The Quick Read: A lender underwrites this loan by sizing it against the lower of two limits, a value cap set by the appraisal and a rent limit set by coverage, then subtracting the payoff and the rolled-in costs from the new balance, so the costs shrink your cash-out proceeds and lift the payment rather than adding to what you can borrow. Every figure below is a ceiling through select wholesale programs, subject to underwriting.
- Rolled-in costs come out of your proceeds. They do not sit on top of the leverage cap.
- Coverage is retested on the new, larger payment, so rolling costs in can thin the ratio.
- Cash-out leverage on an investment property steps down as the loan grows, and cash-out stops above $3,000,000.
- Two appraisals are required above $2,000,000, and cash-out proceeds from the same loan do not count as reserves.
- The binding limit can be equity, rent, loan size, or credit, so find out which one binds first.
Most investors ask the wrong question here. They ask how much the lender will lend. The better question is what check lands in your account after the payoff and the costs are taken out of the new loan.
Key Terms Defined
Super jumbo: a loan big enough that lenders add extra review layers and cut leverage. No regulator draws the line, so each lender sets its own. Here it means loans above roughly $2,000,000, where the extra layers start.
DSCR (debt service coverage ratio): the property’s monthly rent divided by its full monthly obligation, meaning principal, interest, taxes, insurance, and any association dues. A reading of 1.00 means the rent just covers the payment.
Cash-out refinance: a new loan that pays off the old one and hands you the extra equity as cash.
Rolled-in closing costs: lender and third-party charges that are added to the new loan balance instead of paid out of pocket.
LTV (loan-to-value): the loan balance as a percentage of the appraised value.
Reserves: liquid cash left in your accounts after closing, counted in months of the property’s monthly obligation.
Seasoning: the waiting period a program wants between acquiring a property and refinancing it.
Interest-only period: a stretch of the loan term when the payment covers interest only, not principal.
How Does a Lender Classify the Deal First?
The first call is whether the loan is a cash-out or a payoff-only refinance. That label sets the leverage cap, and cash-out caps run lower than payoff-only caps at every size above $1,000,000.
Look at the ladder for loans between $2,000,000 and $3,000,000. On an investment property, the cap is 75% on a rate-and-term refinance and 60% on a cash-out refinance. A fifteen-point gap in leverage is large, so classification matters.
Rolled-in costs blur the line. Say your new loan only pays off the old one, but the lender also finances the closing costs. Some programs treat that as a rate-and-term deal with incidental cash back. Others call it cash-out the moment the new balance exceeds the payoff. The answer depends on the program, so ask before you assume the higher cap.
The Underwriting Sequence, Step by Step
Underwriters work through a fixed order. Each step can cap the loan.
1. Purpose and entity check. The file must be a non-owner-occupied investment property with a business-purpose attestation. Entity vesting is welcome, and layered entities are not.
2. Appraisal and rent opinion. Above $2,000,000, two appraisals are required. The appraisal also supplies the rent opinion, on the 1007 rent schedule for a single-family property or the 1025 small residential income form for 2-4 units.
3. Value basis. Inside a program’s seasoning window, sizing often follows cost plus documented improvements instead of the appraisal. Seasoning rules differ from program to program.
4. Leverage cap. The lender reads the ladder for your loan amount and transaction type. Cash-out caps sit lowest.
5. Rent limit. The lender finds the largest loan whose payment the rent covers at the required ratio.
6. The lower of the two. Whichever limit is smaller sets the loan.
7. Payoff and costs. The lender subtracts your existing payoff and the closing costs, including any prepayment charge on the old loan, from the new loan. What remains is your cash.
8. Coverage retest. Coverage is recomputed on the new payment.
9. Borrower layer. Credit score, housing history, reserves on the subject property, entity documents, insurance naming the right entity, title, and payoff statements.
10. Decision and conditions. Expect conditions on any file near a cap. A small appraisal miss can change the outcome.
Credit scores sit behind the leverage. The program floor is 660 on loans to $3,000,000 and 700 above $3,000,000. The top leverage cell in each band needs more. It needs 660 or better to $1,000,000, 700 or better from $1,000,000 to $1,500,000, and 720 or better from $1,500,000 to $3,000,000. A lower score takes a lower cell in the same band.
What Does “Rolled In” Actually Do?
Rolling costs in does not create extra borrowing power. It moves the costs from your pocket into the balance, and the balance pays for them out of your proceeds. The CFPB’s closing disclosure explainer makes the same point for consumer loans: rolled-in costs lower what you pay upfront but add to the overall cost through extra interest.
