LAMD-D03 DSCR Standard (No Minimum DSCR, ITIN) | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 620
Max LTV – purchase: 80% (700+ & 680–699, ≤$1.5M)
Max LTV – rate/term refinance: 80% (limited cash-out)
Max LTV – cash-out refinance: 75% (720+/700–719, ≤$1.5M)
Minimum loan amount: $75K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: Unlimited below 55% CLTV with 680+; $1M at 55% or less under 680, at 55–65%, or above 65% with 700+; $500K above 65% under 700. Non-occupant co-borrowers can't do cash-out.
LTV reductions & overlays: DSCR 0.75–0.99: 680 FICO, 75% purchase/rate-term, 70% cash-out. DSCR under 0.75: 680 FICO, 70% / 65%. Vacant refinance: 70%. Condotel 75% (680+, $1.5M) to 65%. Any refinance (rate/term or cash-out) of a property acquired within 12 months: −5% from the grid. Quitclaim acquisition within 12 months, or a significant entity ownership change within 6 months on a refinance: 65%. ITIN: 70%, $1.5M. Condo limited review: 75% (Florida 70%). First-time homebuyer: 70%, $1M. Florida new-construction PUD 75%, condo/condotel 70%; new construction in declining markets 60%. Properties in short-term-rental communities capped lower (ask us).

DSCR requirements

Minimum DSCR: No minimum for SFR/2-4 (condo/condotel min 1.00)
DSCR below 1.00: Yes – DSCR <1 needs 680 FICO; cash-out <0.75 max 65%, 0.75–0.99 max 70%
No-ratio (no DSCR calculated): No true no-ratio option – DSCR is always calculated, but there's no minimum on SFR/PUD/2–4 units (DSCR under 1.00 needs 680 FICO and reduced CLTV); condos and condotels need 1.00.
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA (IO: ITIA qualified at the amortizing ITIA). No minimum DSCR for SFR/PUD/2–4 units (condos and condotels need 1.00). Long-term rent at 100%; month-to-month OK. A new lease above market needs 2 months' payments and is capped at 125% of market on refinances. Short-term rent counted at 75%. Leases to the borrower's own companies not accepted.

Products & terms

Products: 5/6 ARM, 30yr fixed, 40yr fixed
Interest-only: Yes – 120 mo IO, min FICO 680
Prepayment penalty: Investment only, where state law allows: charged between 6 months and 5 years after closing, equal to 6 months' interest on prepayments above 20% of the original balance. Not allowed in AK, AR, KS, MI, MN, NM, RI or OH (1–2 units, loans up to $116,356) – buydown required. Not allowed on loans to individuals in IL, NJ or VT (buy down or close in an LLC; IL max 3 years). Max 2 years in MS; 3 years in ID, MA, DC and MD (DC/MD charge is 2 months' interest). Not allowed on balances under $75K in VA and MD, or under $329,411 on 1–2 units in PA (2026). A property listed for sale in the past 12 months requires a 36-month penalty that can't be bought down.
Reserves: 3 months up to $1M, 6 months $1M–$2M, 12 months above $2M.

