LAMD-D26 DSCR Standard 0.70+ (ITIN & Foreign National) | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 620
Max LTV – purchase: 85% (720, ≤$1M)
Max LTV – rate/term refinance: 80% (700+ FICO up to $1.5M; 680+ FICO up to $1M)
Max LTV – cash-out refinance: 75% (700+ FICO, up to $1.5M). Under 700 FICO, cash-out is capped at 70%.
Minimum loan amount: $100K
Maximum loan amount: $2.5M (exceptions to $3.5M / $4.5M)
Cash-out (cash in hand) limit: No limit; <700 FICO cash-out capped 70%
LTV reductions & overlays: Cash-out under 700 FICO: 70%. DSCR under 1.00: 75%; DSCR 0.85 or lower: 70%. Credit event 2–4 years old: 70% and $1.5M. Short-term rental: −5% (max 70%). Vacant refinance: rate/term −5% (max 70%, waived if just renovated), cash-out −10%. AirDNA-qualified: 80% purchase, 70% rate/term, 65% cash-out. Purchase qualified on a post-closing rent increase: 70%. Declining market (per appraiser): −5% off the program maximum. Non-warrantable condo 80% (recreational lease/club membership feature: 75% purchase / 70% refi). Condotel 75%. Co-op 75% purchase/rate-term, 70% cash-out (720 FICO). Mixed use 75% purchase / 70% refinance. Faux log home 75% (70% cash-out). Seasonal property 65%. Manufactured (exception) 60%, no cash-out. First-time investor 80% (70% under the property-management waiver). Non-permanent residents 75% purchase / 70% cash-out (ask us about higher); ITIN/DACA 75%; foreign nationals 75% purchase / 70% cash-out (ask us to confirm above 70%). 1x30x12 housing capped at 80%.

DSCR requirements

Minimum DSCR: 0.70 floor
DSCR below 1.00: Yes – ≤70 LTV & 680+: purchase no min, refi 0.75; 70–75 LTV purchase 0.75 (680+); DSCR ≤0.85 max 70%; <0.70 ineligible
No-ratio (no DSCR calculated): Not offered – DSCR is always calculated. The 'no minimum DSCR' tier (purchase at 70% LTV or less with 680+ FICO) is still subject to the 0.70 floor, and all applicants must own their primary residence if DSCR is under 0.75.
How DSCR and qualifying rent are calculated: Gross rent ÷ PITIA (ITIA on IO). IO payment is used to qualify only at 75% LTV or less with 700+ FICO; otherwise the fully amortizing payment. Minimum DSCR depends on LTV/FICO: at 70% LTV or less with 680+ FICO a purchase has no minimum (refi 0.75); 70–75% LTV purchase with 680+ needs 0.75; above 75% LTV, under 680 FICO, or most refis need 1.00. DSCR under 0.70 ineligible; under 0.75 requires all applicants to own their primary. STR 1.00 (1.15 above 75% LTV); mixed use 1.15.

Products & terms

Products: 5/6, 7/6, 10/6 ARM; 15- and 30-year fixed; interest-only (10-year IO) on 30- or 40-year fixed and on 30-year 5/6 or 30/40-year 7/6 and 10/6 ARMs
Interest-only: Yes – 10-yr IO, min 680
Prepayment penalty: Investment properties where legal; 1–5 year terms, fixed 5% or declining (5/4/3/2/1%), not waived on sale. Not allowed in AK, KS or NM; state-specific limits in MI, MN, MS, NJ (entity vesting required), NC, OH, PA, RI and VA. Loans with DSCR under 1.00 and LTV over 70% must carry at least a 1-year PPP.
Reserves: 4 months up to $1M, 6 months to $2M, 12 months to $3.5M; +3 months if DSCR under 1.00; +6 months above 80% LTV; +6 months if post-closing rent increases are used. Cash-out can count up to 75% LTV. No reserves for other REO.

