How To Finance New Construction On A Super Jumbo Loan — The Quick Read: A super jumbo construction loan is almost never one loan. It is two: a private or non-QM construction facility that funds the build in draws, followed by a separate permanent loan — often a DSCR loan sized to the property’s rent — that takes out the construction debt once the certificate of occupancy is issued. No regulator defines “super jumbo,” so the size threshold, leverage, and documentation all come down to which lender’s guidelines the file lands in.
That framing matters because most borrowers searching this term assume a single lender carries them from dirt to finished home to permanent mortgage. That almost never happens at scale, and understanding why changes how you plan the whole project.
Key Terms Defined
Super jumbo loan: an informal, lender-invented pricing tier for mortgages well above standard jumbo size — commonly discussed above roughly $3 million, though no agency sets that line.
DSCR loan: a loan sized to a rental property’s income rather than the borrower’s traditional personal-income documentation; DSCR stands for debt-service coverage ratio, the rent divided by the full monthly payment.
Draw schedule: the sequence of partial fund releases during construction, each tied to an inspected phase of the build — foundation, framing, roof, and so on.
As-completed appraisal: a valuation that estimates what the property will be worth once construction finishes, used to size the construction loan before a single wall goes up.
Certificate of occupancy (CO): the local government’s sign-off that a structure is safe to live in — a required milestone before most permanent takeout loans will fund.
The Setup: Why Two Loans, Not One
Ground-up construction and rental-income permanent financing sit on opposite ends of the risk spectrum, which is exactly why lenders rarely combine them for investment property at scale.
A construction lender is underwriting an unbuilt asset against a budget and a builder’s track record. A DSCR lender is underwriting a finished, rentable asset against its supportable rent. Those are different skill sets, different risk appetites, and — at super jumbo size — usually different capital sources entirely.
One-time-close construction-to-permanent products exist. But banks and credit unions overwhelmingly offer them as owner-occupant products, using conventional underwriting: traditional employment income, debt-to-income ratios, and full documentation. For an investor building a rental at seven or eight figures, that door is mostly closed. The realistic path involves two closings: a construction loan to build it, and a separate DSCR loan to hold it.
Key takeaways before the mechanics:
- Construction financing and DSCR permanent financing are separate products for almost every investor at super jumbo size.
- DSCR loans fund completed, occupancy-certified rentals — never ground-up construction itself.
- Across select lenders in Lendmire’s wholesale network, permanent super jumbo files run from $300,000 to $30,000,000 across two overlapping programs, each with its own leverage ladder.
- Leverage steps down as the loan size climbs, and every file above $4,000,000 gets reviewed case by case before submission.
- The appraiser’s rent opinion, not a lease, typically sets the qualifying income on a brand-new build.
Step One: The Construction Phase Runs on Its Own Rules
The build itself is financed by a private or non-QM construction lender, and it funds through staged draws rather than a lump sum — a structure meant to protect the lender against a half-finished project.
A typical single-family draw schedule breaks the budget into phases. These include foundation, framing, dry-in (roof and windows), mechanical/electrical/plumbing rough-in, and interior finishes. Lenders release a final draw at certificate of occupancy. Most single-family projects run four to six draws. Larger custom homes or multi-unit projects can run eight or more.
Every draw requires a third-party inspection confirming the prior phase is actually done before funds move. Lenders also commonly hold back 5% to 10% of each draw until final completion — insurance against a subcontractor who finishes rough work, gets paid, and disappears before the punch list is done. That holdback typically releases at the final draw alongside the certificate of occupancy.
Lenders generally size the construction loan amount to the lesser of the project’s hard cost or the appraiser’s as-completed value. This comes from an “as-completed” or “subject-to-completion” appraisal, which values the finished home before it exists on paper. When the build wraps, an appraiser (sometimes the original one) returns to certify that the property was actually built as described. This commonly uses Form 1004D.
Step Two: The DSCR Takeout Only Starts After the CO
The permanent DSCR loan does not exist until the property is finished, occupancy-certified, and either leased or supported by market rent. That’s the hard line — not a soft guideline.
Trade practice across the DSCR space is explicit that these loans are allowed once a property is fully built with a CO issued, rent-ready or leased, and the appraisal supports market rent. They are not available for ground-up construction, heavy rehab, incomplete structures, properties without utilities, or anything missing a CO. If you’re picturing a DSCR loan funding the framing crew, that’s the wrong tool.
Once the CO is in hand, the property is underwritten the way any DSCR rental is: on what the property can rent for, not what the borrower earns on a tax return. Because a brand-new build has no lease history, the rent used for lender review typically comes from the appraiser’s opinion rather than an existing tenant check. For a single-family rental, that figure comes from Fannie Mae’s Form 1007 rent schedule, built on comparable rental listings — and for a 2-4 unit property, the appraiser instead completes Form 1025. Underwriting convention generally uses whichever number is lower between the appraiser’s market rent and an actual signed lease, never whichever number is more favorable to the borrower.
