The Quick Read: A super jumbo DSCR loan can pay off a bank note that is coming due, and it is underwritten mainly on what the rental property earns, not on your traditional personal-income documentation. The new loan must clear three tests: the appraised value and leverage limit, the rent coverage ratio, and your credit and cash reserves. Every figure below is a ceiling through select wholesale programs, subject to underwriting.
- Business-purpose loans run from $150,000 to $10,000,000, and loans above $4,000,000 are reviewed case by case.
- Coverage of 1.00 or higher earns full leverage. Select programs reach 0.75-0.99 at reduced leverage, with LTV and terms adjusting, subject to underwriting.
- Credit floor is 660 on loans to $3,000,000 and 700 above that, with six months of reserves on the subject property.
- Two appraisals are required above $2,000,000.
- The payoff plus costs must fit inside what the new loan will fund. That gap is where most of these files get tight.
Why a Bank Loan Comes Due Even When You Paid on Time
Many investor bank loans are written with a short term and a long payoff schedule. The payments are small enough to feel like a 25- or 30-year loan. But the remaining balance comes due in one lump sum at maturity. That lump sum is a balloon payment. The Consumer Financial Protection Bureau describes a balloon as generally more than twice the average monthly payment, and it notes you may be able to refinance before it comes due. It also warns that a drop in property value or a weaker financial position can block that.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
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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.
Banks used to extend these notes as a matter of routine. That habit is fading. First American reports that lenders increasingly want a clear path to refinance, sale or workout instead of repeated extensions. Your bank may not offer another extension. Plan as though it won’t.
Key Terms Defined
Maturity date: the day the full remaining balance of the note is due.
Balloon payment: the lump sum owed at maturity after smaller regular payments.
DSCR (debt service coverage ratio): the property’s monthly rent divided by its full monthly obligation. The obligation is principal, interest, taxes, insurance and association dues, or PITIA.
ITIA: the same math for an interest-only loan. It counts interest, taxes, insurance and association dues, with no principal.
LTV (loan-to-value): the loan amount as a percentage of the appraised value.
Rate-and-term refinance: a new loan that pays off the old one and its costs, with no meaningful cash to you.
Cash-out refinance: a new loan larger than the payoff, with the leftover paid to you.
Prepayment charge: a fee for paying a loan off early, which can apply to the old note, the new one, or both.
What Are Your Options at Maturity?
You have six real paths. Here is how they compare.
| Option | What happens | Main risk |
|---|---|---|
| Extend | Bank gives a short added term | May be short or refused |
| Renew or modify | New terms with the same bank | Terms can reset against you |
| Refinance elsewhere | New lender pays off the bank | Value or rent may come in low |
| Sell | Proceeds pay the note | Forced timing weakens price |
| Pay down with cash | You shrink the balloon | Ties up liquidity |
| DSCR refinance | Income-qualified long-term loan | Needs strong rent and appraisal |
A renewal often reuses the old appraisal and title policy. A refinance means new terms and new closing costs. Neither is automatically better. The right choice depends on whether the property’s income can support the new loan and whether you want long-term debt on it.
Where a Super Jumbo DSCR Loan Fits
A super jumbo DSCR loan fits an investor who holds a high-value rental, wants long-term financing, and would rather be judged on the property than on personal income. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Across the wholesale network, the file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
“Super jumbo” starts where the standard program ends. The standard DSCR program stops at $3,000,000. The portfolio investor program reaches $10,000,000. Short-term-rental files and no-ratio files stop at $2,000,000.
Underwriting does not get lighter as the balance grows. It gets stricter. Credit, reserves, entity documents and appraisals all carry more weight. Think of it as swapping one test for another, not skipping the test.
For the wider picture, see Lendmire’s complete DSCR loans guide.
How Underwriting Treats a Maturing-Loan Refinance, Step by Step
1. Read the existing note. Find the maturity date, the payoff amount, any prepayment charge, and any extension or renewal option. A payoff letter from the bank fixes the exact number.
