The Quick Read: To support a penthouse appraisal on a super jumbo DSCR file, you give the appraiser documented, checkable facts through the lender: closed sales in the building, verified unit measurements, deeded terrace rights, upgrade records and building documents. You do not argue for a number. The same report sets both the value and the market rent that drives coverage, so one weak opinion can pull down leverage and the coverage ratio together.
- A penthouse is usually the least comparable unit in its building, so thin comps are the main risk.
- The appraisal sets value for loan-to-value and supplies the rent opinion for coverage.
- Evidence goes to the appraiser through the lender or broker, never straight from the borrower.
- Above $2,000,000, programs in Lendmire’s network call for two appraisals, and the lower value typically drives the loan.
- Line up unit and building documents before the appraisal is ordered, not after it comes in light.
Why Is a Penthouse an Appraisal Problem?
A penthouse is a condo unit with features no other unit in the building shares. There may be one true penthouse. Its terrace, ceiling heights, private elevator or custom plan may have no recent sale to match. The appraiser still has to build a value from something.
DSCR Calculator
Run the numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
The industry describes the same problem in luxury work generally. When few similar sales exist, a single comparable can carry outsized weight, and one-off layouts are hard to turn into clean adjustments. That is the whole job for the borrower: make the facts easy to verify so the appraiser’s adjustments rest on evidence and not on guesswork.
Lendmire is a broker. It arranges these files through a wholesale network of investor lenders, and the lender and its appraiser control the report. Everything below is about what you can legitimately put in front of them.
What Is the Appraiser Actually Building on a DSCR File?
On a DSCR file the appraisal does two jobs. It sets the value that drives loan-to-value. It also gives the market rent that drives the coverage ratio. Because the loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, the appraiser’s rent opinion carries real weight.
The value side usually runs on the condo unit report. DSCR loans are not agency products, but non-QM files commonly borrow these report formats. Whether a given program takes a 1073 with a rent schedule is a program question, and it varies across the network.
The rent side is where penthouses surprise people. A penthouse can command premium rent, but rent comps are often as thin as sale comps. The rent schedule form asks for comparable rentals, adjusted for location, view, design, age and condition, per the Form 1007 instructions. A weak rent opinion can hurt coverage even when value holds.
Short-term rental income is a separate matter. Fannie Mae’s appraiser update says a nightly rate multiplied by 30 is the wrong way to support a monthly rent opinion. On a purchase, programs that allow short-term rentals use the appraisal’s short-term-rent analysis at a discount to gross. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
How Do Appraisers Handle Thin Comps?
Appraisers start inside the building and widen the search only when they must. A New York condo and co-op trade publication quotes an appraiser who prefers sales in the same building, ideally the same line, then nearby buildings with similar traits. Fewer adjustments make a comp more reliable.
When the best comps are old, far away or different, the appraiser is expected to explain the choice. The agency guides show the logic even though they do not govern DSCR files. With no truly comparable sales, the appraiser picks the best value indicators and makes market-supported adjustments, not rule-of-thumb ones. Treat this as contrast only. It shows how appraisers think, and the same logic carries into a non-QM report.
The practical read for a borrower is three levers an appraiser can pull: go back further in time, go out further in distance, or use a more dissimilar property. Each one needs a stated reason. Your evidence package should make the reason easy to write.
What Earns a Premium, and What Doesn’t?
Features earn a premium when closed sales show the market pays for them. Cost and sentiment do not earn one. Practitioners say higher floors and better view direction normally carry a premium, but there is no standard method for sizing it, and the premium has to show up in closed sales over time.
| Feature | Evidence that supports it | Evidence that doesn’t |
|---|---|---|
| Floor level | Closed sales on different floors, same line | A listing agent’s opinion |
| View | Closed sales with different view orientation | Photos alone |
| Terrace | Deeded area measured and documented | Verbal claim of size |
| Private elevator | Sales of units with and without it | Builder brochure |
| Upgrades | Permits, invoices, matched renovation sales | Total renovation cost |
The last row trips up more investors than any other. What you spent is not what the market pays. Thin evidence can mean no adjustment at all.
What Goes in the Evidence Package?
The package is the set of documents that lets a lender hand the appraiser verified facts. Build it before the appraisal is ordered. Penthouse specialists make the same point: start preparation before the report is written, because building problems and rarity claims are easier to document early.
1. Closed sales in the same building. List line, floor, view and date for each. Closed sales, not listings.
2. Prior sales and past listings in the development. These give the appraiser history on the unit and its neighbors.
3. Floor plan and measured square footage. Use public records or a building-measured figure, and flag any gap between the two.
4. Terrace and deeded-element documents. Show the terrace area, deeded rights, parking and storage in writing.
5. Upgrade records. Permits, invoices and dates, so finish level is checkable.
6. Building documents. Reserves, litigation, special assessments and roof or mechanical issues. Weak reserves or pending assessments can affect both value and eligibility.
7. A short comp-and-rationale memo. One page: which sales matter, why, and what differs. Facts only.
| Item | Who usually supplies it |
|---|---|
| Closed-sale list | Buyer’s or seller’s agent |
| Plans, terrace deed | Seller, building management |
| Upgrade records | Seller or owner |
| Building documents | Management company |
How Do You Deliver It Without Pressuring the Appraiser?
You don’t contact the appraiser. The request runs through the lender, and so does any later challenge. Keep the packet factual, brief and checkable. Do not name a target number.
What Does a Worked Example Look Like?
Say a penthouse sits on the top floor of a high-rise, and the only same-building sales are mid-floor units. This example is hypothetical. It shows structure, not any market.