Borrower & credit

Housing payment history: 1x30x12 on the primary residence and subject (refi) – may carry a pricing hit and caps at 80%. Other REO only reviewed if mortgages report on credit. No forbearance in the last 12 months.
Credit events (BK, foreclosure, short sale, modification): Foreclosure, short sale, deed-in-lieu, short payoff, bankruptcy (any chapter, discharged or dismissed), a 1x120 mortgage late (seasoned from when brought current) and hardship modifications: 4+ years is standard; 2–4 years allowed at max 70% and $1.5M; under 2 years ineligible. Events must be completed before application. Multiple events within 7 years not permitted. No active bankruptcy, NOD or lis pendens. A COVID-forbearance exit modification or a non-hardship maturity extension doesn't count.
Forbearance, deferrals & modifications: No forbearance plan within the 12 months before application. COVID forbearance with no missed payments is fine once reinstated; with missed payments, the loan must be reinstated with 3 on-time payments after the forbearance ended (or deferred balance paid off with documented funds).
Collections, charge-offs, judgments & liens: Under the standard lender-tier overlay, non-medical collections/charge-offs must be paid if any single one is $1,000+ or the total is $2,000+; statute-expired collections can be excluded with proof; medical collections can stay open regardless. Judgments and tax liens must be paid at or before closing, or kept open with a repayment plan showing 6 months of on-time payments (payment included in the DSCR, subordinated if recorded), or totaling $25,000 or less with title confirming no effect on the subject; expired unrenewed judgments can be excluded with title confirmation. Cash-out can pay them. Credit counseling doesn't disqualify.
Tradelines & credit depth: 3 tradelines reporting 12+ months with one active in the last 12 months, or 2 tradelines when there's a satisfactory 12-month mortgage rating within the last 24 months plus one open tradeline reporting 24 months. Authorized-user, deferred and collection accounts don't count. Borrowers with no or limited FICO are ineligible.
First-time homebuyer: No
First-time investor: Three paths: (1) property-management waiver – licensed PM company, 700 FICO, 70% max, DSCR 1.00, 0x30x12; (2) purchase – 680 FICO, 80% max, DSCR 1.00 on a 30-year amortizing payment, 0x30x12, no recent forbearance, must own (not rent) their primary; (3) refinance – same plus the subject acquired within 12 months with 3+ months of consecutive rent receipts. Not for foreign nationals, mixed use or cross-collateral loans. FTHBs not permitted.
Foreign national: Allowed at max 75% purchase (DSCR 0.75 above 70%; no minimum at 70% or less) and 70% cash-out/refinance (DSCR 0.75), loan amount up to $3M with 12 months' reserves. Ask us to confirm any purchase above 70%. Must have investor experience (first-time investor path not available). No mixed use. Valid passport/visa (visa waiver and Canada exceptions), W-8BEN, US-bank ACH and escrows for taxes and insurance required; no power of attorney. US housing history must be 1x30x12 (or free-and-clear ownership). Citizens of certain sanctioned/restricted countries ineligible, and 'Republic of China' nationals are ineligible in Florida. Funds in a US account at least 10 days before closing.
ITIN borrower: ITIN and DACA (and C08 EAD) borrowers allowed: max 75%, 10% of own funds, every applicant must own their primary residence and have rental-management experience. DSCR 1.00 (purchase) or 1.10 (refinance). Purchases confirmed; ask us before quoting an ITIN refinance.
Non-permanent resident: Yes – E, G, H, L, O, P or TN visa (or C09/C09P EAD) valid at closing, 2+ years living and working in the US, valid SSN and established credit; max 75% purchase / 70% cash-out (ask us about higher).
LLC / entity vesting: LLCs, partnerships and corporations allowed when the borrowers together own 50%+ (six-month ownership lookback; max two entity layers; max four owners for partnerships/corporations); borrowers sign the note individually. Revocable living trusts and revocable blind trusts allowed. Irrevocable trusts, land trusts, IRAs and non-profits ineligible. No power of attorney when vesting in a trust or entity.
Gift funds & assets: Only after the borrower puts 10% down from their own funds; donor must be a relative, domestic partner or fiancé(e). Gifts can't be used for reserves. No gift of equity.
Financed property / exposure limits: Max 10 loans / $10M with this lender; no cap on other financed properties for DSCR.
Other borrower rules: At least one applicant needs 12 months of rental ownership/management in the last 3 years (or a first-time investor path). First-time homebuyers are not eligible. Property can't be occupied by the borrower, an LLC member or family. Non-arm's-length purchases not permitted. All applicants must own their primary residence if DSCR is under 0.75 or if using the first-time investor path. No forbearance plan in the past 12 months. Min 620 FICO (highest qualifying score among borrowers); no/limited-FICO borrowers ineligible; 3 tradelines (or 2 with a 12-month mortgage history). Borrowers party to a pending lawsuit, with diplomatic immunity, or owning a federally illegal business are ineligible.

