The Quick Read: Sometimes, but not at full size and not at full leverage: select lenders in Lendmire’s wholesale network review coverage from 0.75 to 0.99 up to $2,000,000, with LTV and terms adjusted, subject to underwriting, and the file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
- Sub-1.0 files cap at $2,000,000, so loans in the super jumbo tiers above that need coverage of 1.00 or better.
- Sale proceeds are not recurring income. They show up as reserves, down payment and credit depth.
- Interest-only structures are tested on the interest-only payment, with coverage of 0.75 or better.
- Cash-out proceeds never count toward reserves.
- Every file is underwritten individually. Nothing here is a commitment to lend.
A founder who just sold a company has a strange profile for most loan officers: large balance sheet, no paycheck. A DSCR loan fits that profile better than most products because the property’s rent is the main test. The catch is that “no paycheck” does not mean “no rules,” and the size of the loan decides which paths stay open.
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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.
What Does Sub-1.0 Actually Mean?
Sub-1.0 means monthly rent does not fully cover the monthly obligation. The ratio is monthly rent divided by the full payment: principal, interest, taxes, insurance and association dues. At 1.00, rent equals the payment. Below 1.00, the owner covers the gap from other funds.
Across the wholesale network, 1.00 earns full leverage. Select programs will go lower, from 0.75 to 0.99, up to $2,000,000. LTV and terms adjust, subject to underwriting. That tradeoff is the whole story: you give up leverage and accept tighter terms in return for holding a property whose rent does not carry itself.
A ratio over 1.00 is not proof of cash flow either. Vacancy, repairs and management still sit outside the number.
Key Terms Defined
DSCR: Monthly rent divided by the full housing payment on the property.
Sub-1.0: A file where the ratio is calculated and comes in under 1.00, accepted by select programs at adjusted LTV and terms.
No-ratio: A file where the ratio is not used to qualify. Through select wholesale programs it reaches $2,000,000, subject to underwriting, with a seven-year clean housing history and 0x30x24 mortgage lates.
Super jumbo: A lender-defined size tier, not a legal category. In this network it generally means balances above $2,000,000.
Reserves: Liquid assets held after closing. The subject property needs six months of PITIA, or ITIA on interest-only, and twelve for first-time investors.
Where the Size Ceiling Bites
The main conflict for this founder is size. Sub-1.0 files run to $2,000,000. No-ratio files run to $2,000,000. Above that, the super jumbo ladder applies, and it assumes coverage of 1.00 or higher.
| Loan size | Purchase / rate-term LTV | Cash-out LTV | Credit for this leverage |
|---|---|---|---|
| $150K–$1M | 80% | 75% | 660+ |
| $1M–$1.5M | 75% | 70% | 700+ |
| $1.5M–$2M | 75% | 60% | 720+ |
| $2M–$3M | 75% | 60% | 720+ |
| $3M–$4M | 65% | — | 700+ |
| $4M–$6M | 60% on review | — | 700+ |
Every figure is a ceiling through select wholesale programs, subject to underwriting. Above $4,000,000, each request is reviewed case by case before submission, purchase or rate-and-term only. The $6M–$10M band follows the same case-by-case rule at 60% on review.
Credit needs a closer read. The program floor is 660 at every size. Above $3,000,000 the super jumbo overlay raises it to 700, with 0x30x24, 48-month event seasoning, citizens and permanent residents only, no rural property and ten acres maximum. A lower score inside a band simply takes a lower leverage cell.
Two appraisals are required above $2,000,000. Plan for that when scheduling.
Picture a founder eyeing a $3,500,000 coastal property whose rent covers about 0.85x of the payment. On a purchase, the ladder tops out at 65%, but coverage under 1.00 is only a path to $2,000,000. At that size the file needs 1.00 or better, so the investor either brings more down payment to shrink the loan under the sub-1.0 ceiling or restructures the deal.