An appraiser might start from a mid-floor sale and adjust for floor, view and terrace. A weak argument says the penthouse is worth more because it is a penthouse. A strong argument shows two closed sales in the building, same line, on different floors, and the price gap between them. That paired difference supports a floor adjustment. A second pair, with and without a deeded terrace, supports the terrace. Paired-sales analysis is the most accepted way to pull an adjustment out of the market, and adjustments must reflect what the market recognizes, not what the owner spent.
If the building has no pairs, the honest outcome is a smaller adjustment and a wider range. Plan the leverage around that.
What Happens With Two Appraisals?
Above $2,000,000, programs in Lendmire’s network call for two appraisals. Beyond that line, lenders also vary on whether they add a desk or field review for a unique unit. The size of the loan matters here, not the purchase price. Compute price times leverage first, then read the band for that loan.
When two values come back, the lower one typically drives the loan. Averaging is the exception. That is the usual pattern, not a guarantee. The goal is a file where both valuations rest on the same facts, so the two reports tell the same story. Lendmire’s piece Does a Trust-Held Super Jumbo Bank Statement Loan Get a Second Appraisal? covers the second-valuation mechanics in more detail.
Leverage steps down as the loan grows, through select wholesale programs and subject to underwriting. On investment property, the ceiling is 80% to $1,000,000, 75% to $3,000,000 on a purchase, 65% from $3,000,000 to $4,000,000, and 60% above that on review, case by case. The top cell in each band takes stronger credit than the program floor, which is 660 to $3,000,000 and 700 above it. A light appraisal on a high-balance penthouse means a smaller loan or more cash at the table, so the value fight is also a leverage fight.
| Loan band | Purchase leverage |
|---|---|
| $150K–$1M | 80% |
| $1M–$1.5M | 75% |
| $1.5M–$2M | 75% |
| $2M–$3M | 75% |
| $3M–$4M | 65% |
| $4M–$6M | 60% on review |
| $6M–$10M | 60% on review |
Coverage at 1.00 earns full leverage. Coverage from 0.75 to 0.99 is a real path through select programs to $2,000,000, but LTV and terms adjust, subject to underwriting. Programs typically hold six months of reserves on the subject property. Many penthouse files also carry large HOA dues, which sit inside the coverage test, so confirm rent support early. For the full structure, see the complete DSCR loans guide.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Where Does the General Rule Break?
- One true penthouse in the building. Same-building history is thin, so wider or older comps need written justification.
- Duplex or multi-level units. Multiple levels, private elevators and vaulted ceilings make matching harder.
- Appraiser fit. Lenders may want an appraiser who works the luxury tier.
- Cash-heavy luxury markets. Fewer financed sales can leave appraisals more conservative.
- Non-warrantable buildings. The building review is a separate gate from the appraisal. Programs in the network allow non-warrantable condos to 75% and $1,500,000.
- Condotels and rental-pool buildings. Income documentation differs. Condotels run to 75% on a purchase and 65% on a refinance, to $1,500,000.
- Rural or acreage collateral. Different issues apply; Lendmire’s pieces on acreage appraisals cover that ground.
What If the Number Comes In Low?
Review the report for factual errors first: square footage, omitted terrace area, wrong floor. Then give the lender specific facts. Reviewing the appraisal for errors or omissions and handing the lender factual information on specific concerns is the sensible way to approach a low number.
A reconsideration request goes through the lender, generally once per appraisal, with checkable evidence such as closed comps. Policies differ among non-QM lenders, so treat the process as general.
If the value stands, Plan B is a smaller loan, more equity, or a different program band. Decide that before the order, and keep a cash cushion for a light number.
Key Terms Defined
Comp: A recently closed sale of a similar property that the appraiser uses to set value.
Adjustment: A dollar change the appraiser makes to a comp to account for a difference like floor or terrace.
Paired sales: Two similar sales that differ in one feature, used to measure what the market pays for it.
Reconciliation: The step where the appraiser weighs the comps and lands on one value.
Rent schedule opinion: The appraiser’s view of market monthly rent for the unit.
Desk or field review: A second look at an appraisal, on paper or on site.
Reconsideration of value: A lender-submitted request that asks the appraiser to revisit the value using new facts.
Frequently Asked Questions
Can I talk to the appraiser to explain my penthouse?
No. Borrowers generally can’t contact the appraiser to push a number. Information goes through the lender or broker, and it should be factual and checkable.
Does the price I paid prove the value?
No. The loan sizes off appraised value, not the contract price. If value comes in under contract, the gap is funded in cash or the loan shrinks.
Are comps always required to be recent and nearby?
Not for unique properties. Appraisers can look back further and wider when they justify it in the report. Agency guidance, for contrast, allows older sales with commentary.
Does a better view mean a fixed dollar premium?
No. Practitioners say there is no standard method, and the premium has to show in closed sales.
Does the rent opinion matter as much as value?
On a DSCR file, yes. The same appraisal supplies the rent that sets the coverage ratio, so a thin rent opinion can hurt the file even when value holds.
If you are buying or refinancing a high-balance rental property and want to see how the numbers work, Lendmire can help you compare super jumbo DSCR loan options based on the property income, the loan balance, credit profile, leverage, and investor goals. Business-purpose financing is arranged in 41 markets, including Washington, D.C., subject to underwriting. Nothing here is a commitment to lend.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Form 1007 instructions
2. Fannie Mae Appraiser Update (June 2024)
This article is part of Lendmire’s super jumbo DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a Co-Signer Help You Qualify for a Super Jumbo DSCR Loan? · Can a Partnership Be the Borrower on a Super Jumbo DSCR Loan? · Super Jumbo DSCR Loan After Divorce or With a Spouse Off the Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.