Property

Eligible property types: Investment 1–4 unit SFR, PUD, warrantable and non-warrantable condos, condotels, co-ops (select NY/NJ counties), mixed use; manufactured homes by exception only
ADUs & unpermitted additions: Single-family homes with up to 2 ADUs are acceptable when typical for the area; each ADU must be substantially smaller than the main house and the appraisal needs 2 comparable sales with similar ADUs. A non-permitted unit is OK when those comps prove market acceptance and zoning doesn't prohibit it as an illegal use; the second ADU gets no value. ADU rent can never be used for qualifying, permitted or not. Multi-unit properties with ADUs are exception-only; manufactured homes can't have ADUs. Unpermitted room additions are case-by-case: done in a workmanlike manner, no adverse marketability impact, and no value given to the addition.
Non-warrantable condo: Allowed at 80% with full review and only ONE non-warrantable feature. Accepted features include single-entity ownership up to 30% (counting related LLCs), investor occupancy up to 75%, commercial space up to 40%, HOA delinquencies up to 25%, reserves under 7% with management's plan, and mandatory recreational leases/club memberships (75%/70%). Ineligible: non-gut conversions under 2 years old, mobile/manufactured units, timeshares, co-op units, assisted-living options, community-apartment projects, developer-leased amenities, transfer fees to outside parties.
Condotel: Allowed (max 75%) in resort or metropolitan areas when hotel-like features are common to the area and don't hurt marketability. Established project; unit 500+ sq ft with at least one separate bedroom and a full kitchen with stove/oven. No mandatory rental pools or rental requirements (borrower must have exclusive use), no fractional/timeshare, no black-out dates restricting owner occupancy; commercial space up to 40%. Priced as non-warrantable.
Rural / acreage: Max 20 acres (over 10 acres needs like-kind comps with minimal land value attribution). Properties the appraiser designates rural are not eligible on the DSCR program.
Minimum square footage: Single-family 700 sq ft; 2–4 units 400 sq ft per unit; condos/condotels 500 sq ft.
Mixed use: Allowed (not for foreign nationals or first-time investors): max 75% purchase / 70% refinance; one commercial unit plus up to three residential units, more than 50% residential square footage, appraised on a 1025 by sales comparison, DSCR 1.15 on an amortizing payment. Commercial rent limited to 49% of gross rent (30% if vacant, with a 50% haircut to market rent on purchases; vacant commercial gets no rent on refinances). Refinances can't use actual rent above market; short-term-rented residential units use the lesser of the 12-month average or long-term market rent. Neither unit may be occupied by the borrower, titleholders, family, or their businesses.
5+ units / multi-property: No
Ineligible properties: Over 20 acres, rural designation, 5+ unit dwellings, timeshares/fractional ownership, TIC projects, houseboats, oil/gas-leased properties, working farms/ranches/orchards, unimproved land, group/assisted-living and boarding homes, marijuana-related properties, unique properties (geodesic/earth homes), places of worship, C5/C6 condition, true log homes (faux log OK), non-FNMA condo conversions, Hawaii lava zones 1–2, Native American/tribal land, private transfer-fee covenants, legal non-conforming properties that can't be rebuilt, single-wide manufactured, manufactured homes in condo/co-op/PUD projects, condos with multiple non-warrantable features. Co-ops are eligible (NYC boroughs, Nassau, Westchester and Bergen counties only); leaseholds per Fannie Mae. Manufactured homes only by exception (60%, no cash-out).
Declining markets: 5% LTV reduction from the program maximum when the appraiser designates a declining market.
Appraisal, review & insurance: Purchase: 1 appraisal up to $2M, 2 above. Refinance: 1 up to $1.5M; $1.5–2M needs 2 above 70% LTV; 2 above $2M. CU score 2.5 or less, otherwise a desk review within 10% ($1.5–2M can't rely on CU); a desk review is required regardless of CU above 80% LTV; a desk review over 10% low triggers a field review (lower value used if within 5%, otherwise a second appraisal); with 2 appraisals the lower value is used. Transferred appraisals allowed with a desk review within 0 to +10%. C5/C6 or Q6 not permitted. Rent-loss insurance of 6 months PITIA required.