Investors typically time the DSCR application to land before the construction loan matures. They start the permanent-loan file with rental comps, floor plans, and projected rent details well ahead of the projected CO date. This matters because the appraisal, underwriting, and any credit review all take real time to move through.
What Size and Leverage Actually Look Like
For high-income, high-net-worth borrowers building or holding property at super jumbo size, Lendmire’s complete DSCR loans guide walks through the broader qualification menu — this section covers what applies specifically once a build converts to a permanent DSCR loan.
Across select lenders in Lendmire’s wholesale network, permanent financing on a completed super jumbo build typically runs from $300,000 to $6,000,000 through a portfolio non-QM program. A separate bank portfolio program carries twelve-month-statement files up to $30,000,000 on its own ladder: 65% loan-to-value to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% or the band’s ceiling, whichever is lower. These are two distinct programs on two distinct size ladders, not one continuous scale. The bank program’s own tier begins above $4,000,000 and overlaps the portfolio program up to $6,000,000.
Leverage on investment property steps down as loan size grows. On a purchase, typical ranges through select wholesale programs run roughly 85% at the $300,000-to-$1,000,000 tier, stepping down through the 80% and 75% bands as balances climb into the low millions, and settling around 60% once a file crosses into the $3,000,000-to-$4,000,000 range — every figure above $4,000,000 gets reviewed case by case before submission, never presented as a flat ceiling. Second-home and primary-residence ladders run several points higher at comparable sizes, but a rental purchased for a tenant, not the borrower, qualifies under the investment property ladder.
Above roughly $3,000,000 on investment property, additional overlays typically apply through select programs. These include a 700 credit floor, longer housing-history requirements, and extended seasoning on any past credit event. Below that line, credit floors run lower on most files, generally around 660 to 680 depending on the program.
None of this is a promise of approval. Every parameter here reflects typical ranges on select wholesale programs, subject to full underwriting, and terms can shift by borrower profile, property type, and current guidelines.
Why the Appraisal Carries More Weight at This Size
At super jumbo balances, the appraisal does double duty — it sets both the value and the rent the lender will typically qualify against — and there’s usually no agency backstop absorbing the risk if either number is soft.
Two independent appraisals commonly apply above roughly $2 million. The rent figure the appraiser supports carries close to as much weight as the sale value itself. That treatment applies whether the underlying property is a resale or a brand-new build. But new construction adds a wrinkle: there’s no lease history and often no finished comparable next door, so the appraiser leans entirely on comps and market judgment.
If the appraised rent comes in low, a formal challenge process typically exists — submitting additional rental comps or requesting a second opinion of value before the deal works forward. This matters more on new construction than on an existing rental, because a low rent number on a brand-new build has nothing to offset it: no track record, no tenant, no trailing income to point to instead.
Short-term rentals complicate this further. Form 1007 is a long-term-lease rent schedule — it compares the subject to properties leased annually, not properties running nightly bookings. A DSCR lender that defaults to 1007-only underwriting on a genuine short-term rental will typically understate its earning power, which is why separate short-term rental income documentation paths exist. For a newly built short-term rental with zero booking history, the takeout lender is relying on market projection data rather than a comp-based lease schedule — a harder underwriting lift than a long-term rental with a straightforward Form 1007. Short-term rental rules can also vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income at all.
On the documentation side, qualification across these programs typically runs on 12 or 24 consecutive months of bank statements rather than traditional personal-income documentation — personal or business, with business statements requiring at least 25% ownership. Eligible deposits get reduced by a fixed or accountant-provided expense ratio to arrive at qualifying income, and transfers from the borrower’s own business into a personal account generally count in full. Asset-based paths also exist for borrowers who’d rather qualify on liquid reserves than on deposit history, though those run through separate calculations and generally cap out at lower leverage.
The Tradeoffs — and What Can Go Wrong
The two-close structure buys flexibility during construction, but it isn’t free. Every tradeoff below is a real cost of splitting the build and the takeout into separate loans.
A second closing means a second full underwriting event. New appraisal, new title work, new closing costs, and a fresh qualifying check on credit and income at the exact moment the property converts. If your financial picture changed during the build — income dipped, credit took a hit, reserves got tapped for cost overruns — that shows up here.
Construction loans carry a defined term, and delays cost money. Most construction facilities run somewhere in the range of six to twelve months before extension fees or a renegotiation kick in. A permitting delay, a weather delay, or a subcontractor who walks mid-project can push the timeline past that window.
