LAMD-D09 DSCR Standard 0.75+ | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 660 (additional borrowers 640)
Max LTV – purchase: 80% (720, $125K–$1.5M; 700 ≤$1M)
Max LTV – rate/term refinance: 80% (720, ≤$1M)
Max LTV – cash-out refinance: 75% (720, ≤$1M); 700: 70%
Minimum loan amount: $75K ($75K–$125K requires DSCR 1.00; ≤$100K max 70%)
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: Unlimited at 60% LTV or less; above 60%, $1M (or unlimited with 18 months of reserves excluding cash-out).
LTV reductions & overlays: 1x30x12 housing: −5%. 2 units refinance 80%; 3–4 units refinance 75% (70% if DSCR under 1.00). All condos (warrantable and non-warrantable): 80% purchase/rate-term at 720+ (75% under 720), cash-out 75% at 720+ (70% under 720). Condotels: max $2M; 75% purchase/rate-term at 700+ (70% at 680), cash-out 70% / 65%. Florida condos 75% max on cash-out. STR: lesser of 75% or the grid, DSCR 1.15. Rural properties only in resort areas: 65% max with DSCR 1.00. IO max 80% (700 FICO if DSCR under 1.00). Declining market −5% above 65%.

DSCR requirements

Minimum DSCR: 0.75 (STR 1.15; <$125K 1.00)
DSCR below 1.00: Yes – 0.75–0.99: 740 → 75/75/70 ($1M–1.5M), 75/75/60 ($2M); 720 → 75/75/70 ($1M), 70/70/65 ($1.5M), 65/65 ($2M); 700 same as 720; 680 → 65/65/60 ($1M)
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Gross rent ÷ fully amortizing PITIA (ITIA on IO). Minimum DSCR 0.75 (1.00 for loans under $125K; 1.15 for STR). Purchase: market rent (property may be vacant). Refinance: lesser of lease or market needs nothing more; a higher lease needs 2 months' receipts (not prepaid; not for monthly/seasonal rentals); seasonal/monthly rentals use a 12-month average; a vacant unit in a 2–4 uses 100% of market.

Products & terms

Products: 15/30 fixed, 30yr fixed IO (10-yr IO); 2-1 buydown on 30-yr fixed purchases only (680+, DSCR ≥0.75, qualify at note rate, seller/builder funded; lender-paid or third-party only for correspondents)
Interest-only: Yes – 30yr fixed IO, max 80%; 700 FICO if DSCR <1
Prepayment penalty: Required on investment where permitted (no-prepay option affects pricing)
Reserves: 3 months PITIA/ITIA up to $500K; 6 months over $500K to $2M; 12 months over $2M; 2–4 units at 80% LTV need at least 6 months. Cash-out proceeds may be used. Add 3 months (not from cash-out) if waiving rent-loss insurance. Cash-out above 60% LTV with more than $1M cash in hand requires 18 months of reserves, not counting the cash-out proceeds.

Borrower & credit

Housing payment history: 0x30x12 – no reduction; 1x30x12 – 5% LTV reduction. Subject and primary payments not on credit need an institutional VOM/VOR.
Credit events (BK, foreclosure, short sale, modification): 2 years' seasoning from foreclosure, deed-in-lieu, short sale, forbearance, modification, 1x120, charged-off second lien, or bankruptcy (Ch. 7/11/13). Chapter 13: if discharged, measured from filing and must be discharged before closing; if dismissed, from dismissal. Unrelated multiple significant events ineligible; credit must be re-established.
Forbearance, deferrals & modifications: Forbearance is treated as a housing event and must meet the program's housing-event seasoning (unless caused by a FEMA-declared disaster).
Collections, charge-offs, judgments & liens: Collections and charge-offs under 24 months old totaling up to $5,000, all medical collections, and factoring-company collections (original debt verifiable) may stay open; any remaining balance may stay open only if covered by reserves beyond the program requirement, otherwise it must be paid. Judgments and liens must be paid at or before closing. IRS repayment plans OK if no lien filed, approved plan provided, and 2+ timely payments made.
Tradelines & credit depth: All borrowers with 3 credit scores: tradelines waived. With 2 scores: standard tradelines required — 3 tradelines reporting 12+ months or 2 reporting 24+ months (activity in last 12 months), or a 24-month mortgage history on credit with 0x30x12; only the primary borrower must meet it and spouses may combine; no tradeline over 0x60 in 12 months; authorized users, collections/charge-offs and deferred loans don't count. Fewer than 2 scores: ineligible.
First-time homebuyer: No
First-time investor: Allowed with DSCR 1.00+ and 700 FICO, no exceptions; can't be a first-time homebuyer.
Foreign national: No
ITIN borrower: No
Non-permanent resident: Allowed with US credit (ITIN, DACA, foreign nationals ineligible on this tier).
LLC / entity vesting: Yes; qualifying member ≥25% ownership
Gift funds & assets: After a 5% borrower contribution at any LTV; not for reserves; no gift of equity.
Financed property / exposure limits: Lender exposure per borrower (incl. entities/guarantors): lesser of $10M or 10 loans in aggregate, and $5M or 5 cash-out/5–8 unit loans. No published cap on the number of financed properties for this program.
Other borrower rules: Property can't be occupied by the borrower, any LLC member or family; no single-room or boarder leases. Renters need an active lease; the primary should be in a different area or superior to the subject. Rent-loss insurance of 6 months (or 3 extra months of reserves not from cash-out).

