The Quick Read: Super jumbo DSCR loans let a founder buy or refinance a high-balance rental by qualifying primarily on the property’s rent covering its payment, subject to lender guidelines, with balances reaching $10,000,000 on review through select wholesale programs, though leverage steps down as the loan grows. A DSCR loan is a business-purpose investor loan. That fits a founder whose paycheck just ended and whose wealth sits in cash, escrow, and one lumpy payout.
- What is tested: the property’s rent against its full monthly obligation, plus credit, reserves, and appraisals.
- Leverage steps down: typically 80% on an investment-property purchase up to $1,000,000, then 65% from $3,000,000, and 60% on review above $4,000,000.
- Credit and cash: a 660 floor, 700 above $3,000,000, two appraisals above $2,000,000, and six months of reserves on the subject property.
- Not all sale money is spendable: holdbacks and earnouts usually are not cash you can show today.
All figures here are ceilings through select lenders in the network, subject to underwriting, and not a commitment to lend.
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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.
Where Does This Fit After the Sale?
It fits after you know your real spendable number. The headline price is not that number. Taxes, advisor fees, debt payoffs, escrow holdbacks, and earnouts all come out or arrive later.
One wealth-planning firm, Iconic, puts representation-and-warranty escrow holdbacks at roughly 5–15% of the price, held 12–18 months. Treat that as one practitioner’s estimate, because every deal reads differently. The point is that escrowed money and earnouts are rarely liquid.
That matters because a lender wants to see reserves it can count. Whether escrowed proceeds count is a lender-by-lender question. Ask before you assume.
Most advisors also suggest a pause before deploying. A pause is a good moment to line up financing, because the loan is the slow-moving piece of a real estate purchase.
What Makes a Loan Super Jumbo?
No federal rule defines it. Each lender or investor draws its own line. The only federal line is the conforming limit, which is the cap on loans the housing agencies can buy. Per Calculated Risk, quoting the FHFA release, that cap is $832,750 for one unit in most of the country. The high-cost ceiling is $1,249,125. Anything above the cap is jumbo.
DSCR loans are not agency loans, so that limit is only a reference point. Across the wholesale network Lendmire works with, “super jumbo” in practice means balances past $1,000,000 that trigger tighter leverage, and past $3,000,000, where the standard program stops and a different set of programs takes over.
Here is how the ladder typically reads for an investment property, subject to underwriting:
| Loan size | Purchase or rate-and-term LTV |
|---|---|
| $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 |
LTV means loan-to-value, the loan as a share of the property’s value. The top cell in each band needs a certain score: 660 or better up to $1,000,000, 700 or better from $1,000,000 to $1,500,000, 720 or better from $1,500,000 to $3,000,000, and 700 or better above $3,000,000. The program floor is 660 on loans to $3,000,000 and 700 above that, the super jumbo overlay. A lower score takes a lower leverage cell inside the same band. Above $4,000,000 every request is reviewed case by case before submission, and it is purchase or rate-and-term only.
For the complete picture of the base program, see Lendmire’s complete DSCR loans guide.
How Does Underwriting Treat a Founder With No Paycheck?
It treats the property as the borrower. The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Here is the usual order.
1. Income from the appraisal. For a single-family rental, the appraiser’s market-rent schedule (the 1007 form) sets the rent. For two to four units, the operating income statement (the 1025 form) does. At this loan size, the rent figure matters as much as the value.
2. The full monthly obligation. The lender compares that rent to principal, interest, taxes, insurance, and any HOA dues. Flood or higher insurance can move the real ratio away from your first estimate.
3. Credit and housing history. Above $3,000,000 the network’s overlay adds clean mortgage history, a longer wait after any credit event, citizens and permanent residents only, and no rural property.
4. Appraisals. Above $2,000,000, two appraisals are required.
5. Reserves. Programs typically want six months of PITIA on the subject property, and twelve for first-time investors. PITIA is principal, interest, taxes, insurance, and HOA dues. On interest-only loans the count uses ITIA, which is the same list without principal. Reserves on other financed properties are typically not added, and a borrower can hold up to 20 financed properties.
6. A paper trail for the money. The lender will want to see where the cash came from. Keep the sale closing statement, the purchase agreement, and the wire confirmation.
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. That does not mean compliance-free. A Hunton Andrews Kurth memo warns that business purpose is not the same as exempt from every rule, so the lender must still document the purpose.
How Is the Coverage Ratio Calculated?
Divide monthly rent by the full monthly obligation. A result of 1.00 means the rent exactly covers the payment. Above 1.00 means surplus. Below 1.00 means a shortfall.
Formulas differ across the market. Some lenders use rent over PITIA. Others use net operating income over debt service. Ask which one your quote uses, because the same building can produce two different ratios.
Run it on a luxury duplex whose appraised rent covers the full obligation about 1.2 times. That reads as comfortable coverage. A building at 0.9 covers only most of the payment.
At 1.00 or higher, a property can earn the full leverage on the ladder. 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. Never plan around the lower path until a lender has reviewed the file.
A passing ratio is not a profit forecast. It ignores vacancy, repairs, capital projects, and management. A founder with plenty of cash can absorb that. The ratio only tells you the lender’s test was met.
Cash, Leverage, or Both?
The answer depends on what you want the cash to do. A mix is common.
| Choice | Liquidity left | Main risk | Often fits when |
|---|---|---|---|
| All cash | Lowest | Capital locked in one asset | Price is modest vs. net worth |
| Leveraged | Highest | Debt on a concentrated bet | You want cash for other uses |
| Mix | Middle | Two moving parts | Escrow cash arrives later |
Leverage steps down as loans grow, so a large purchase still needs substantial equity. Sale proceeds make that workable. The property must still carry its own payment.
