The Quick Read: Lenders underwrite this loan mainly on the property’s rent, then re-test that rent against the new, larger payment the cash-out creates. They also check the size-based leverage cap and confirm six months of reserves from your own liquid funds, not from the loan proceeds.
- Cash-out leverage steps down as the loan grows: typically 75% to $1,000,000, 70% to $1,500,000, and 60% from there to $3,000,000, subject to underwriting.
- Above $3,000,000, cash-out is not available through the network. Purchase and rate-and-term loans continue, and above $4,000,000 each request is reviewed case by case.
- Reserves run six months of PITIA on the subject property, or ITIA on an interest-only loan. Cash-out proceeds never count toward them.
- Two appraisals are typical above $2,000,000.
- Coverage of 1.00 or better earns full leverage. Sub-1.00 paths exist through select programs, with LTV and terms adjusted.
A rental that cleared easily at purchase can stumble at refinance. The cash-out raises the balance, the payment rises with it, and the coverage number falls. That is the core of this whole loan. This guide walks through it in the order an underwriter works the file.
Key Terms Defined
Super jumbo: a market label for loans well above the conforming limit. No agency defines it. The conforming baseline for a one-unit property is $832,750 per Orrick’s summary of the FHFA announcement, and loans above those limits are outside Fannie Mae and Freddie Mac eligibility.
DSCR (debt service coverage ratio): monthly rent divided by the monthly housing payment. At 1.00, the rent exactly covers the payment.
PITIA: principal, interest, taxes, insurance, and any HOA dues. ITIA is the same list without principal, which is what an interest-only loan pays.
Reserves: liquid cash left over after closing, measured in months of the payment rather than a flat dollar amount.
Cash-out refinance: a new, larger loan that pays off the old one and hands you the difference.
Seasoning: the waiting period between acquiring a property and refinancing it.
LTV (loan-to-value): the loan amount as a percentage of appraised value.
What Is a Super Jumbo DSCR Cash-Out Refinance?
It is a business-purpose loan on a rental property, large enough to sit well past agency limits, that replaces your current mortgage and pays you the extra equity. Lendmire arranges these through select lenders in its wholesale network, across 41 markets including Washington, D.C.
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. The Federal Register release on ability-to-repay rules explains that business-purpose loans fall outside those consumer rules. That is why the property’s rent, not your tax return, leads the file.
“Super jumbo” has no fixed dollar line. The network’s portfolio investor program runs from $150,000 to $10,000,000, and the standard DSCR program stops at $3,000,000. The super jumbo ladder carries qualified investors past that point. Short-term-rental files stop at $2,000,000.
Your credit, assets, and entity documents are still reviewed. “No income documentation” never means “no underwriting.”
How Does Underwriting Work, Step by Step?
An underwriter works the file in a fixed order. Each step can end the conversation or reshape the loan, so it pays to know them.
1. Purpose of proceeds matters, so expect to document how you will use the cash.
2. Check the property. Eligible collateral is 1-4 units, plus warrantable and non-warrantable condos. Rural property is excluded above $3,000,000, and above that size acreage is capped at ten acres on a non-rural property.
3. Set the rent. The appraiser provides market rent. Where a lease exists, lenders generally credit the lesser of lease rent and market rent.
4. Compute the new payment. The payment is sized on the proposed loan, not the old one.
5. Test coverage. Rent divided by that payment gives the DSCR.
6. Apply the leverage cap. The loan band sets the maximum LTV against appraised value.
7. Review the guarantor and entity. Credit and liquid assets are checked. Entity vesting is welcome, with no layered entities, subject to program terms.
8. Order appraisals. Two appraisals are typical above $2,000,000.
9. Verify reserves. Six months, from funds that are not the proceeds.
10. Check net proceeds. The new loan pays off the old one, costs, and any prepayment charge. What remains is your cash.
The outcome comes from the tightest of three tests: the LTV cap, the coverage ratio on the new payment, and the documented reserves. Whichever binds first sets your loan.
What do the appraisal forms do?
The appraisal does two jobs. It sets value for the LTV test, and it sets market rent for the coverage test. For a single-family home, the rent comes from Form 1007, the rent schedule. For two to four units, Form 1025 captures rent unit by unit. Both form names appear in the Fannie Mae Selling and Servicing Guide forms index. They are agency forms, but DSCR files borrow them for the rent evidence. Agency lending rules do not govern the loan itself.
What Leverage Can You Expect at Each Loan Size?
Leverage drops as the balance grows. These are ceilings through select wholesale programs at coverage of 1.00 or higher, subject to underwriting. They apply to the loan amount, not the purchase price. Work out the loan first, then read the band.
| 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 (on review) | 60% | 60% | — |
| $6M–$10M (on review) | 60% | 60% | — |
Credit matters alongside the band. The top cell in each band needs a certain score: 660 or better to the $1,000,000 level, 700 in the next band, and 720 across $1,500,000 to $3,000,000. A lower score takes a lower leverage cell inside the same band. The program floor is 660, and it moves to 700 above $3,000,000.