Cost overruns land differently depending on the lender. In agency-backed conventional financing, Fannie Mae’s own construction-to-permanent guidance allows documented overrun costs to be added to the permanent loan amount in a two-closing transaction, as long as they’re paid directly to the builder at closing — but that’s agency contrast, not a DSCR rule. Non-QM and DSCR lenders handle overruns entirely at their own discretion since there’s no rulebook governing the takeout loan the way there is on a conforming file.
The rent can miss. Even a well-built home can appraise for a rent that doesn’t clear the coverage a lender wants to see. On investment property, sub-1.00 coverage scenarios are reviewed through select lenders in Lendmire’s network, but leverage and terms adjust downward when that happens — it isn’t a workaround, it’s a different (and more conservative) box.
Cash-out limits matter if the plan includes pulling equity later. Once the property is finished and leased, cash-out proceeds through the portfolio program are capped at $1,500,000 above 60% loan-to-value, with no published cap below that line on the bank program — a detail worth modeling before assuming a refinance will free up a specific amount of capital.
Across files like this, the deals that go smoothly almost always started the DSCR application well before the CO date — comps pulled, floor plans in hand, documentation staged — rather than treating the permanent loan as an afterthought once the builder hands over the keys. The files that stall are usually the ones where the borrower assumed the construction lender and the takeout lender were the same conversation.
Who This Structure Fits — and Who It Doesn’t
It fits an investor with construction experience or a vetted builder relationship, real liquidity for reserves and holdbacks, and a rent thesis they can defend with comps before the home is finished. Someone who has run a build before, knows how draws work, and has bank statements or liquid assets clean enough to qualify without tax-return income is the natural fit for this structure.
It fits less well for a first-time builder stretching every dollar of budget into hard costs, with nothing left over for reserves, delays, or a rent that comes in below projection. It also doesn’t fit an investor expecting one lender to carry them seamlessly from groundbreaking to permanent mortgage without a second underwriting event — that product mostly doesn’t exist at this size for non-owner-occupied property.
If you already own the land or you’re buying land and building in one package, the equity you bring to the construction loan often determines how much leverage you get on day one — a separate conversation worth having directly with a construction lender before the DSCR piece ever enters the picture. Lendmire’s write-up on financing new construction with a jumbo DSCR rental walks through that handoff in more detail for investors weighing the sequencing.
DSCR loans are business-purpose loans for investors. They cover non-owner-occupied property. That’s why lenders review them differently from a standard owner-occupied mortgage. The legal basis is the business-purpose credit exemption under Regulation Z. Practitioner commentary on this exemption confirms that loans to acquire, improve, or maintain non-owner-occupied rental property fall outside standard consumer-mortgage disclosure rules. This applies as long as the owner doesn’t plan to occupy the property more than 14 days a year. That’s also why DSCR loans are exempt from TRID’s Loan Estimate and Closing Disclosure timing rules. Those rules apply to a standard home purchase mortgage.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
This article is for general information only and isn’t legal or tax advice — investors should talk with a qualified attorney or CPA about how any of this applies to their own situation.
Frequently Asked Questions
Can I get one loan that covers both construction and the permanent DSCR mortgage?
Rarely, for investment property. One-time-close construction-to-permanent loans exist, but they’re primarily bank and credit union products built for owner-occupants, underwritten on traditional employment income and personal debt-to-income. Investors building a rental almost always use a separate construction lender for the build and a DSCR loan for the permanent takeout.
What rent number does the lender use if the home was just built?
Typically the appraiser’s opinion, not an existing lease, since a brand-new build has no rental history. For a single-family home, that comes from Form 1007; for a 2-4 unit property, from Form 1025. If the appraised rent looks light, most programs allow a rebuttal with additional comps before the deal works forward.
Does “super jumbo” mean a specific loan amount?
No — there’s no federal or agency definition. It’s a lender-invented pricing tier, commonly discussed above roughly $3 million, but where any individual lender draws that line varies by program.
What credit score do I need for a super jumbo DSCR takeout loan?
It depends on loan size and program. Across select lenders in Lendmire’s network, credit floors on investment property generally start around 660 to 680 on the lower end and step up to a 700 floor once a file crosses into the higher overlay tiers above roughly $3,000,000. Every figure is subject to full underwriting.
What happens if the appraised value comes in below the construction cost?
The construction loan amount is generally sized to the lesser of project cost or the as-completed appraised value, so a low appraisal can leave a funding gap the borrower has to cover out of pocket. This is one reason lenders want a realistic budget and comparable-sales support built into the plan before the first draw goes out.
If you’re building or holding a large rental property and want to see how the permanent DSCR side could work once construction wraps, Lendmire can help you compare loan options based on the property’s projected income, your credit profile, leverage, and your goals as an investor.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 40 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Single-Family FAQs: Construction-to-Permanent Financing
2. CFPB Regulation Z §1026.3 Exempt Transactions
3. Doss Law – Business Purpose Exemption Simplified
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.