Why Sale Proceeds Don’t Count as Income
Proceeds from a company sale or earnout are usually treated as one-time events, not recurring income. That is fine here, because the loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Traditional personal-income documentation is not the test. Business-purpose investor loans are reviewed differently from a standard owner-occupied mortgage.
The wealth still does real work. It appears in three places:
- Reserves. Six months of PITIA on the subject property, twelve for first-time investors. No extra reserves are required for other financed properties, and the program allows up to 20 financed properties.
- Down payment. A sub-1.0 file leans on lower leverage, so more cash goes in at the start.
- Credit depth. Clean history and strong scores carry more weight when coverage is thin.
Seasoning and sourcing matter. Reserves must come from other assets. Cash-out proceeds from the same loan never satisfy them, a rule that trips up founders who plan to pull equity and count it twice.
What Compensates for Thin Coverage?
Select programs tolerate a shortfall when the rest of the file is stronger. On most files that means:
1. Lower LTV. The leverage ladder steps down further under 1.00, with terms adjusted.
2. Higher credit. The 660 floor is the minimum, and sub-1.0 files generally do better with scores well above it.
3. Deeper reserves. More liquid assets than the six-month minimum make the file easier to review.
4. Experience. Short-term rental and no-ratio paths ask for twelve months owning income property in the last thirty-six.
One thing needs saying plainly. A sub-1.0 file is a deliberate negative-carry decision. The founder funds the monthly gap from outside money. A person holding a high-value, low-yield property for appreciation or lifestyle reasons can make that choice with eyes open. A person hoping the property will pay for itself should look elsewhere.
Interest-Only: The Lever That Moves the Number
Interest-only is often the cleanest way to bring a file into range. The program offers a 120-month interest-only period on 30- and 40-year terms, capped at 75% LTV, and is reviewed on the interest-only payment with coverage of 0.75 or better.
That means the denominator is smaller. A property that reads under 1.00 on an amortizing test may read noticeably higher on an interest-only test. Lendmire’s piece on using interest-only on a super jumbo loan after a company sale goes deeper on that structure.
The tradeoff is the reset. When the interest-only period ends, the payment steps up, and a property that barely cleared may fall further under 1.00. Model the reset before choosing the structure.
Sub-1.0, No-Ratio and Asset Paths Compared
Founders often conflate these. They are three different tests.
| Path | What the lender tests | Typical fit | Main tradeoff |
|---|---|---|---|
| Sub-1.0 DSCR | Ratio is calculated, shortfall accepted | Modest gap, strong credit | Lower LTV, adjusted terms |
| No-ratio | Ratio not used to qualify | Deep credit and reserves | Clean housing history required, not for STR |
| Asset-based | Borrower’s liquid balance sheet | Founder with mostly liquid wealth | Different underwriting, not DSCR |
On the no-ratio path, availability is limited to select wholesale programs up to $2,000,000, subject to underwriting. It requires a seven-year clean housing history and 0x30x24, and no minimum ratio is published. It leans on credit depth and reserves. Short-term rentals are excluded.
For a founder whose wealth is mostly liquid, an asset path may fit better than DSCR at all. Asset depletion tests the borrower’s balance sheet rather than the property’s rent, and it is a separate product with its own rules.
Short-Term Rentals Are a Different Test
A luxury short-term rental generally needs coverage of 1.00 or higher. Income is based on twelve months of operating history on a refinance, or the appraisal’s short-term-rent analysis on a purchase, counted at 80% of gross. Loans run to $2,000,000, and the borrower must be an experienced investor. Short-term rentals are not on the no-ratio path.
Because only 80% of gross counts, nightly revenue has to run roughly a quarter above the payment before the file clears 1.00 on paper. Short-term rental rules vary by city, county, HOA and property type, so investors should confirm local rules before relying on projected rental income. Lendmire’s article on super jumbo sub-1.0 requirements for luxury short-term rental operators covers that file type in detail.
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.
