The Quick Read: Few big banks write this loan on rental income alone, so most investors reach it through non-bank investor lenders that a broker can shop. The loan replaces your first mortgage and your second lien with one new first lien, sized by the property’s rent, its value, and a leverage ladder that tightens as the balance grows.
- Paying off a second lien on a rental is generally treated as a cash-out refinance, even when you take no cash.
- Cash-out is not available on any loan above $3,000,000 through the programs Lendmire places files with, subject to underwriting.
- The new loan must cover both payoffs plus closing costs, so the monthly obligation grows and coverage can slip.
- The best program for your situation depends on loan size, credit, property type, and how the second lien is documented.
What Does “Super Jumbo” Actually Mean?
“Super jumbo” is a market label, not a regulated tier. No agency defines it. Each lender decides where it starts.
What is fixed is the conforming line. The baseline one-unit conforming limit is $832,750, and the high-cost-area ceiling is $1,249,125. Anything above the limit is a jumbo loan. Super jumbo sits well above that, usually in the multi-million range.
In the wholesale network Lendmire works with, the investor ladder runs from $150,000 to $10,000,000. The standard DSCR program stops at $3,000,000. The super jumbo ladder carries qualified investors past that point, with leverage that steps down as the loan grows. That is how lenders manage the extra risk of a large balance.
Key Terms Defined
DSCR (debt service coverage ratio): The property’s monthly rent divided by its full monthly obligation, meaning principal, interest, taxes, insurance, and any HOA dues. A ratio above 1.00 means the rent covers the payment.
Second lien: A loan, such as a HELOC or a private second mortgage, that sits behind the first mortgage on the same property.
Cash-out refinance: A new first mortgage that pays off existing debt and may return cash to you. Proceeds are the new loan minus payoffs, costs, and holdbacks.
Rate-and-term refinance: A refinance that replaces existing debt without returning meaningful cash.
Subordination: Written agreement by a lien holder to stay behind a new first mortgage.
Business-purpose loan: A loan made for investment property, not for a home you live in. DSCR loans are designed for non-owner-occupied investment properties, so they are reviewed differently from a standard owner-occupied mortgage.
Which Lenders Offer This Loan, and Which Types Actually Do?
The honest answer is that it depends on the lender type. The best fit for your situation turns on loan size, credit, property type, and how you want to be documented. Here is how the three main channels compare.
| Lender type | Typical approach | Fit for this loan |
|---|---|---|
| Large retail banks | Personal income and relationship review | Limited for property-rent-based lender review |
| Non-bank investor lenders | Property rent drives qualification | Common home for DSCR products |
| Broker with wholesale network | Shops several investor lenders | Matches file to program |
Many large banks underwrite jumbo loans on tax returns, assets, and a full personal profile. Some portfolio lenders will look at rent. But property-rent-based lender review at super jumbo size is more often found at investor lenders built for that purpose.
A broker does not lend. Lendmire, a DSCR-focused mortgage broker, arranges business-purpose financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Each lender sets its own overlays. The broker’s job is matching your scenario to the program whose rules fit it. Nothing here is a commitment to lend, and every file is underwritten individually.
How Underwriting Treats the Payoff, Step by Step
Here is the sequence a lender follows when the goal is to retire a second lien on a rental.
Step 1: Classify the transaction. Paying off a second lien that was not used to buy the property is generally cash-out. A rate-and-term label is the exception, not the rule. Some programs allow it for a purchase-money second, but that varies, so ask the lender before you assume.
Step 2: Find your size band. The requested loan amount sets the maximum cash-out leverage, the credit score that leverage needs, and how many appraisals you will need. Bands are loan amounts, not purchase prices. Multiply price by leverage first, then read the band for that loan. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Step 3: Size the loan to cover everything. The new first lien must pay off the old first mortgage, pay off the second lien, cover closing costs, and fund any cash to you. Cash-out proceeds never count toward reserves.