Borrower & credit

Housing payment history: 0x30x12 and 0x90x24. Payments on a manufactured home or second mortgage count as mortgage history.
Credit events (BK, foreclosure, short sale, modification): Bankruptcy, foreclosure, short sale, deed-in-lieu, loan modification, forbearance, deferral and 120+ day lates all count as credit events and need 48 months (bankruptcy measured from discharge/dismissal to closing). More than one bankruptcy in 7 years requires 7 years from the latest.
Forbearance, deferrals & modifications: Forbearances, deferrals and modifications are credit events (48 months). Exception: after a COVID-19 forbearance the borrower is eligible once 3 consecutive on-time payments are made by the note date.
Collections, charge-offs, judgments & liens: 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 all medical collections may stay open. On this program, any balances above those limits must be paid in full. Tax liens and court-ordered judgments must be paid in full. An IRS installment agreement may stay in place only if no federal tax lien has been filed, the agreement is documented and at least one payment has been made; otherwise it must be paid off.
Tradelines & credit depth: If the borrower doesn't have 3 credit scores: 3 tradelines reporting 12+ months or 2 reporting 24+ months, active within the last 12 months. Waived when at least one borrower has 3 scores. Authorized-user, collection/charge-off, deferred and bankruptcy-discharged accounts don't count; a 12- or 24-month housing history not on the credit report can count. Frozen bureaus must be unfrozen.
First-time homebuyer: Allowed: max $1M, 680 FICO, 70% CLTV, DSCR 1.00+, 10% own funds, no IO, no STR, payment shock under 300%. (FTHB = no ownership interest in residential or mixed-use property up to 20 units in the US in the past 3 years; entity ownership of 25%+ counts. If any borrower on the loan is not a first-time homebuyer, these limits don't apply.)
First-time investor: Not separately restricted; FTHB rules apply (680, Tier A, no STR, $1M)
Foreign national: No
ITIN borrower: ITIN borrowers eligible with 700 FICO, max 70% CLTV, max loan $1.5M and DSCR 1.00 or higher (the no-minimum-DSCR option does not apply to ITIN). No cash-out and no power of attorney. 10% of own funds required on purchases; no gifts above 80% CLTV. Needs a valid ITIN card or IRS ITIN letter plus unexpired government photo ID.
Non-permanent resident: Allowed (approved visa list; SSN and current status/EAD required). Standard FICO grid applies on purchase and rate/term; cash-out requires 700 FICO. 2-year housing history and a US bank account before clear to close required. Co-borrowers with a US citizen/permanent resident are qualified under non-permanent resident rules.
LLC / entity vesting: Individual or LLC/corporation (no series LLCs) with up to 4 owners; all owners must be borrowers and guarantors (ask us about excluding owners under 25%, or about joint tenants, tenants in common, revocable trusts and partnerships). One layer of entities allowed if the top entity owns 100% (no trust layering; max 4 individual guarantors). A significant ownership change within 6 months on a refinance is treated as a quitclaim (max 65% CLTV). Entity acquired within 12 months needs notarized acquisition docs; no ownership change during a purchase. No power of attorney when vesting in an entity.
Gift funds & assets: Allowed with a 10% minimum borrower contribution (under 80% CLTV). Overseas assets and 1031 funds eligible.
Financed property / exposure limits: No limit on other financed properties. Lender exposure: $5M or 10 loans per borrower within any 6-month span.
Other borrower rules: Single borrower: standard representative score (middle of 3, lower of 2). Multiple borrowers/guarantors: the qualifying score is the highest representative score among them, and every non-foreign-national borrower must have 680+ (ask us to confirm which score is used). No-score borrowers case-by-case. Mixed-residency loans qualify under the non-permanent-resident or foreign-national rules. Non-occupant co-borrowers can't do cash-out, and cash-out proceeds must be used for business purposes. Ineligible: irrevocable or land trusts, diplomatic immunity, residents of countries barred from doing business with US companies (e.g. OFAC-sanctioned), under 18. Power of attorney only for US citizens/permanent residents on purchase or rate/term, not when vesting in an entity.

Property

Eligible property types: SFR, PUD, 2-4, warrantable & non-warrantable condo, condotel, SFR rural
ADUs & unpermitted additions: One-unit homes with ONE ADU are eligible (multiple ADUs not permitted); the ADU needs a full kitchen and bath. Unpermitted ADUs, outbuildings and conversions are acceptable when they're excluded from the appraised value, typical for the area, and the title commitment shows no permit violations – but they earn no value. ADU rent can count when the appraisal shows zoning compliance is legal (a permit itself is not required to establish that) with at least one comp that has an ADU. Purchase: lower of 1007 or actual rent; refinance: 1007 rent with the current lease and 2 months' receipts. ADUs can't be used for short-term rent.
Non-warrantable condo: Warrantable and non-warrantable condos eligible. A limited review is allowed up to 75% LTV on investment properties (70% in Florida); higher LTVs need a full review. Limited review: single-entity ownership up to 2 units in 5–20 unit projects or 30% in 21+ units (waivable on a purchase that brings concentration to 30% or less); commercial space up to 50%; project 100% complete; established projects 90% sold and closed (new projects 75% under contract); not operated as a hotel/motel/resort; no significant deferred maintenance or disqualifying litigation; other features case-by-case. Lender finances at most 20% of units in projects over 10 units. Review waived for detached units and 2–10 unit projects not part of a master association (not condotels). Rural condos ineligible. Minimum DSCR 1.00 for condos. Florida new-construction condos capped at 70%.
Condotel: Allowed: 500+ sq ft with full kitchen and separate bedroom (kitchenettes case-by-case), no 'motel' in the name, no mandatory rental pools, no termination/bankruptcy proceedings, not rural or agricultural zoning, 660+ FICO. Lender finances at most 20% of units in projects over 10 units. Minimum DSCR 1.00.
Rural / acreage: Rural/agricultural properties allowed (rural = rural or agricultural zoning, appraiser designation, or factors like 50%+ vacant land use, 10+ acre neighbors, outbuildings, unpaved road, population under 25,000): 680 FICO, 1 unit only (one ADU allowed), neighborhood at least 25% built up, not a working farm or income-producing, max 10 acres. Rural condos and rural condotels are not eligible.
Minimum square footage: 500 sq ft of living space minimum; in 2–4 unit properties each unit must have at least 500 sq ft.
Mixed use: Not eligible – mixed-use properties (2–8 units) are on the ineligible property list.
5+ units / multi-property: No
Ineligible properties: C5/C6 or fair/poor condition, Q6 construction, under 500 sq ft (each unit), model leasebacks, private transfer covenants, commercial, co-ops, domes, geothermal homes, timeshares, over 10 acres, unique properties, assisted living, working farms/ranches/orchards, mobile and manufactured homes, 5–8 units, mixed use, incomplete properties, barndominiums. Leaseholds are case-by-case (never tribal land). Every unit needs a full kitchen with a stove or stove hookup.
Declining markets: New construction only (certificate of occupancy within 12 months of the note, builder-controlled HOA within the last 6 months, or the developer is the seller): 'declining' markets max 60% CLTV; 'over-supply' markets and marketing times over 6 months not allowed; max 5 acres; agricultural zoning ineligible; value can't exceed the top of the predominant price range by more than 10%. No separate declining-market rule for existing homes.
Appraisal, review & insurance: Full appraisal (no waivers) dated within 120 days of the note. Loans up to $2M need a secondary valuation (CU score 2.5 or less, else AVM with 90%+ confidence, else CDA, else a second appraisal at the borrower's expense) that is no more than 10% below the appraised value; loans over $2M need a second full appraisal (lower value used). One transferred appraisal accepted (not on flips; AVM support required). Condition C1–C4 and quality Q1–Q5 only. Hazard insurance at replacement cost with max 10% deductible; flood escrows can't be waived; rent-loss insurance not required. Points and fees under 7%.

