The Quick Read: The best program for a paid-off house depends on loan size, rent coverage, credit, and property type, because a super jumbo cash-out is sized by the lowest of three limits: the leverage cap for the loan band, the loan the rent can support, and the cash proceeds cap. Lendmire is a mortgage broker, not a lender. It shops select lenders in a wholesale network and matches the property to the program that fits. Every figure below is a ceiling, subject to underwriting and not a commitment to lend.
- On a cash-out refinance of an investment property, leverage tops out at 75% for loans up to $1,000,000 and steps down as the loan grows. There is no cash-out above a $3,000,000 loan.
- Cash proceeds have a ceiling of their own, and it is the third limit covered below.
- Owning the house free and clear does not turn the deal into a simple refinance. It is still underwritten as a cash-out.
- A coverage ratio of 1.00 earns full leverage. Below 1.00, select programs in the network offer a path at reduced leverage, with LTV and terms adjusted, subject to underwriting.
- The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, not on personal tax returns.
Key Terms Defined
Cash-out refinance: a new loan that pays off any existing liens and puts the extra money in your hands.
Free and clear: a property with no mortgage or other lien against it.
Super jumbo: a loan big enough that mainstream programs stop. No formal definition exists, so each lender draws its own line.
DSCR (debt service coverage ratio): monthly rent divided by the full monthly payment on the property.
PITIA: principal, interest, taxes, insurance, and any association dues. Together they make up that full payment.
LTV (loan-to-value): the loan amount as a percentage of the appraised value.
Reserves: your own liquid savings, counted in months of payments, held after closing.
Interest-only period: a stretch where the payment covers interest and no principal.
Why a Paid-Off House Still Counts as a Cash-Out
A refinance of a house with no mortgage is a cash-out refinance, because you are taking money from equity. That matters because cash-out limits are tighter than the limits on a rate-and-term refinance (one that only swaps an existing loan for a new one).
Many owners assume that a paid-off house gets the best leverage. It does not. With no first lien, the payoff line is zero, so gross cash is the new loan minus closing costs and any other liens. The program still applies the cash-out column of the ladder.
Paying off a second lien, such as a HELOC or a private loan that was not used to buy the property, can also make a transaction a cash-out even when no cash comes back. If that payoff pushes the new loan above $3,000,000, the cash-out option disappears.
How the Check Gets Sized: The Lowest of Three Limits
The size of your check is whichever of three limits binds first.
1. The leverage ceiling for the loan band. The ladder in the next section sets the maximum LTV for the size of the loan, not the price of the house.
2. The rent-supported loan. This is the loan size at which monthly rent divided by PITIA still reaches the coverage the program wants.
3. The proceeds cap. Proceeds are unlimited at or below 60% LTV on the cash-out. Above 60%, they are capped at $1,500,000. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Run a quick illustration. Say a high-value rental sits in the 60% cash-out tier, and at that loan size the rent covers only about 0.9x. The lender will not stop at the leverage ceiling. The loan is sized down until coverage clears the program’s floor, and the check shrinks with it. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The bands apply to the loan, not the property value. A house worth far more than $3,000,000 can still qualify, because the $3,000,000 line is a loan size. Compute value times leverage first, then read the band for that loan.
The Size Ladder: What Changes at Each Loan Band
Across the programs in the network, leverage steps down as the loan grows. This table shows the best available cell on investment property at coverage of 1.00 or higher. Each figure is a ceiling, subject to underwriting.
| Loan band | Purchase | Rate-and-term | Cash-out (standard rental) |
|---|---|---|---|
| $150K–$1M | 80% | 80% | 75% |
| $1M–$1.5M | 75% | 75% | 70% |
| $1.5M–$2M | 75% | 75% | 60% |
| $2M–$3M | 75% | 75% | 60% |
| $3M–$4M | 65% | 65% | — |
| $4M–$6M | 60% on review | 60% on review | — |
| $6M–$10M | 60% on review | 60% on review | — |
Credit scores work differently from the leverage columns. The top cash-out cell in each band needs a certain score, which is not the same as the program floor. The top cell up to $1,000,000 needs 660 or better. The top cell from $1,000,000 to $1,500,000 needs 700 or better. The top cells from $1,500,000 to $3,000,000 need 720 or better. A lower score takes a lower-leverage cell inside the same band.