2. Start early. The appraisal, entity documents, insurance and title all take time to assemble. Starting well before maturity keeps you from negotiating with a bank that has already set its deadline.
3. Run the coverage math. Divide the property’s qualifying monthly rent by the full monthly obligation. On a fully amortizing loan, that is PITIA. On an interest-only loan, it is ITIA. Rent is generally the lower of the lease rent or the appraiser’s market-rent opinion.
4. Order the appraisal. The appraisal supplies value and a rent opinion. For small residential income property, the rent opinion comes on the standard rent schedule form (Form 1007) or the operating income form (Form 1025). Above $2,000,000, two appraisals are required.
5. Size the loan against the ladder. Value and rent both cap the loan. Whichever limit is smaller wins.
6. Assemble borrower and entity documents. These include the operating agreement, EIN, insurance and title. The guarantor’s credit, identity and liquidity are reviewed. Entity vesting is welcome, though layered entities are not.
7. Pay off the bank at closing. Title or escrow wires the payoff. Anything left over is cash-out. The payoff letter and the use-of-funds paperwork must agree.
The Leverage Ladder at Super Jumbo Size
The bands below are loan amounts, not purchase prices. Compute value times leverage first, then read the band for that loan. Figures assume coverage of 1.00 or higher and are ceilings through select wholesale programs, subject to underwriting.
| Loan band | Rate-and-term | Cash-out |
|---|---|---|
| $150K–$1M | 80% | 75% |
| $1M–$1.5M | 75% | 70% |
| $1.5M–$2M | 75% | 60% |
| $2M–$3M | 75% | 60% |
| $3M–$4M | 65% | — |
| $4M–$6M | 60% on review | — |
| $6M–$10M | 60% on review | — |
The top cell in each band needs a particular credit score. The $150K–$1M band’s top cell needs 660 or better. The $1M–$1.5M band needs 700. The $1.5M–$3M bands need 720. The bands above $3,000,000 need 700. A lower score takes a lower leverage cell in the same band. The program floor is 660 on loans to $3,000,000 and 700 above that.
Above $4,000,000, every request is reviewed case by case before submission, and it is rate-and-term only.
The 70% cash-out ceiling in the second band applies to standard rentals. Cash-out also has its own rules: proceeds are unlimited at or below 60% LTV and capped at $1,500,000 above 60%. For a closer look at limits, read Lendmire’s piece on super jumbo cash-out refinance loan limits. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
A Worked Example: When the Payoff Doesn’t Fit
Consider a property valued by the appraiser at $5,000,000 with a bank balloon of $3,250,000. The payoff looks like 65% of value. The ladder’s rate-and-term ceiling for a loan in the $3M–$4M band is 65%, so the new loan could just reach the balloon on the value side. Then rent has to carry it.
Say the appraiser’s market-rent opinion supports coverage of roughly 0.95x on the loan that would be needed. That is below 1.00. Select programs in the network reach 0.75-0.99 coverage at reduced leverage, with LTV and terms adjusting, subject to underwriting. So the loan comes in smaller than the balloon, and a gap appears.
Those inputs are modeled assumptions, not market data. The lesson holds anyway: the smallest proceeds number wins. Value, leverage and coverage each produce a ceiling, and the lowest one sets the loan. The gap between that loan and your payoff plus costs is what you cover another way.
Levers that close a gap:
- Bring cash to closing to cover the shortfall.
- Choose an interest-only structure, which is qualified on ITIA and runs a 120-month interest-only period on 30- and 40-year terms, up to 75% LTV with coverage of 0.75 or better.
- Raise the credit score to unlock a higher leverage cell.
- Pay down part of the old note before closing.
- Sell or refinance only the weakest property if the bank note covers several. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
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.
A Practitioner’s Note on Appraisals
At large balances, the appraised rent carries as much weight as the appraised value. Files that look strong on a purchase price often tighten when the rent opinion comes in below the lease. Across the wholesale network, the stronger refinance files document rent early and order the appraisal with enough runway to respond to a short result. Waiting until the bank’s deadline is close leaves no room to fix it.
