LAMD-D37 DSCR 5–10 Units | DSCR Guidelines

Loan limits

Lien position: First lien
Minimum credit score: 680
Max LTV – purchase: 75% (700 ≤$3M; 680 ≤$2M)
Max LTV – rate/term refinance: 75% (same)
Max LTV – cash-out refinance: 70% (700 ≤$2.5M; 680 ≤$2M)
Minimum loan amount: $750K
Maximum loan amount: $3.0M
Cash-out (cash in hand) limit: Unlimited ≤65% LTV; $1M above 65%
LTV reductions & overlays: Grid tops at 75% purchase/rate-term (700 FICO to $3M; 680 to $2M); cash-out 70%/65%. Declining market −5%.

DSCR requirements

Minimum DSCR: 1.15
DSCR below 1.00: No
No-ratio (no DSCR calculated): No
How DSCR and qualifying rent are calculated: Minimum DSCR 1.15 on the full PITIA (not interest-only); lesser of market or actual rents; long-term rent only; max 2 vacant units.

Products & terms

Products: 15- or 30-year fixed; 5/6, 7/6 and 10/6 SOFR ARMs (6% margin, qualified at the start rate). Interest-only available (680 FICO) with a 10-year IO period on the 30-year fixed, 7/6 or 10/6 ARM (no 5/6 IO, no 40-year term), but DSCR is always calculated on the fully amortizing PITIA.
Interest-only: Allowed but DSCR calculated on full PITIA
Prepayment penalty: Prepayment penalty allowed on business-purpose loans: 1–5 year terms, six months' interest on amounts prepaid over 20% of the original balance in any 12 months. A minimum 3-year prepay over $2.5M is stated for 1–4 units; confirm with us whether it applies to 5–10 units. NJ: a loan with a prepay must close in a corporation.
Reserves: 9 months up to $2M; 12 months above $2M.

Borrower & credit

Housing payment history: 0x30x24.
Credit events (BK, foreclosure, short sale, modification): Foreclosure, short sale, deed-in-lieu, short payoff, any bankruptcy (active bankruptcy ineligible), modification (except COVID-forbearance-related) or 120+ day mortgage late: under 2 years ineligible; 2–4 years allowed at 70% max and $1.5M (foreclosure only 3–4 years); over 4 years standard. No active NOD or lis pendens.
Forbearance, deferrals & modifications: Mortgage forbearance: if all payments were made, the loan just needs to be reinstated (no wait); if payments were missed, 3 on-time payments after forbearance ended (missed payments may have been added to the balance). A modification resolving a COVID forbearance, or from a forbearance exit, isn't a credit event. Non-mortgage accounts may stay in forbearance with the payment counted.
Collections, charge-offs, judgments & liens: Collections/charge-offs may stay open if under $5,000 each or over 24 months old with an aggregate under $15,000 and no title impact; medical collections can stay regardless. Others must be paid unless covered by reserves (max $15,000 each, 80% LTV, 680 FICO). Judgments and tax liens may stay open on a repayment plan with 6 months of on-time payments (subordinated if recorded against the property); otherwise paid at closing (cash-out can pay them). Disputed collections of $250 or less can stay; other disputed accounts with derogatory history in 2 years must be removed and credit re-pulled.
Tradelines & credit depth: Each applicant needs 3 tradelines and 24 months of credit history, with one tradeline active in the last 6 months and one seasoned 24 months (if spouses apply together only one must meet it; unmarried co-borrowers who meet 2 of 3 tests – living together 2+ years, a joint tradeline, joint asset accounts – are treated as spouses; authorized-user accounts don't count). Gaps can be bridged with alternative tradelines rated 0x30x12: with 3 tradelines on credit, add 1 if a housing payment is among the credit or alternative lines, otherwise 2; with only 2 tradelines, add 2 if one is a housing payment, otherwise 3. Non-permanent residents need a 2-year credit history with no waiver.
First-time homebuyer: No
First-time investor: Not allowed.
Foreign national: Not published – ask us about your scenario
ITIN borrower: No
Non-permanent resident: Yes – A05, E, G, H, L, O, P, R1 or TN visa holders with 2+ years living and working in the US, a valid SSN and established credit. Max 75% LTV and $3M loan amount.
LLC / entity vesting: Must vest in an LLC, partnership or corporation with full-recourse personal guarantees.
Gift funds & assets: Not allowed
Financed property / exposure limits: Lender caps at 8 loans / $10M per borrower under this program suite.
Other borrower rules: Qualifying score is the highest middle score among borrowers/guarantors (25%+ owners). Non-occupant co-borrowers not allowed. Ineligible: irrevocable trusts, borrowers with diplomatic immunity, owners of federally illegal businesses (exception only), and mortgage professionals. Power of attorney not allowed on cash-out loans or entity/trust-vested loans.

