LAMD-D16 DSCR Prime 680+ | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 680
Max LTV – purchase: 80% (700, ≤$1.5M)
Max LTV – rate/term refinance: 80%
Max LTV – cash-out refinance: 75%
Minimum loan amount: $100K (<$150K: 70/65, DSCR 1.25)
Maximum loan amount: $2.5M
Cash-out (cash in hand) limit: $500K at 65% LTV or higher; $1M below 65% (total equity withdrawn; not applicable to delayed financing).
LTV reductions & overlays: 2–4 units and condos 75% purchase / 70% refi. Condotel and rural ineligible. Vacant/unleased refinance 70%. Interest-only 75% purchase/rate-term, 70% cash-out. Loans under $150K: 70% / 65% with DSCR 1.25+. Declining market and CT/IL/NJ/NY: 75% / 70%, $2M.

DSCR requirements

Minimum DSCR: 1.00
DSCR below 1.00: No
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Monthly gross long-term rent ÷ PITIA (ITIA on IO), per unit; 120% lease/market caps as on the standard tier. Minimum DSCR 1.00. STR income not allowed.

Products & terms

Products: 15/30 fixed, 5/6 7/6 10/6 ARM
Interest-only: Yes – 75% purch/RT, 70% CO
Prepayment penalty: Up to 5 yr (fixed ≥3%, declining 5%–3% in first 3 years, or 6 months' interest on prepayments over 20%); not in AK, MI, NM, OH; IL & NJ only if entity-vested; MS declining only; PA not on 1–2 units at or below $329,411 (2026).
Reserves: 6 months; 9 months over $1.5M. Cash-out counts; gift funds don't. Waived on rate/term refinances that cut the P&I payment by 10% or more with 1x30x12 or better housing history.

Borrower & credit

Housing payment history: 0x30x12 required on the primary residence and subject.
Credit events (BK, foreclosure, short sale, modification): 48 months for bankruptcy, foreclosure, DIL, pre-foreclosure, short sale, mortgage charge-off, lis pendens, notice of default.
Forbearance, deferrals & modifications: Forbearance, modification, deferral or repayment plans on any property the borrower owns are acceptable once completed, with all related obligations satisfied and at least 3 consecutive on-time payments made as of the application date of the new loan. No 12-month seasoning period applies.
Collections, charge-offs, judgments & liens: For DSCR loans, collections and charge-offs can be ignored unless they affect title. All open judgments and involuntary liens must be paid at or before closing (no subordination). IRS installment plans OK with 2+ on-time payments and no recorded lien in the subject's county. Credit counseling OK after 12 on-time months.
Tradelines & credit depth: 2 tradelines reporting 24 months (active in last 12) or 3 reporting 12 months; waived if the borrower has three credit scores. Representative score is from the borrower/guarantor with the highest score.
First-time homebuyer: No
First-time investor: Not eligible – must have owned and managed investment real estate at least 1 year in the last 3. FTHB ineligible.
Foreign national: No
ITIN borrower: No
Non-permanent resident: Yes
LLC / entity vesting: LLC, partnership or corporation formed primarily to own, finance, lease or manage real estate; US-domiciled; up to 4 members/managers; up to two entity layers allowed. Applications from members/managers representing at least 25% cumulative ownership – their credit is used for qualifying and pricing – and each must sign a full-recourse personal guaranty or be individually obligated on the Note; the guarantor must have authority to sign for the entity. Power of attorney not allowed on entity-vested loans.
Gift funds & assets: Allowed after a 10% borrower contribution; gifts can't be used for reserves. Non-borrowing spouse funds may be treated as the borrower's own funds without a gift letter.
Financed property / exposure limits: Lender exposure to one borrower/household: $5M UPB or 10 loans.
Other borrower rules: US citizens, permanent and non-permanent residents. Experienced investors only. Non-arm's-length transactions ineligible. Interest-only qualifies on the IO payment. The borrower, family and affiliated parties may never occupy the property.

