LAMD-D24 DSCR Jumbo $2M–$4.5M | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 740
Max LTV – purchase: 65% (to $4.5M)
Max LTV – rate/term refinance: 60%
Max LTV – cash-out refinance: 60%
Minimum loan amount: $2,000,001
Maximum loan amount: $4.5M
Cash-out (cash in hand) limit: No limit.
LTV reductions & overlays: Loans $2M–$4.5M with 740+ FICO: 65% purchase, 60% rate/term and cash-out. Declining market −5%. Florida condos purchase only.

DSCR requirements

Minimum DSCR: 1.25
DSCR below 1.00: No
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Minimum DSCR 1.25. Long-term market rent only; refinance uses the in-place lease with 2 months' receipts (capped at 115% of market). IO qualifies on the IO payment.

Products & terms

Products: 5/6 ARM, 30yr fixed, IO versions
Interest-only: Yes – 10-year IO on 30-year term only (5/6 ARM or 30-year fixed); qualifies on the IO payment; not available in Illinois.
Prepayment penalty: Required – 1–5 yr options
Reserves: 18 months; cash-out may count but the borrower must also document 18 months of their own assets.

Borrower & credit

Housing payment history: 0x30x24 on the subject, primary and all mortgages on credit, with 24 months documented.
Credit events (BK, foreclosure, short sale, modification): 4 years for bankruptcy, foreclosure, short sale/DIL (forbearance/modification/deferral treated the same).
Forbearance, deferrals & modifications: Forbearance, loan modifications and deferrals are treated like a short sale / deed-in-lieu for eligibility and pricing (same seasoning as other credit events).
Collections, charge-offs, judgments & liens: Collections and charge-offs must be paid unless $1,000 or less, disputed, or past the statute of limitations – and any left open require extra reserves equal to the balance. Medical collections can stay open with no extra reserves. Liens/judgments that could attach to title must be paid before closing (cash-out can pay them); IRS installment plans with 6+ payments made and no recorded lien (or a subordinated lien) are OK.
Tradelines & credit depth: 3 tradelines reporting 12 months (2 active in the last 12 months), borrowers combined; VOM, VOR or verified installment debt count; a tradeline shared by co-borrowers counts once.
First-time homebuyer: No
First-time investor: Not permitted – must have owned an investment property at least 24 months before the note date. FTHB not permitted.
Foreign national: No
ITIN borrower: No
Non-permanent resident: No (US citizen & PRA)
LLC / entity vesting: Individuals, tenants in common, joint tenants, revocable (inter vivos) trusts, LLCs and corporations; max 4 borrowers/guarantors. Entity must be US-formed and owned by individuals; every owner with 20%+ must personally guarantee and meet credit requirements; layered LLC allowed only if no more than 2 LLCs (each owned by individuals) own the vesting LLC. Land trusts, IRAs, blind trusts and LPs not eligible.
Gift funds & assets: Gifts for down payment and closing costs only (not reserves); no gift of equity. At 80% LTV or less no borrower contribution is required. Donors: relatives, domestic partners, fiancés, former relatives or godparents (no interested parties).
Financed property / exposure limits: Up to 20 financed properties; lender caps at 6 loans or $5M per borrower.
Other borrower rules: US citizens and permanent residents; max 4 borrowers/guarantors; background check and fraud report required. Must have owned an investment property for at least 24 months before the note date. Non-arm's-length transactions not permitted.