The Business-Purpose Frame
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. Federal rulemaking treats credit for investment property as business-purpose, as the CFPB’s final ability-to-repay rule explains.
Purpose still matters. A CFPB reference on the Truth in Lending Act describes credit to acquire or improve non-owner-occupied rental property as business-purpose credit. A cash-out used for personal spending is a different conversation, so keep the use of proceeds tied to the investment. Holding title in an LLC is common, subject to program terms, but it usually does not remove the personal guaranty.
Ways to Improve the Ratio Before You Apply
1. Increase the down payment. A smaller loan means a smaller payment and often a better leverage cell.
2. Test interest-only. Compare the interest-only and amortizing readings.
3. Document rent properly. Use an appraisal with a rent schedule (Form 1007 for one unit, Form 1025 for two to four units) or a lease.
4. Pick the right size. Staying at or below $2,000,000 keeps the sub-1.0 and no-ratio paths open.
5. Prepare entity documents. If closing in an LLC, have the formation papers ready.
6. Source the reserves. Asset statements should show funds that are not cash-out proceeds.
Founders with more equity than one loan can release often spread it across several mid-size loans instead of one large one. On a portfolio of mid-size properties, 80% purchase leverage to $1,000,000 and the $1,000,000-to-$3,000,000 steps are friendlier than the top of the ladder.
If the property is acreage, leverage rules change by size.
What Could Go Wrong
Sustained negative carry is the first risk. The gap is real money every month, and it keeps running through vacancy. An interest-only reset is the second: the payment steps up and coverage falls. Vacancy is the third, because a property sitting at 0.90 can slide further when a lease turns over.
Cash-out has its own limits. Proceeds are unlimited at or below 60% LTV and capped at $1,500,000 above 60%. There is no cash-out above $3,000,000, and none for credit of 680 and below above $1,500,000. A founder planning to harvest equity to fund the carry should read those limits first. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Ask a qualified professional about entity structure, the personal guaranty and post-sale planning. Tax treatment varies; consult a qualified professional.
Who This Isn’t For
Skip this path if you need a loan above $2,000,000 and your rent covers less than the payment. Skip it if you want a primary residence. And skip it if you expect the property to cash flow on its own. Those cases point to a lower balance, a different product or a different property.
Frequently Asked Questions
Can sale proceeds count as income on a DSCR file?
Generally no. A company sale is a one-time event, not recurring income. The loan is reviewed primarily on property-level rental income, subject to lender guidelines, and the proceeds matter as reserves, down payment and credit depth.
What is the largest sub-1.0 loan available?
Select programs in the network review coverage from 0.75 to 0.99 up to $2,000,000, with LTV and terms adjusted, subject to underwriting. Above that, the super jumbo tiers assume coverage of 1.00 or higher.
Is sub-1.0 the same as no-ratio?
No. On a sub-1.0 file the ratio is calculated and the shortfall accepted. On a no-ratio file, offered through select wholesale programs up to $2,000,000 and subject to underwriting, the ratio is not used to qualify. It requires a seven-year clean housing history and 0x30x24.
Can I use cash-out proceeds as my reserves?
No. Cash-out never satisfies reserves. Six months of PITIA on the subject property, twelve for first-time investors, must come from other assets.
Does interest-only help a thin file?
Yes, often. The program tests the interest-only payment and looks for coverage of 0.75 or better, with a 120-month interest-only period capped at 75% LTV. Model the payment step-up when the period ends.
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 mortgage broker arranging business-purpose financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Start with the complete DSCR loans guide.
For current guidelines and terms, see Lendmire’s super jumbo DSCR loan programs page.
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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References
1. Federal Register – CFPB Ability-to-Repay Final Rule
2. CFPB Truth in Lending Act reference
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 on an IO ARM vs Fixed Loan · How Self-Employed Investors Qualify for a Super Jumbo DSCR Loan · Can an LLC Get a Super Jumbo DSCR Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.