Property

Eligible property types: SFR, 2-4, condo
ADUs & unpermitted additions: Same ADU rules as the standard tier: total unit count (main dwelling plus ADUs) cannot exceed four; ADUs not allowed under zoning are acceptable with insurance coverage and two comps showing the same use but earn no rent; legal ADU rent at the lower of market or actual (appraisal must show legal zoning and at least one comp with the same number of ADUs). Short-term rent from an ADU isn't allowed because STR income is ineligible on this tier.
Non-warrantable condo: Condos are reviewed under program-specific project rules rather than a warrantable/non-warrantable split. Full review (condo questionnaire) required except site/detached condos, 2-4 unit projects, 5-10 unit projects not part of a larger development or master association, and projects with an unexpired Fannie Mae CPM approval. Unit 500+ sq ft with an operable kitchen and at least one bedroom; commercial space up to 50%; no more than 20% of units 60+ days delinquent on HOA dues. Single-entity ownership: 1-4 unit projects max 1 unit; 5-10 unit projects in a master association max 2; 11-20 units max 2; 21+ units max 20%. No investor-concentration limit. Litigation acceptable only for minor matters with no safety, structural, habitability or functional impact (e.g., non-monetary disputes, insurer-defended covered claims, HOA as plaintiff for minor or already-remediated issues, past-due assessments or foreclosure, localized damage to a non-subject unit). Established projects need 90% sold, 40% owner-occupied, all phases complete and HOA turned over; new projects 50% sold and 50% owner-occupied. Projects with critical repairs, unremediated special assessments for critical repairs, or safety/habitability violations are ineligible. Projects made up entirely of detached (site) units use single-family LTVs. Project exposure limit: lesser of $5M or 25% of units (projects over 4 units).
Condotel: Not eligible.
Rural / acreage: Rural not eligible; max 5 acres.
Minimum square footage: SFR 700; 2-4 400/unit; condo 500
Mixed use: No
5+ units / multi-property: No
Ineligible properties: Manufactured/mobile homes, co-ops, timeshares and fractional ownership, boarding houses/B&B/PadSplit, healthcare/assisted-living use, properties with income-producing non-residential structures (billboards, cell towers, commercial workshops), agricultural features (vineyards, farms, ranches, orchards, equestrian), zoning violations or illegal use, domes, barndominiums, log homes not common to the area, houseboats, Native American reservation land, marijuana-related use, properties not accessible by standard roads or not suitable for year-round use, C5/C6 condition or Q6 quality, Hawaii lava zones 1–2 and coastal-erosion zones (Hawaii coastal properties subject to lender review), vacant land/land development, and unique properties with no comparable sales in the market. Also ineligible on this program: condotels and rural properties. Over 5 acres ineligible (no truncating). Leaseholds eligible where common.
Declining markets: Declining market (per appraisal or lender-designated state): max 75% purchase / 70% refinance and $2M loan (FN: 70% refi, $2M; 5–8/mixed use: no adjustment).
Appraisal, review & insurance: Full interior/exterior appraisal plus review product (or second appraisal); second appraisal required over $2M and on HPML flips (price up 10% within 90 days or 20% within 91–180 days of the seller's purchase). Transferred appraisals accepted. Escrow holdbacks not purchased.

Rental income

Rent used on a purchase: Same 120% lease/market rules as DSCR; vacant OK
Rent used on a refinance: Original appraisal showing tenant-occupied, 1007/1025 and the lease (month-to-month OK). No lease provided: max lesser of 70% or the grid. Lease/market 120% caps apply. Leases can't be with an interested party or family member.
Vacant / unleased refinance: Allowed at the lesser of 70% or the grid.
Short-term rental (Airbnb/VRBO): No
Short-term rental documentation: N/A
Short-term rental limits: Short-term rental income is not eligible.

Refinance seasoning

Cash-out seasoning: Six months of ownership to use the current appraised value; under 6 months, value is limited to price plus documented improvements (except inherited or divorce-awarded property). Not eligible if there was a cash-out within the past 6 months, for land-contract payoffs, with a POA, or if proceeds go to personal debts/taxes/judgments. Paying delinquent taxes (60+ days) or refinancing a free-and-clear property counts as cash-out. Rate/term refinances seasoned 6 months or less are also valued at the lesser of the appraisal or price plus documented improvements (same inheritance/divorce exceptions). Investment properties listed for sale in the past 6 months are eligible for cash-out only with a prepayment penalty of at least 3 years (so only where a penalty is permitted).
Delayed financing (cash purchase recoup): Allowed for cash purchases within 6 months, treated as rate/term for pricing (cash-in-hand caps don't apply, except foreign nationals). Arm's-length purchase, documented funds, no liens; loan limited to documented investment, value capped at price plus improvements.
Recently listed for sale: For all refinances, value is the lower of the lowest list price in the prior 12 months or appraisal. Cash-out on an investment property listed within the past 6 months is allowed only with at least a 3-year prepayment penalty; any active listing must be cancelled before closing.

Other terms

Seller / interested-party concessions: Investment property: interested-party contributions up to 6%, for closing costs and prepaids only (never down payment or reserves). A borrower acting as their own agent may contribute commission within the limit. Excess reduces both price and value.
Secondary financing: Allowed if subordinated and included in CLTV (HELOCs counted at the full line amount unless past the draw period); no secondary financing from an interested party on purchases. The program's max LTV/CLTV limits apply.
State & local restrictions: Not available in Baltimore City MD, Philadelphia County PA, Puerto Rico, Guam or USVI. 2–4 units not eligible in IL and NY. CT, IL, NJ, NY overlay: max 75% purchase / 70% refi and $2M (FN: 70% refi, $2M). Prepayment penalties not allowed in AK, MI, NM, OH; in IL and NJ only for entity borrowers; PA not on 1–2 units at or below about $329K; MS declining only. Texas: borrowers connected to China, Russia, Iran or North Korea are restricted – non-permanent residents from those countries cannot finance investment property, and foreign nationals domiciled there are ineligible.

Additional details

Notes: Prime-credit DSCR tier (no STR, no rural, no condotel). Some state and county exclusions apply.

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