on no-ratio. Declining market −5%.

DSCR requirements

Minimum DSCR: 0.75 (no-ratio also allowed)
DSCR below 1.00: Yes – 0.75–0.99: 740/720 → 75/75/70 (≤$1M); 700 → 75/75/65; 680 → 70/70/60; 660 → 60/60/60
No-ratio (no DSCR calculated): Yes – 740: 75/75/65 (≤$1M), 70/70/60 ($1.5M), 65/65/60 ($2M); 720: 70/70/60; 700: 65/65/60; 680: 65/60/60; 660: 60/60/60. No IO
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA (ITIA for IO) at the note rate. Lower of lease or market; a higher lease needs 3 consecutive months' receipts. DSCR down to 0.75, or no-ratio (no DSCR) at lower LTVs (e.g., 75% purchase at 740 to $1M).

Products & terms

Products: 3/6, 5/6, 7/6, 10/6 ARM; 15/30 fixed; 40yr IO
Interest-only: Yes – 10/20 & 10/30 IO; DSCR ≥1: 700 FICO, 75%; DSCR ≥0.75: 700, 70%; none on no-ratio; $2–2.5M 65%, $2.5–3M 60%
Prepayment penalty: Per state law
Reserves: 3 months $100K–$500K; 6 months to $2M; 9 months to $3M; none for other properties; cash-out counts.

Borrower & credit

Housing payment history: 0x30x12 on the subject and primary residence (verified even if the borrower isn't on the note or title).
Credit events (BK, foreclosure, short sale, modification): 3+ years from housing events; multiple bankruptcies not permitted.
Forbearance, deferrals & modifications: N/A
Collections, charge-offs, judgments & liens: Judgments/liens affecting title must be paid. Non-title collections/charge-offs within 3 years over $5,000 (individually or combined) must be paid; medical under $15,000 can stay. IRS plans OK if current and not liened. Past-due accounts brought current; no one currently in credit counseling/debt management. 60-day consumer lates within 4 years need an explanation. Credit can't be frozen.
Tradelines & credit depth: N/A
First-time homebuyer: No – FTI may not be FTHB
First-time investor: Allowed with DSCR above 1.00, 700+ FICO, no exceptions, max $2M; can't be a first-time homebuyer. Otherwise 12 months of ownership/management in the last 36 with an experience letter.
Foreign national: No
ITIN borrower: No
Non-permanent resident: Yes – 75% max, no cash-out, max $2M
LLC / entity vesting: LP, GP, Corp, LLC with personal guaranty; layered entities must trace to individuals
Gift funds & assets: Family gifts allowed; not on NOO >80% LTV; not for reserves
Financed property / exposure limits: Up to 20 financed residential properties; lender exposure $7.5M or 10 properties per borrower (not applicable to the cross-collateral program). No extra reserves for other properties on DSCR.
Other borrower rules: Personal recourse/guaranty required. No additional borrowers may join the entity on title. Builder refinances where the builder built 4+ units in the project, or new construction with a borrower-builder relationship, are ineligible.

Property

Eligible property types: SFR (attached/detached/modular), PUD, townhouse, 2-4 (max 75%), warrantable & non-warrantable condo, leasehold
ADUs & unpermitted additions: Single-family homes with ADUs follow Fannie Mae's ADU rules (legal ADUs acceptable). Multiple dwellings on one lot are ineligible except legal ADUs. Unpermitted additions/alterations are judged under Fannie Mae rules – generally acceptable if typical for the market, well built and not given full value – rather than an automatic decline. Rent is the lower of lease or 1007 market rent.
Non-warrantable condo: Non-warrantable condos allowed (where the program permits) with no stacking of features: single-owner concentration up to 30%, commercial up to 49%, investor concentration up to 70%, HOA delinquencies up to 25% (including special assessments), reserves at least 10% (no exceptions), common areas complete, no mandatory dues, no first-mortgagee priority issues, adequate flood coverage. Developer-controlled HOAs by exception. Non-structural litigation within 25% of reserves or insurer-defended.
Condotel: Not eligible; co-ops not allowed.
Rural / acreage: Max 20 acres; rural not specifically excluded
Minimum square footage: Not published – ask us about your scenario
Mixed use: No
5+ units / multi-property: No
Ineligible properties: Manufactured homes, 5+ units, log homes (faux-log by exception), condotels/motels, projects with registration services or limits on owner occupancy, unique properties, mixed use, model leasebacks, boarding houses, group homes, timeshares/fractional, assisted living, mandatory country-club memberships, zoning violations, under construction, barndominiums, agricultural zoning (by exception), Hawaii lava zones 1–2, multiple dwellings on one lot (legal ADUs OK), working farms, C5/C6, live/work condos, earth-berm homes, domes, houseboats, reservation land, marijuana use, theme-park resort properties. Leaseholds OK; max 20 acres.
Declining markets: 5% reduction to the LTV caps (declining per appraisal or any third-party valuation).
Appraisal, review & insurance: Escrow holdbacks not allowed. Disaster-area damage over $2,000 or affecting habitability is ineligible. Rent-loss insurance of 6 months required. Manual underwriting.

Rental income

Rent used on a purchase: Lower of lease or 1007 market rent
Rent used on a refinance: Higher lease allowed with 3 consecutive months' receipt
Vacant / unleased refinance: Not eligible unless recently renovated to rent (appraiser confirms with photos) – then 1007 market rent.
Short-term rental (Airbnb/VRBO): Yes – purchase & refi, max $2M
Short-term rental documentation: Must be legal and common for the area. Purchase: 100% of the appraiser's STR market rent (1007 or supplemental form by the same appraiser). Refinance: lower of appraiser's figure or the full 12-month actual history from Airbnb/VRBO/a property manager.
Short-term rental limits: Max 70% CLTV, DSCR 1.00, $2M max.

Refinance seasoning

Cash-out seasoning: 6+ months of ownership (acquisition to note). Owned 6–12 months: LTV on the lower of purchase price plus documented improvements or appraisal. Refinancing a cash-out loan less than 1 year old counts as cash-out. Inherited or divorce-awarded properties have no seasoning. Cash-out for business purposes only (no renovations that make it uninhabitable). No POA on cash-out or entities.
Delayed financing (cash purchase recoup): Yes – cash purchase within 180 days, arm's length
Recently listed for sale: If listed within 6 months of the note date: not listed at application, with a borrower letter and listing cancellation. Multiple listings within 12 months are ineligible.

Other terms

Seller / interested-party concessions: Interested-party contributions up to 6%.
Secondary financing: N/A
State & local restrictions: N/A

Additional details

Notes: Grid DSCR ≥1: 740/720 → 80/80/75 (≤$1M), 75/75/70 ($1.5M), 75/75/60 ($2M), 70/70 ($2.5M), 65/65 ($3M); 700 → 75/75/70 ($1M), 70/70/60 ($2M), 65/65 ($2.5M); 680 → 75/75/65, 70/70/60, 65/65; 660 → 70/70/65, 65/65/60, 60/60. Professional investor = 12 mo experience in last 36. Rent loss insurance 6 mo. No temp buydowns. Declining market −5%. Co-ops not allowed.

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