Run it as a percent of appraised value. Say your existing payoff equals 45% of value, and you are refinancing in the $2,000,000 to $3,000,000 band, where the cash-out cap is 60%. You have fifteen points of room. Costs paid in cash leave all fifteen points in your account, and you write a separate check for the costs. Costs rolled in come out of those fifteen points, so you net less than fifteen. The mechanics hold at any size.
| Factor | Costs paid in cash | Costs rolled in |
|---|---|---|
| Cash out of pocket at closing | Yes, the full costs | None |
| Net cash to you at the cap | Full room under the cap | Room minus the costs |
| Balance for the same net cash | Smaller | Larger by the costs |
| Payment and coverage | Lower balance, stronger ratio | Higher balance, thinner ratio |
| Pressure on the leverage cap | None | Costs count toward the cap |
The coverage effect is smaller than the loan growth. Taxes, insurance, and dues do not change with leverage. If the balance grows 3%, the full monthly obligation grows by less than 3%, and coverage slips by that smaller amount. On a file that clears 1.00 by a hair, that slip can decide the outcome.
Clearing 1.00 also does not mean the property cash flows well. Coverage is a screening test. It is not a return measure, so check the cash left after every expense before you decide how much to roll in.
Lendmire’s piece Can You Get a Super Jumbo DSCR Cash-Out Refinance With Closing Costs Rolled In? covers the yes-or-no question. This article covers the mechanics behind it.
Which Limit Binds First?
You are not facing one limit. You are facing four, and the tightest one wins. Diagnosing it tells you the right fix.
| Your situation | Binding gate | What moves it |
|---|---|---|
| Strong rent, modest equity | Leverage cap | Higher appraised value |
| Large equity, thin rent | Rent limit | Higher rent or lower balance |
| Appraisal comes in short | Value, and often rent too | Rebuttal with better comps |
| Loan above $3,000,000 | Size tier, no cash-out | Smaller loan or a different structure |
| Credit at 680 or below, loan above $1,500,000 | Credit tier, no cash-out | Higher score or smaller loan |
| Short-term rental above $2,000,000 | Program size ceiling | Long-term rent underwriting |
Luxury comps are thin, so appraisal risk grows with the loan. A weak appraisal can cut value and rent together. That double hit is why a super jumbo file near a cap needs breathing room.
What Changes at Super Jumbo Size?
Leverage steps down as the loan climbs, and the reviews multiply. Here is the ladder for an investment property at 1.00 coverage or better, by loan amount.
| Loan amount | Purchase | Rate-and-term | Cash-out |
|---|---|---|---|
| $150K to $1M | 80% | 80% | 75% |
| $1M to $1.5M | 75% | 75% | 70% |
| $1.5M to $2M | 75% | 75% | 60% |
| $2M to $3M | 75% | 75% | 60% |
| $3M to $4M | 65% | 65% | — |
| $4M to $6M | 60% on review | 60% on review | — |
| $6M to $10M | 60% on review | 60% on review | — |
The bands are loan amounts, not purchase prices. Multiply price by leverage first, then read the band for the resulting loan.
Cash-out proceeds follow their own rule. At or below 60% LTV, proceeds are unlimited. Above 60%, they are capped at $1,500,000. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Several other overlays kick in at the top of the range:
- Appraisals: two, above $2,000,000.
- Reserves: six months of the property’s full monthly obligation on the subject property, or twelve for a first-time investor. Interest-only files count interest, taxes, insurance, and dues. Other financed properties add no extra reserves.
- Reserve sourcing: cash-out proceeds from the same loan do not count. The overlay above $3,000,000 says so outright, and planning as if it applies everywhere is the safe move.
- Above $3,000,000: a 700 credit floor, a clean housing history with no 30-day lates in 24 months, 48 months after a credit event, citizens and permanent residents only, no rural property, and no more than ten acres on a non-rural one.
- Portfolio size: up to 20 financed properties.
Interest-only is a real tool at this size. Select programs offer a 120-month interest-only period on 30- and 40-year terms, up to 75% leverage, qualified on interest, taxes, insurance, and dues. The lower payment helps coverage. Because it carries lower principal paydown, treat it as a cash-flow choice and not a free upgrade. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
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 General Rule Breaks
The ladder is the rule. These cases are where it bends or snaps.