Property

Eligible property types: 5–10 unit residential
ADUs & unpermitted additions: Not applicable – 5–10 unit buildings.
Non-warrantable condo: N/A
Condotel: N/A
Rural / acreage: Rural not allowed.
Minimum square footage: 500 sq ft
Mixed use: Case-by-case (program rules)
5+ units / multi-property: 5–10 residential units: commercial USPAP appraisal (71A/1050) with rent roll, map and income/expense statement (no transferred appraisals), plus a BPO/drive-by with 0% variance; average or better condition; LTV on the lower of market value or appraisal; escrows and 6 months of rent-loss insurance required; closing documents must be reviewed by a lender-approved closing attorney.
Ineligible properties: Rural properties, over 10 units, over 10 acres, agricultural zoning over 20 acres, income-producing acreage, manufactured/mobile, modular, oil/gas leases, unique properties, working farms, co-ops, C5/C6 condition, condo conversions not meeting Fannie Mae, raw land, commercial, earth-berm homes, environmental conditions, lagoons/cesspools, places of worship, timeshares, boarding houses, assisted living, reservation land, houseboats, fractional ownership, marijuana use, TICs, model leasebacks, private transfer fees, under 500 sq ft. Hobby farms, log homes and mixed use are case-by-case.
Declining markets: 5% below the maximum LTV, plus credit-risk review.
Appraisal, review & insurance: Commercial USPAP appraisal (Form 71A/1050) with rent roll, map and income/expense statement, plus a BPO or drive-by commercial evaluation with 0% variance; transferred appraisals not allowed; LTV on the lower of market value or appraised value; average or better condition. Appraisal good for 120 days (recertification to 180). Loans over $2M may need two full appraisals – ask us. 6 months' PITIA rent-loss insurance required. Unpermitted additions case-by-case with no value given. Declining market: 5% below max with credit-risk review. Escrow holdbacks up to 30 days/$25K on purchases (case-by-case).

Rental income

Rent used on a purchase: Lesser of market or actual rents
Rent used on a refinance: Lesser of market or actual rents
Vacant / unleased refinance: Max 2 vacant units
Short-term rental (Airbnb/VRBO): No – long-term rents only
Short-term rental documentation: N/A
Short-term rental limits: No short-term rental income.

Refinance seasoning

Cash-out seasoning: 3 months on title as of the note date (transfer from an entity or trust counts if the borrower held 50%+ for 3 months). Value: owned under 6 months uses the lesser of purchase price plus documented improvements or appraised value; owned 6–12 months uses the lesser of purchase price or appraised value unless the appraiser supports the increase.
Delayed financing (cash purchase recoup): Yes – cash purchase within 6 months of application; proceeds capped at the documented investment; LTV on the lower of cost plus improvements or appraised value; no gift recoupment; priced as cash-out.
Recently listed for sale: Refinance of a property listed in the last 6 months: must be delisted before funding with a motivation letter to keep it; cash-out gets extra review.

Other terms

Seller / interested-party concessions: Interested-party/financing contributions up to 6% at any LTV, limited to actual closing costs and prepaids.
Secondary financing: New or existing secondary financing allowed within the program's CLTV limits. It need not be institutional, but must carry a market rate, have no negative amortization, and not balloon within 5 years of the new first mortgage.
State & local restrictions: NJ loans with a prepayment penalty must close in a corporation (not an LLC or partnership) with full-recourse guarantees. Pennsylvania's small-loan prepay limit does not apply to 5–10 units.

Additional details

Notes: Grid: 700 75% $3M purch/RT, CO 70% $2.5M / 65% $3M; 680 75% $2M / 70% $2.5M / 65% $3M, CO 70/65/60.

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