The program floor is 660 on loans up to $3,000,000. Above $3,000,000 the super jumbo overlay sets it at 700. Above a $1,500,000 loan, the cash-out cells in the table are not open to scores of 680 or below, and those borrowers are left with a purchase or rate-and-term loan. Above $4,000,000, every request is reviewed case by case before submission, and only for purchases and rate-and-term refinances.
Does the Conforming Limit Cap Any of This?
No. The conforming limit is the line FHFA sets each year for loans that Fannie Mae and Freddie Mac can buy. Its baseline for a one-unit property is $832,750 in most of the country, with a high-cost ceiling of $1,249,125. Anything above the local limit is called jumbo.
DSCR loans are non-agency products, so that limit does not cap them. It only gives “jumbo” a reference point. “Super jumbo” has no regulatory definition at all.
What “Best Program” Means When There Is No Payoff
No program wins on every file. When there is no payoff to cover, the useful question is which program’s rules fit your property and your goal. Brokers compare programs on a handful of criteria:
- Size ceiling. Standard DSCR programs stop at $3,000,000. The portfolio investor ladder in the network runs from $150,000 to $10,000,000.
- Leverage at your loan size. Read the ladder by loan band, not by price.
- Proceeds cap. Check the $1,500,000 limit above 60% LTV.
- Coverage treatment. Find out how the program handles a ratio below 1.00. Select lenders in the network have a path at reduced leverage, with LTV and terms adjusted, subject to underwriting.
- Credit tier. The score your target cell needs matters more than the floor.
- Interest-only runway. Some programs offer a 120-month interest-only period on 30- and 40-year terms, up to 75% LTV, qualified on the interest-only payment, subject to underwriting.
- Property fit. Condo type, unit count, acreage, and short-term-rental status all change the answer.
- Entity vesting. Holding title in an LLC is welcome on most programs here, subject to program terms, though layered entities are not.
A broker that shops several wholesale lenders can read your file against each rulebook. That is the real meaning of best: the program whose rules your file clears at the leverage you want.
When Rent Binds Before LTV Does
Coverage is the number most investors underestimate. After a cash-out, principal and interest grow while taxes and insurance stay fixed, so the ratio falls as you draw more.
The ratio also is not cash flow. A loan can clear 1.00 while the property nets close to nothing each month, because the ratio only sets rent against PITIA. Deciding how much to pull matters more than how much is allowed.
An interest-only period helps coverage, because the payment tested is interest only. The cash-out ceilings in the table still apply. Weigh the trade-off honestly: you carry the same principal at the end of the period.
If the numbers get thin, the alternatives are a smaller draw, a loan on a different asset, or comparing a HELOC against a cash-out refinance on a rental. A HELOC can sit in first position on a paid-off rental and avoid a large new fixed payment. A cash-out refinance creates a bigger first lien.
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.
Reserves, Appraisals, and Property Eligibility
On interest-only loans, the reserve count uses interest, taxes, insurance, and dues. Cash-out proceeds never count toward reserves, so the money must already sit in your accounts. The program allows up to 20 financed properties, with no extra reserves for the other loans.
Loans above $2,000,000 need two appraisals. For rentals, the appraisal normally includes a market-rent schedule. Loans above $3,000,000 carry a stricter overlay:
- credit of 700 or better, with 0x30x24 mortgage history
- 48 months since any credit event
- citizens and permanent residents only
- no rural property, and no more than ten acres on a non-rural one
On loans at or below $3,000,000, rural collateral of five acres or less can reach 75% LTV, though a cash-out still follows the leverage ladder for its loan band. Acreage up to twenty acres is allowed on those loans. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
A few property types change the math:
- Condos. Warrantable and non-warrantable condos are both eligible, and non-warrantable ones top out at 75% and $1,500,000.