Step 4: Run coverage on the new, larger payment. Rent has not changed, but the monthly obligation has. A rental that cleared 1.00 at purchase can miss it after the refinance. The ratio threshold generally does not rise with loan size.
Step 5: Check seasoning and the valuation. Programs set a waiting period after purchase before they use appraised value instead of cost basis. Appraisers use the 1007 rent schedule and the 1025 small residential income report as the usual forms. Above $2,000,000, two appraisals are required.
Step 6: Document the second lien payoff. Order a payoff statement, not a plain balance. It includes accrued interest and fees. Under the CFPB’s payoff-statement rule, a creditor or servicer must give an accurate payoff statement within a reasonable time after your written request. Request it early.
Step 7: Close the line and confirm the release. If the second is a HELOC, send a signed written closure request. A zero balance does not close the line or remove the lien. After the new loan funds, confirm the release is recorded on title.
The Leverage Ladder at Super Jumbo Size
The next table shows ceilings on a standard rental at 1.00 coverage or better, through select wholesale programs, subject to underwriting. These are loan bands.
| Loan band | Purchase | Rate-and-term | Cash-out |
|---|---|---|---|
| $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 works alongside the ladder. The top cell in a band needs a certain score, and a lower score takes a lower leverage cell inside the same band. The top cash-out cell needs 660 or higher up to $1,000,000, 700 or higher from $1,000,000 to $1,500,000, and 720 or higher from $1,500,000 to $3,000,000. The program floor is 660 on loans up to $3,000,000. Above $3,000,000 the super-jumbo overlay requires 700, a clean 0x30x24 mortgage history, 48-month seasoning on credit events, citizen or permanent resident status, and no rural property.
Two cash-out rules matter for a payoff. Proceeds are unlimited at or below 60% LTV, while above 60% they are capped at $1,500,000. Separately, a score of 680 or below takes no cash-out on loans above $1,500,000, which is why the top cell in the $1,500,000 to $3,000,000 bands needs 720. No loan above $3,000,000 carries cash-out, and every request above $4,000,000 is reviewed case by case before submission. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Reserves are six months of PITIA on the subject property, or twelve for first-time investors. That money comes from separate funds, never from the cash-out.
A Worked Example, in Ratios
The inputs below are modeled assumptions, not market data. Say you own a rental appraised at $2,500,000. You carry a first mortgage and a HELOC against it. You want one new loan that pays both off.
Price times leverage sets the band, so start with the loan. At the 60% cash-out ceiling, the new loan is $1,500,000, which sits at the lower edge of the $1,500,000 to $2,000,000 band, where the top cash-out cell needs 720 or higher credit. A smaller loan would fall into the $1,000,000 to $1,500,000 band, where the top cell needs 700. The new loan must cover the following uses. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
| Use of the new loan | What to confirm |
|---|---|
| Payoff of the first mortgage | Current payoff statement |
| Payoff of the second lien | Payoff plus written closure request |
| Closing costs | Itemized from the lender |
| Cash to you | Whatever remains after the above |
Now the coverage check. Suppose rent covered the old first-mortgage payment at roughly 1.35x. Once the second lien is folded in and the loan balance grows, the same rent might cover the new obligation at about 1.10x. The property still clears 1.00, but the cushion is thinner.
If it had slipped below 1.00, you would have choices. You could lower the cash-out amount. You could ask a lender about coverage between 0.75 and 0.99, a real path through select programs to $2,000,000 at reduced leverage. LTV and terms adjust there, subject to underwriting. Or you could use the interest-only option: a 120-month interest-only period on 30- and 40-year terms, up to 75% leverage, with coverage of 0.75 or better qualified on interest, taxes, and insurance. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
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 the Rules Break: Edge Cases
The second lender will not subordinate. Keeping the second in place requires its holder’s written agreement to stay behind the new first. That agreement is not automatic, so ask early. If the holder declines, payoff becomes the path.