Property

Eligible property types: SFR, 2-unit, PUD, warrantable condo, non-warrantable (no structural repair exceptions)
ADUs & unpermitted additions: One-unit homes with ONE accessory unit (full kitchen and bath) are eligible; multiple ADUs not permitted. The appraisal must show at least one comparable with the same use. ADU rent may be used on these business-purpose loans with a separate rent schedule for the ADU. Whether it's an ADU or a true 2-unit is judged by separate utilities, a separate postal address and whether it's rented. Unpermitted ADUs are not separately addressed; properties representing an illegal use under zoning are ineligible.
Non-warrantable condo: Case-by-case; FL condo purchase only
Condotel: No
Rural / acreage: Rural properties are not permitted on investment loans (rural = appraiser designation or factors like under 25% built-up, agricultural zoning, dirt road, comps over 5 miles, population under 25,000, amenities over 25 miles, 10+ acre lots, large outbuildings).
Minimum square footage: No general minimum. Condo units must be at least 500 sq ft (under 500 sq ft needs an exception with possible pricing hit on non-warrantable condos).
Mixed use: No
5+ units / multi-property: Not applicable – 1–2 units only (SFR, PUD, 2-unit, warrantable and non-warrantable condos; no exceptions for structural repairs).
Ineligible properties: Over 20 acres (10 acres standard; up to 20 if typical with comps; no truncating), condotels (except the condotel program), community land trusts, co-ops, earth-berm and dome homes, deed-restricted communities, houseboats, log homes (unless typical with 3 local comps), manufactured and modular homes, mixed use, model leasebacks, operating farms/ranches/orchards, Hawaii lava zones 1–2, illegal zoning use, hazardous materials/noxious odors/safety violations, oil and gas leases, agricultural or commercial use, reservation land, non-conforming use that can't be rebuilt, timeshares, vacant land, sinkholes. Leaseholds eligible.
Declining markets: Max LTV reduced by 5% in declining markets.
Appraisal, review & insurance: Two appraisals always required (loans exceed $2M; lower value used; different appraisers) plus an enhanced desk review (ARR, CDA, or CU 2.5 or less) (ordered by the lender). Appraisals good 120 days, 180 with a recert. Hazard policy must include at least 6 months of rent-loss coverage (deductible max 5%).

Rental income

Rent used on a purchase: Lower of in-place lease or market; vacant = market; proposed leases not accepted
Rent used on a refinance: In-place lease with 2 months' receipts, capped at 115% of market; without receipts, the lower of lease or market. Vacant properties not permitted on refinances.
Vacant / unleased refinance: Not permitted (vacant is purchase-only).
Short-term rental (Airbnb/VRBO): No
Short-term rental documentation: N/A
Short-term rental limits: Short-term rental not permitted.

Refinance seasoning

Cash-out seasoning: Owned under 6 months (acquisition to note): LTV uses the lower of original purchase price or appraisal, including delayed financing. Refinancing a cash-out loan less than 12 months old counts as cash-out. Cash-out must be for business purposes with a letter of explanation; paying taxes 60+ days delinquent is cash-out.
Delayed financing (cash purchase recoup): Yes – delayed financing allowed; if owned under 6 months (acquisition to note), LTV is based on the lower of the original purchase price or the appraised value; cash in hand limits per program apply.
Recently listed for sale: N/A

Other terms

Seller / interested-party concessions: Interested-party contributions limited to 3% on investment properties.
Secondary financing: Subordinate financing allowed if the CLTV and combined loan amount stay within the program's max LTV and it meets Fannie Mae acceptable-subordinate-financing rules. Rate/term may pay off a purchase-money second or a closed-end second seasoned 12 months (HELOCs drawn in the last 12 months not eligible). Any subordinate financing payment is included in the DSCR.
State & local restrictions: Prepayment penalty is required on investment loans (at least 1 year unless state law prohibits; hard prepay on sale or refinance). No prepayment penalty allowed in: Alaska, Kansas, New Mexico; Illinois with individual vesting and a note rate above 7.99%; New Jersey not vested in a C or S corporation with a note rate above 5.99%; Pennsylvania 1–2 units with a loan amount below $329,411; Michigan 1-unit; Ohio 1–2 units; Rhode Island purchases. Where a prepay is prohibited it must be bought out. Limitations: Cook County, IL loans under $250,000 need a 3/2/1 step-down; Minnesota not permitted at conforming loan limits; Mississippi requires a step-down prepay. Interest-only is not available in Illinois. Any non-US-citizen borrower or titleholder must be legally permitted to buy in the subject state; citizens of China, Russia or Venezuela (Maduro regime) need legal review before approval. Texas investment loans need a non-homestead affidavit.

Additional details

Notes: Second appraisal always required. Declining market −5%.

← LAMD-D23 · All programs · LAMD-D25 →