- ADUs. A legal, permitted accessory unit can add rent. An unpermitted one is generally left out of the income.
- Short-term rentals. These qualify at coverage of 1.00 or higher, to $2,000,000, using twelve months of operating history at 80% of gross rent. They are for experienced investors, meaning twelve months owning income property in the last thirty-six. 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. Municipal permission is documented for each property.
- Former primary residences. The owner must have moved out and signed a business-purpose declaration. A lease should be in place, or the home vacant and marketed for rent.
Business Purpose, in One Paragraph
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. The CFPB’s Truth in Lending Act summary lists credit extended primarily for a business purpose as exempt from that law and notes that lenders weigh factors such as the borrower’s statement of purpose. For you, the practical meaning is simple: the proceeds are meant for business or investment use. Tax treatment varies; consult a qualified professional.
What About a Full-Documentation Jumbo?
A traditional jumbo looks at your personal income, and some borrowers prefer it. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. For a high-net-worth investor with several properties, entity vesting and no reliance on personal returns can be the deciding points. For a borrower with a large salary and one rental, a full-doc loan may offer different terms. Brokers compare both against your file. For the broader picture, see the complete DSCR loans guide.
Preparing the File
Gather these before you talk to a broker:
- entity documents, if the property is vested in an LLC
- a current lease, or the plan to rent the vacant house
- proof of insurance and recent tax bills
- statements showing six or twelve months of reserves that do not depend on the proceeds
- a clear record of any second liens you plan to pay off
- a plan for the cash, since money meant for your next purchase must be traceable to the next lender
Running Your Numbers
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. Lendmire arranges business-purpose investment financing in 41 markets, including Washington, D.C., through select lenders in its wholesale network. Request a quote or call 828-256-2183.
Frequently Asked Questions
Can I pull cash out of a house I own free and clear?
Yes, through a cash-out refinance, and the transaction is underwritten as one. On an investment property, leverage on the cash-out runs up to 75% for loans to $1,000,000 and steps down from there. Cash-out is not available on loans above $3,000,000. Every figure is a ceiling, subject to underwriting.
Is there a limit on how much cash I can receive?
Yes. Proceeds are unlimited at or below 60% LTV on the cash-out, and capped at $1,500,000 above 60%. Borrowers with credit of 680 or below get no cash-out above a $1,500,000 loan. Closing costs and any other liens come out of the gross amount. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Can the cash count toward my reserves?
No. Across the network, cash-out proceeds never satisfy reserves. Reserves come from your own assets, typically six months of PITIA on the subject property, or twelve for first-time investors.
What happens if the rent does not cover the payment?
The loan is sized down until coverage clears the program’s floor. A coverage ratio of 1.00 earns full leverage. Below 1.00, select lenders in the network offer a path at reduced leverage, with LTV and terms adjusted, subject to underwriting.
Can a property worth more than $3,000,000 still qualify?
Yes, because the $3,000,000 line applies to the loan and not the value. A cash-out on that property would have to stay within the cash-out ladder, which allows none above a $3,000,000 loan. A purchase or rate-and-term refinance can run higher, to $10,000,000, with loans above $4,000,000 reviewed case by case.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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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. FHFA – conforming loan limit values
2. CFPB – Truth in Lending Act summary
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: Banks That Offer a Super Jumbo DSCR Cash-Out Refinance on a Paid-Off Property · Best Super Jumbo DSCR Cash-Out Refinance Program to Pull Your Original Investment Back Out · Top Super Jumbo DSCR Cash-Out Refinance Providers to Pay Off a Second Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.