Rental income

Rent used on a purchase: Lease or 1007/1025; new lease with 2 mo payments
Rent used on a refinance: Existing lease or 1007/1025 market rent. An existing lease more than 25% above the 1007 can be used in full with 2 cancelled checks; a new lease on a refinance needs 2 months' payments and is capped at 125% of 1007 market rent.
Vacant / unleased refinance: Allowed at max 70% CLTV using 1007 market rent.
Short-term rental (Airbnb/VRBO): Yes (not for FTHB)
Short-term rental documentation: 12-month average from the STR agreement/platform, or a 1007 showing STR rent. Purchases with no history may use 75% of an AirDNA Rentalizer estimate (60%+ occupancy) or 75% of a 1007 with STR comps. Not allowed on a refinance while a long-term lease is in place. Borrower signs an STR addendum and must meet local rules.
Short-term rental limits: 75% of STR income used; not available to first-time homebuyers; banned in VT and NYC boroughs (except condotels); STR-community properties subject to rate-sheet CLTV caps.

Refinance seasoning

Cash-out seasoning: Existing first mortgage must be 6+ months old. Under 6 months on title only with delayed financing, a no-value quitclaim within 12 months (max 65%), inheritance/divorce award, or time in the borrower's majority-owned LLC or revocable trust. 6–12 months: −5% from the grid, renovations must justify the value, and if listed after purchase value is the lower of list price or appraisal.
Delayed financing (cash purchase recoup): Cash purchases within 6 months: treated as cash-out; loan capped at total cash investment (price plus documented improvements); value is the lower of appraisal or cost; gifts used to buy can't be reimbursed.
Recently listed for sale: Rate/term: must be off the market by application. Cash-out: not listed within 6 months of application. Investment property listed within the past 12 months requires a 36-month prepayment penalty that can't be bought down (unless the state prohibits prepays).

Other terms

Seller / interested-party concessions: 6% at CLTV of 80% or less, 4% above. Not allowed when the purchase price exceeds list price by 3% or $5,001.
Secondary financing: Any other lien must be recorded and clearly subordinate to the new loan. Seller-held seconds not allowed; no negative amortization; a second with a balloon due within 5 years of the new first's note date is ineligible; PACE/HERO liens must be paid off at or before closing. On a rate/term refinance, a second used to buy the property can be paid off regardless of seasoning; other closed-end seconds must be 12+ months seasoned and HELOCs 12+ months with under $2,000 in draws in the last 12 months, or the loan is treated as cash-out.
State & local restrictions: Not available in Hawaii, Maryland or the US Virgin Islands. Originators without a license can't do investment loans in AZ, CA, DC, HI, ID, MD (Baltimore County/City), MI, MN, NV, NM, ND, OR, SD, UT, VA, VI or VT. Texas: visa holders who are citizens of China, Russia, Iran or North Korea are ineligible. STR income not allowed in Vermont or NYC's five boroughs (except condotels). Florida new-construction PUDs 75%, condos/condotels 70%. Prepayment penalties restricted or prohibited in several states.

Additional details

Notes: Excluded: HI, MD, VI. FL new-construction PUD 75%, condo/condotel 70%. First-time homebuyer payment shock >300% ineligible. Interested party 6% (≤80 CLTV) / 4%. Points & fees <7%. 1031 & overseas assets eligible.

← LAMD-D02 · All programs · LAMD-D04 →