Property

Eligible property types: SFR, PUD, townhome, 2-4, warrantable & non-warrantable condo, condotel
ADUs & unpermitted additions: Homes with one or more ADUs (granny units, in-law suites) are acceptable when typical for the market and the property conforms to zoning. The ADU does NOT have to be permitted, as long as the appraiser says it's a legal use of the property and was built skillfully; legal non-conforming is fine if it doesn't hurt value. Two comps with a similar setup are required. Multiple ADUs are OK where the municipality allows them and the appraiser confirms compliance. The ADU must be substantially smaller than the main house, or the property is treated as 2–4 units. If any of these aren't met, the ADU gets no value. ADU rent can count when these rules are met and market rent is on the 1007. Unpermitted additions/modifications: appraiser comments they look professionally done and the use conforms to zoning.
Non-warrantable condo: Non-warrantable condos allowed (where the program permits): one owner may finance 2 units in 5–20 unit projects; commercial up to 50%; HOA delinquencies up to 25%; investor concentration up to 70% (higher for investment purchases); single-entity ownership up to 49% (developer-held units for sale excluded; 50%+ by exception); developer control OK with defined turnover; mandatory outside club dues OK; non-structural litigation. Leasehold condos are ineligible.
Condotel: Allowed: max $2M; 75% purchase/rate-term at 700+ (70% at 680), cash-out 70% / 65%. Must be in a resort area or affiliated with a national hotel chain; full-size kitchen and at least one separate bedroom (studios case-by-case; units under 400 sq ft need similar-size comps). Condotel = run as a hotel, hotel/motel/resort/lodge name, front desk/housekeeping rentals, a hotel conversion, or marketed as a hotel. Short-term rental ability alone doesn't make it a condotel.
Rural / acreage: Rural properties (under 25% built-up, agricultural zoning nearby, dirt road, comps over 5 miles, population under 25,000, amenities over 25 miles, 10+ acre lots, large outbuildings) are considered only in resort areas (beach, ski, golf or other major recreation communities), at max 65% LTV and DSCR 1.00+; must not be agricultural or income-producing, can't receive farm/idle-acreage tax breaks, and must be year-round. Max 5 acres for non-rural properties; acreage and land value must be typical for the market.
Minimum square footage: No minimum (full kitchen required; condos <400 sq ft need similar comps); 5–8 units 400 sq ft/unit
Mixed use: No
5+ units / multi-property: No
Ineligible properties: Container homes, assisted living, Baltimore City row homes, boarding houses, farms/hobby farms, leasehold condos, farm tax-abatement properties, rent-controlled properties (annual-increase caps alone are OK), unique properties (earth/berm, domes, barndominiums, churches), timeshares, C5/C6 condition (C4 reviewed; no structural deferred maintenance), 2+ detached homes on one lot unless typical with comps, blanket mortgages. Log-façade homes OK with comps (not true log cabins). Co-ops and manufactured homes: limited availability. Islands without a bridge case-by-case.
Declining markets: 5% LTV reduction when LTV is above 65%.
Appraisal, review & insurance: Full interior/exterior appraisal with 1007/1025 rent schedule (or AMC short-term rental analysis); second full appraisal for loans over $2M (lower value used). Appraisal review product required unless a second appraisal is obtained (CU/LCA score 2.5 or less — not allowed on cash-out above 75% LTV; HouseCanary AVM; desk review within 10%; field review; or second full appraisal). Field review required in Memphis TN and for Brooklyn investment properties. Appraisals over 120 days old need a 1004D recertification (365-day max). C3 condition generally expected; C4 must be justified for marketability; C5/C6 and structural deferred maintenance ineligible; property should be free of deferred maintenance and excessive clutter. Rent-loss insurance of 6 months PITIA required (blanket OK), or waived with 3 extra months of reserves not from cash-out.