Big loans, no cash-out. No cash-out above $3,000,000, and none for credit at 680 or below above $1,500,000. If you need cash at that size, the structure usually changes, such as a smaller loan or a different asset.
Short-term rentals. Short-term rental files qualify at 1.00 coverage or higher and stop at $2,000,000. Income comes from twelve months of operating history on a refinance, counted at 80% of gross, and the investor needs recent experience owning income property. 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.
Coverage under 1.00. Select programs in the network will look at coverage under 1.00 on loans up to $2,000,000. Leverage drops, and LTV and terms adjust, subject to underwriting. Rolling costs in is harder on a file that already starts below the line.
Condos. Warrantable condos use the main ladder. Non-warrantable condos are capped at 75% and $1,500,000, so check this before assuming a luxury condo fits.
Rural and acreage. Rural collateral of five acres or less tops out at 75%, and only on loans at or below $3,000,000. Above $3,000,000, no rural property, and no more than ten acres on a non-rural one.
Seasoning. Inside a program’s seasoning window, sizing tracks cost and documented improvements rather than appraised value. Programs differ here, so match your purchase date to a program before you order the appraisal.
Layered entities. One entity vesting title is welcome. Stacked entities are generally not supported.
The Business-Purpose Footing
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.
Regulation Z exempts credit extended primarily for a business or commercial purpose, which is why the review runs on the property’s rent and not on personal income. That exemption also means consumer disclosure forms and timing rules do not apply to these loans. Purpose is judged transaction by transaction. If you ever occupy the property, the loan can fall outside the program. Read your terms, including prepayment provisions, since you carry more of the diligence yourself.
What Documents Does the Lender Need?
- Entity documents and a signed business-purpose attestation.
- Current leases, or a plan for the appraiser’s rent opinion.
- A payoff statement on the existing loan, including any prepayment charge.
- Proof of insurance naming the correct entity.
- Title work and a property tax statement.
- Statements showing reserves outside the loan proceeds.
- For short-term rentals, twelve months of operating history and documentation of local permission.
The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, reserves, the appraisal, the entity, and title are all still reviewed.
When Rolling Costs In Is the Wrong Move
Skip it when the file is tight. Four situations stand out:
- Coverage sits near the floor. The added balance can push the ratio under the line.
- You are at the leverage cap. Costs rolled in crowd out proceeds you may need.
- Reserves are thin. Proceeds will not count as reserves, so the extra cash may not rescue the file.
- The appraisal is a risk. A short appraisal on a loan sized to the cap can convert a rolled-in file into a cash-to-close file.
Alternatives exist. You can pay the costs in cash, trim the loan to leave room, add rent through a lease-up, or pick a program that sizes on a stronger value basis. A broker who shops multiple wholesale lenders can test each structure against the lenders that write loans at your size. The best fit depends on your property type, credit, leverage need, and documentation.
Lendmire’s complete DSCR loans guide covers how coverage, leverage, and documentation work across the whole program.
Frequently Asked Questions
Can closing costs be rolled into a super jumbo DSCR cash-out refinance?
Often yes, through select programs, subject to underwriting. The costs are financed inside the leverage cap, so they reduce your net proceeds instead of adding to the loan limit. Some programs also limit how much can be financed, so ask before you assume.
Does the lender test coverage on the new payment?
Yes. Coverage is recomputed on the new balance, including any rolled-in costs. Taxes, insurance, and dues stay the same, so coverage falls by less than the balance grows. A file near the line can still be pushed under.
Can cash-out proceeds count as reserves?
No, on the large-loan overlay above $3,000,000, and you should plan as if the same holds elsewhere. Reserves are six months of the property’s monthly obligation on the subject property, or twelve for first-time investors. You need that liquidity outside the new loan.
How does a payoff-only refinance differ from a cash-out?
A payoff-only refinance carries higher leverage caps at every size above $1,000,000. For example, on an investment property between $2,000,000 and $3,000,000, the cap is 75% versus 60% on cash-out. Whether financed costs and small cash back keep a file in the payoff-only category depends on the program.
Is cash-out available at my loan size?
It is available through $3,000,000 on an investment property, with leverage that steps down by band. Proceeds are unlimited at or below 60% LTV and capped at $1,500,000 above that. Cash-out is not available above $3,000,000, and not for credit at 680 or below above $1,500,000. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
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 mortgage broker that arranges business-purpose investment financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
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
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB, Closing Disclosure explainer
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: How Lenders Underwrite a Super Jumbo DSCR Cash-Out Refinance Within Six Months of Purchase
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.