Purchase or Cash-Out on Property You Already Own?
Cash-out tightens as balances rise. On standard rentals it runs 75% up to $1,000,000, and it steps down through the middle bands to 60% by $1,500,000. Proceeds are unlimited at or below 60% LTV, and capped at $1,500,000 above 60%. Above $3,000,000 there is no cash-out at all. Cash-out proceeds also do not satisfy reserves under the super jumbo overlay. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
A founder hoping to pull sale proceeds back out of a trophy property should expect that ceiling. For the details, read Lendmire’s guide to super jumbo DSCR cash-out rules for founders.
What Does the Interest-Only Runway Do?
It lowers the early monthly obligation, which helps coverage. Programs typically offer a 120-month interest-only period on 30- and 40-year terms, up to 75% LTV, with coverage of 0.75 or better qualified on interest, taxes, and insurance. The tradeoff is that principal is not paid down during that period. For the mechanics, see Lendmire’s piece on using interest-only on a super jumbo DSCR loan after a company sale.
How Should You Set Up Entity and Title?
Decide before you make an offer. Entity vesting is welcome, with no layered entities, subject to program eligibility. If a trust holds title, expect to provide a certification of trust and proof of the trustee’s borrowing authority.
A 1031 exchange adds a wrinkle. You cannot exchange a business itself, because business interests such as stock and partnership interests are excluded. Only real property inside the sale can qualify. If it does, the IRS 45-day identification deadline and 180-day exchange period run at the same time, per Fidelity, and the entity that sells must usually be the one that buys. Pick your loan path and vesting entity before the sale closes. Tax treatment varies; consult a qualified professional.
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 Do the General Rules Break?
- Short-term rentals. Coverage must be 1.00 or higher, loans run to $2,000,000, and income is counted at 80% of gross rent. Programs want twelve months of operating history on a refinance, or the appraisal’s short-term-rent analysis on a purchase. They also want 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.
- First-time investors. Reserves rise to twelve months.
- Rural or acreage collateral. Rural property of five acres or less can reach 75%, only at $3,000,000 or below. Acreage runs up to twenty acres to $3,000,000. Above $3,000,000: no rural property, and no more than ten acres on a non-rural one.
- Condos. Non-warrantable condos reach 75% and $1,500,000.
- Earnout recipients. An earnout is a future income event, not cash on hand today.
- No real estate in the sale. A founder with only equity proceeds has no 1031 option. The purchase is a plain after-tax redeployment.
What Is the Order of Operations?
1. Get your net, spendable number from your CPA after holdbacks and fees.
2. Decide whether any real property qualifies for an exchange, and note the IRS deadlines.
3. Choose the vesting entity with your attorney.
4. Share the property’s rent estimate and your credit profile with a broker, so the size and structure are tested against the ladder.
5. Order appraisals and gather the sale paperwork and bank records.
6. Confirm reserves and where the equity will come from.
Who Is This Not For?
A founder who wants no debt, no landlord duties, or a quick exit should look elsewhere. So should someone whose rent cannot cover the payment on any structure. A concentrated real estate position can also be a poor fit if the sale was already a single large bet.
What Should You Ask Your CPA and Advisor?
- Does any part of the sale qualify for an exchange?
- How should the sale be staged against the purchase?
- Which entity should hold title?
- How much liquidity should stay outside the property?
- Is the loan recourse, and what does that mean for the rest of my balance sheet?
Key Terms Defined
DSCR: debt service coverage ratio, the property’s rent divided by its monthly obligation.
Super jumbo: a loan size above jumbo thresholds that each lender sets for itself.
PITIA: principal, interest, taxes, insurance, and HOA dues, the full monthly obligation.
ITIA: interest, taxes, insurance, and HOA dues, used when a loan is interest-only.
Vesting: how title to the property is held, such as in an LLC or trust.
Holdback: part of the sale price held in escrow after closing.
Frequently Asked Questions
Do I need a paycheck to qualify?
No. The lender still reviews credit, reserves, and appraisals.
Can I use sale proceeds as the down payment?
Usually yes, if the money is documented. Keep the closing statement and wire confirmation. Escrowed or earnout money generally does not count as cash today.
How much liquidity should I keep?
Programs typically require six months of reserves on the subject property, subject to underwriting. Many founders keep more, since the ratio does not cover vacancy or repairs.
Does passing the ratio mean the property cash-flows?
Not necessarily. The ratio tests rent against the payment only. Maintenance, vacancy, and management are outside it.
How does this interact with tax deferral?
A 1031 exchange applies only to real property, not to the business itself, and its IRS deadlines are fixed. Line up the loan path early and confirm the plan with your CPA.
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. Lendmire is a broker arranging business-purpose financing through select lenders in 41 markets, including Washington, D.C., and 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 is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 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. Iconic, Managing Proceeds After Selling Your Business
2. Calculated Risk, quoting the FHFA release
3. Hunton Andrews Kurth, Beware of Business Purpose
4. Deferred.com, 1031 Exchange on the Sale of a Business
5. Fidelity Learning Center, What Is a 1031 Exchange
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: Traditional Jumbo vs Super Jumbo DSCR After a Company Sale · Can a Founder Buy a Super Jumbo DSCR Multi-Unit After a Company Sale? · Cross-Collateral Blanket Loan vs Separate Super Jumbo DSCR Loans
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
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.