Your balance is too big for cash-out. Above $3,000,000, the programs Lendmire places with offer no cash-out. The options are a rate-and-term refinance, a smaller balance that fits the ladder, or staged debt reduction. The related question of retiring a short-term private second is covered in Lendmire’s comparison of a super jumbo cash-out refinance and a portfolio DSCR loan for paying off a hard money second.
The property is a condotel. Condotels reach 65% on a refinance and $1,500,000, with $250,000 in cash-in-hand required. Non-warrantable condos reach 75% and $1,500,000.
It is a short-term rental. Coverage must be 1.00 or higher, and loans top out at $2,000,000. Income comes from twelve months of operating history on a refinance, counted at 80% of gross. Experienced investors only, meaning twelve months owning income property in the last thirty-six. 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.
The HELOC is secured by another property. Refinancing the rental will not release a HELOC secured by a different property, such as your own residence. That lien stays.
The second has an early-closure fee. Some HELOCs charge a fee if you close inside a set window. That reduces your net proceeds.
The property sits in an LLC. Entity vesting is welcome, with no layered entities, subject to program terms. A HELOC lender may require a title change before a new line can attach to an entity-held property.
The Agency Contrast, Briefly
Conventional agency rules treat this differently. Under Fannie Mae’s Selling Guide, only a second lien used to purchase the property can be paid off in a limited cash-out refinance. DSCR programs do not follow that guide. It is useful only as a reminder that “no cash out” and “not a cash-out refinance” are different ideas.
Three Ways to Handle the Second Lien
| Option | What happens | Main tradeoff |
|---|---|---|
| Pay off inside the new first | One loan, one lien | Larger balance, lower leverage |
| Pay the second down first | Smaller refinance later | Needs your own cash |
| Keep the first, add a standalone second | Existing first stays | Second still sits behind it |
The first option suits most investors who want a single clean lien. The second works when you have cash and the balance would otherwise cross a band line. The third makes sense only when the existing first is worth keeping and the second lender cooperates.
What to Prepare Before You Apply
- Payoff statements for the first mortgage and the second lien.
- The lease or rent history, or a rent schedule from the appraiser.
- The deed, entity documents, and vesting details if the property sits in an LLC.
- Proof of reserves, kept separate from any expected cash-out.
- A written closure request ready to sign for a HELOC.
- A list of every financed property. Programs allow up to 20.
For the full picture of how these loans work, see the complete DSCR loans guide.
Frequently Asked Questions
Do big banks offer a super jumbo DSCR cash-out refinance?
Some portfolio lenders will consider rent, but property-rent-based lender review at this size is more often found at non-bank investor lenders. A broker with a wholesale network can compare several programs at once.
Does paying off a second mortgage count as cash-out on a rental?
Generally yes. Some programs treat a purchase-money second as rate-and-term, but that varies. Ask the lender how your specific second lien will be classified before you set expectations.
What is the highest leverage on a super jumbo cash-out?
On a standard rental, maximum cash-out leverage steps down as the loan amount rises, with the lowest ceilings applying to loans in the super jumbo range. These are ceilings through select wholesale programs, subject to underwriting. Cash-out is not available above the top loan-size tier.
What happens if the combined payment pushes coverage below 1.00?
You can lower the cash-out amount, use the interest-only option, or ask about select programs that review coverage below 1.00. LTV and terms adjust in those cases, subject to underwriting.
Does the zero balance on my HELOC release the lien?
No. The line stays open and the lien stays on title until you request closure in writing and a release is recorded. Confirm the recording after the new loan funds.
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.
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, 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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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. CFPB: Regulation Z, Section 1026.36
2. Fannie Mae Selling Guide: Limited Cash-Out Refinance Transactions
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 to Finish a BRRRR Deal · Can You Get Approved for a Super Jumbo DSCR Cash-Out Refinance After Delisting? · Super Jumbo DSCR Cash-Out Refinance vs Portfolio DSCR Loan Through a Mortgage Broker
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.