Rental income

Rent used on a purchase: Market rent
Rent used on a refinance: Lesser of lease or market; higher lease w/ 2 mo receipt (not for monthly/seasonal)
Vacant / unleased refinance: Refinances must be leased, except STRs, recently built/rehabbed properties, delayed financing, or 1 vacant (listed) unit in a 2–4. No cash-out on unleased rehabbed properties or delayed financing under 720 FICO.
Short-term rental (Airbnb/VRBO): Yes
Short-term rental documentation: Any of: 1007/1025 with STR rents, an AMC STR analysis (with comp addresses), or a 12-month look-back of receipts (bank or platform statements) plus a 1007/STR analysis. Seasonality must be addressed or a 50% vacancy factor applies. Refinances must be actively marketed as STR. Third-party proof (Property Guard, Vrolio) that STRs are allowed. Purchase or refinance.
Short-term rental limits: DSCR 1.15 minimum; LTV lesser of 75% or the grid; not in NYC.

Refinance seasoning

Cash-out seasoning: 6 months from the most recent transaction (except delayed financing).
Delayed financing (cash purchase recoup): Yes
Recently listed for sale: Investment properties must be off the market before closing when the new loan has a prepayment penalty (before application if no prepay). Cash-out on a recently listed property is not allowed without a prepayment penalty (must be rate/term). If listed within 6 months, value is the lower of appraisal or lowest list price.

Other terms

Seller / interested-party concessions: Interested-party contributions up to 6% of the lower of price or value on investment properties; giveaways under $1,000 ignored; excess deducted from price.
Secondary financing: Not permitted.
State & local restrictions: Investment properties ineligible in DC; Charlotte, Lee, Hendry and Glades Counties FL; Indianapolis IN; Paterson NJ; Lubbock TX. All loans ineligible in Cook County IL, Baltimore City MD, Orange County NY and Philadelphia ZIP codes 19121, 19122, 19123, 19125, 19130, 19132, 19133 and 19140; Philadelphia row homes not permitted. Florida: foreign nationals, ITINs and non-permanent residents from China ineligible. Texas: investment properties ineligible for foreign nationals, ITINs and non-permanent residents from China, Russia, Iran and North Korea (non-permanent residents from those countries are primary-residence only). Hawaii: limited availability. STRs not allowed in NYC's five boroughs. Brooklyn investment properties and all Memphis TN properties need a field review from a different AMC (appraisal transfers not accepted). Puerto Rico, Guam, USVI ineligible.

Additional details

Notes: 2-unit refi max 80%; 3-4 unit refi 75% (DSCR ≥1) / 70%. Rent loss insurance 6 mo PITIA (or +3 mo reserves). Declining market −5% when LTV >65. C3 condition expected. Grid ≥1.00 (purch/RT/CO): 720 → ≤$100K 70/70/65, ≤$125K 75/75/70, ≤$150K 80/80/75, $1M 80/80/75, $1.5M 80/75/70, $2M 75/75/60, $2.5–3M 70/70/60; 700 → ≤$100K 70/70/65, ≤$150K 75/75/70, $1M 80/75/70, $1.5M 75/75/70, $2M 70/70/60, $2.5–3M 70/70/60; 680 → ≤$100K 70/70/65, ≤$150K 75/75/70, $1.5M 75/75/70, $2–2.5M 70/70/60; 660 → ≤$150K 70/65/60, $1M 70/70/60, $1.5M 70/70/55, $2M 65/55/50. Grid 0.75–0.99 DSCR (purch/RT/CO): 740 → $1M 75/75/70, $1.5M 75/75/70, $2M 75/75/60; 720 → $1M 75/75/70, $1.5M 70/70/65, $2M 65/65/no cash-out; 700 → $1M 75/75/70, $1.5M 70/70/65, $2M 65/65/no cash-out; 680 → $1M 65/65/60.

← LAMD-D08 · All programs · LAMD-D10 →