Rental income

Rent used on a purchase: Generally the lower of the in-place lease (or rents stated in the purchase agreement/estoppel) and the appraiser's market rent; if the lease is above market, actual rent can be used up to 110% of market rent (anything above is disregarded). No vacancy factor; a vacant property uses 100% of 1007/1025 market rent (or AirDNA for short-term rental). A post-closing rent increase can be used only up to 25% above the current lease and not above market rent, at max 70% LTV with 6 extra months of reserves, evidence that no rent restrictions apply, and a letter supporting the increase.
Rent used on a refinance: Lesser of in-place rent or market rent. An above-market lease can be used with 2 months of timely receipts if it continues 6+ months after closing. A new lease starting within 60 days uses the lesser of actual or market (executed lease plus proof of first month's rent/deposit). A multi-year lease step-up taking effect within 12 months can be used if it continues 12+ months, capped at market.
Vacant / unleased refinance: Allowed with 100% of market rent: rate/term −5% (max 70%, waived when the appraisal shows recently completed renovations), cash-out −10%.
Short-term rental (Airbnb/VRBO): Yes
Short-term rental documentation: Refinance: 12-month average of actual receipts (even if owned under 12 months); rents can't decline more than 10% in any 6-month period; must not be in an area that restricts STRs. Purchase: AirDNA Rentalizer allowed (property vacant at closing, 12-month forecast, 50%+ occupancy, 5 comps in the same ZIP, market/sub-market score 60+, 20% expense factor).
Short-term rental limits: Using actual STR rents above market: 5% LTV reduction (max 70%); actual STR rents at or below market: 5% reduction (max 70%) only if under 6 months in service. DSCR 1.00+ (1.15 above 75% LTV). AirDNA: purchase up to 80%, rate/term −5% (max 70%), cash-out −10% (max 65%).

Refinance seasoning

Cash-out seasoning: 6 months on title required (inherited or divorce-awarded property exempt; other cases by exception, using the lower of cost plus improvements or market value). 6–12 months: current value, but if it exceeds 125% of cost plus improvements a letter of explanation and supporting desk review are required, otherwise the lower figure is used. Over 12 months: current appraised value. No cap on cash-out amount; proceeds for business purposes with a signed letter.
Delayed financing (cash purchase recoup): Yes – cash purchase within 180 days of application; priced and treated as rate/term (no cash-in-hand limit). Original purchase must be arm's-length with documented funds; no gift recoupment; no existing liens. Value is the lower of appraisal or price plus documented improvements, and the loan can't exceed the documented investment. Not available in Texas.
Recently listed for sale: Can't be listed at application. Rate/term: must come off the market before the new loan and the borrower signs a letter of intent to keep it. Cash-out: can't have been listed by the current owner within 6 months of application.

Other terms

Seller / interested-party concessions: Interested-party contributions up to 6% at any LTV for investment properties, closing costs and prepaids only; excess reduces both price and value.
Secondary financing: Permitted (new or existing), including private seconds, if CLTV fits, there's no negative amortization, payments cover at least interest (market rate imputed on seller seconds), and any balloon/maturity is at least 5 years out (unless the debt is minimal relative to the borrower's assets and credit).
State & local restrictions: US territories (Puerto Rico, Guam, USVI, Northern Mariana Islands, American Samoa) not eligible. No prepayment penalty allowed in AK, KS or NM, with state-specific PPP limits in MI, MN, MS, NJ, NC, OH, PA, RI and VA; loans with DSCR under 1.00 and LTV over 70% must carry at least a 1-year prepayment penalty (where legal). Texas: no delayed financing, no IO on 50(a)(6) loans. Florida: 20% condo-project concentration cap; foreign nationals from the 'Republic of China' are ineligible.

Additional details

Notes: Investor history: 12 mo ownership in prior 3 yrs (FTI pathways available).

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