Timeline: Working Backward From Maturity
You cannot control when the bank wants its money. You can control the order of work.
- Earliest planning stage: get the payoff letter, read the note, and check for a prepayment charge.
- Next: order the appraisal and rent schedule, and gather entity papers and insurance.
- Then: get the file in front of lenders and review the proceeds against the payoff.
- Closing stage: title confirms the payoff figure and lien release, and the new loan funds the payoff.
If you miss the date, the bank may charge default terms or move toward enforcement. Talk to the bank before that point.
Document Checklist (Property-Income Oriented)
- Payoff letter and the current note
- Entity documents: operating agreement and EIN
- Leases, or a plan for the appraiser’s rent opinion
- Insurance for the property
- Title and vesting information
- Government ID and credit authorization for the guarantor
- Proof of liquidity for reserves
Reserves on the subject property run six months of PITIA, or ITIA on interest-only. First-time investors need twelve months. Cash-out proceeds never satisfy the reserve requirement. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Where the General Rule Breaks
Larger or commercial-style assets. DSCR underwriting is built for one-to-four-unit rentals. Larger multifamily and mixed-use buildings often follow commercial paths instead. Whether a property fits the network is a program question.
Coverage under 1.00. Select lenders in the network reach below 1.00, but LTV and terms adjust. Credit and reserves tighten too.
No-ratio files. Through select wholesale programs, no-ratio files reach $2,000,000 with a seven-year clean housing history and 0x30x24, subject to underwriting.
Short-term rentals. Short-term-rental files need coverage of 1.00 or higher and stop at $2,000,000. Income runs on twelve months of operating history on a refinance, at 80% of gross. Municipal permission must be documented for the specific property. 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.
Rural and acreage. Above $3,000,000: no rural property, and no more than ten acres on a non-rural one.
Prepayment charges. An old note can carry a large exit cost, so read it before you plan around a number.
New loan, new clock. A long-term amortizing loan removes the balloon. A short-term note does not. Check that the replacement does not hand you another maturity.
Refinance, Sell or Pay Down: The Decision
Refinancing solves the deadline, not necessarily the cash flow. If the new obligation squeezes the rent, you have traded a balloon for a thin month-to-month margin. Selling ends the question but can turn into a forced sale if you wait. Paying down uses liquidity you may want elsewhere.
A sensible test: refinance when coverage clears at your intended leverage and you want to keep the asset. Sell when the numbers only work with a large cash infusion you don’t want to make. Pay down when a modest check turns a failing file into a clean one.
Related reading: Lendmire’s piece on how super jumbo DSCR term notes replace a maturing bank loan. Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can a DSCR loan pay off a bank balloon?
Yes, when the new loan is large enough after value, leverage and coverage limits. The payoff plus costs must fit inside the proceeds. A rate-and-term structure funds the payoff and nothing more, subject to underwriting.
Does the old bank have to agree?
The bank must issue a payoff letter and release its lien at payoff. It does not need to approve the new lender. It does control the payoff figure and any prepayment charge, so ask for the letter early.
Can I take cash out at the same time?
Sometimes, up to a point. Cash-out is available only on loans to $3,000,000, with lower leverage than rate-and-term. Above $3,000,000 there is no cash-out. Anything above the payoff counts as cash-out, subject to underwriting.
What if my coverage is under 1.00?
Select programs in the network reach 0.75-0.99 at reduced leverage, with LTV and terms adjusting, subject to underwriting. A smaller loan may mean you bring cash to closing.
Do I need personal income documents?
The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, liquidity, identity and entity documents are still reviewed.
Next Step
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. Reach the team at 828-256-2183.
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).
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References
1. CFPB: What is a balloon payment?
2. First American CRE Insights: Has the CRE maturity wall reached a turning point?
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: Super Jumbo DSCR Loan After Divorce or With a Spouse Off the Loan · Keep a Super Jumbo DSCR Loan vs Refinance After a Servicing Transfer · Can a Coastal Six-Unit Building Get a Super Jumbo DSCR Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.