Above $3,000,000, the file also requires 0x30x24 housing history, 48-month event seasoning, and citizen or permanent resident status. Cash-out never satisfies reserves there.
Cash-out has its own caps. Proceeds are unlimited at or below 60% LTV, with a $1,500,000 cap above 60%. There is no cash-out above $3,000,000. Borrowers with credit at or below 680 get none above $1,500,000. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Note how the ladder reshapes the strategy. A BRRRR investor (buy, rehab, rent, refinance, repeat) hopes to pull out most of the capital. At this size the ladder returns less, so plan on leaving more equity in the property.
How Does the Coverage Test Re-Run on the New Payment?
A rental that passed at purchase can fail at refinance because the cash-out raises the balance and the payment follows. Rent has not changed, but the denominator has. Coverage drops.
Picture a duplex that cleared 1.30x on the original purchase loan. You refinance to pull out equity, and the larger loan pulls coverage down toward 1.05x. It still clears 1.00, so full leverage stays on the table. Push the cash-out a little higher, though, and the ratio dips below 1.00 and the deal works to a reduced-leverage path.
You have four levers to restore coverage:
- Take less cash. A smaller loan means a smaller payment. This is the cleanest fix.
- Lower the leverage. A lower LTV does the same thing from the other side.
- Use interest-only. The program offers a 120-month interest-only period on 30- and 40-year terms, up to 75%. It is qualified on ITIA at coverage of 0.75 or better.
- Raise documented rent. A new lease or a stronger rent schedule can help, within what the appraiser supports.
Coverage from 0.75 to 0.99 is a real path through select programs to $2,000,000. LTV and terms adjust, subject to underwriting. Short-term rentals are different. They require coverage of 1.00 or higher, loans to $2,000,000, and experienced investors only (twelve months owning income property in the last thirty-six). Income comes from twelve months of operating history on a refinance, counted at 80% of gross. Municipal permission to operate must be documented for the specific property. The rules are set locally and change, so confirm them before relying on projected rent.
How Are Six Months of Reserves Calculated?
The reserve requirement is six months of PITIA on the subject property, or six months of ITIA if the loan is interest-only. First-time investors need twelve months. No extra reserves are required for other financed properties, and a borrower may hold up to 20 financed properties. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The method is simple. Take the full monthly payment on the new loan, including taxes, insurance, and any HOA dues, and multiply by six. On a large balance that cushion is a big dollar figure even though the month count is small. Interest-only loans shrink the reserve, because the payment excludes principal.
The test counts months, so a rise in loan size raises the dollars you must show. Your reserve pool must be sized against the new payment, not the old one.
Practical points on verification:
- Funds must be liquid and documented. Statements show where the money sits.
- Large recent deposits get questions. Be ready to source them.
- Ownership matters. Check whether the account sits in your name, the entity’s name, or both. Programs differ on which accounts count, so confirm early.
- Don’t count the same cash twice. Money earmarked for closing, a down payment elsewhere, or another file cannot also serve as these reserves.
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.
Can Cash-Out Proceeds Count Toward Reserves?
No. In this network, cash-out proceeds never satisfy the reserve requirement on the subject property. Some practitioners say certain lenders elsewhere let proceeds count, and you may hear that claim. It does not describe this program, so do not plan around it. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The logic is straightforward. Reserves prove you can carry the loan without the money the loan creates. If proceeds filled the pool, the test would prove nothing.
Plan three separate buckets:
| Bucket | Purpose | Counts as reserves? |
|---|---|---|
| Cash-out proceeds | Your net payout | No |
| Reserve pool | Six months of PITIA/ITIA | Yes, from your own funds |
| Other cash | Closing needs, other deals | Not double-counted |
This has a real cost. If you intended to use the proceeds for your next purchase, you still need a separate liquid pool sitting idle. That lowers your true take-home, and it belongs in your math from day one.
Where Does the General Rule Break?
Several edge cases change the answer.
Entity vesting. Loans to an LLC are outside the consumer rules, and the guarantor’s credit and assets are still reviewed. Entity vesting is welcome, subject to program eligibility, with no layered entities. A consumer-purpose loan stays consumer-purpose even when a rental secures it, because the purpose of the proceeds controls, not the collateral.
Second liens. If a second mortgage or HELOC sits behind the new loan, lenders generally test coverage on both payments combined. Expect to clear 1.00 after both.
Single-family versus multi-unit rent evidence. The rent schedule form differs by unit count, as above.
Condos. Warrantable condos fit the standard ladder. Non-warrantable condos run to 75% and $1,500,000. Condotels reach 75% on a purchase and 65% on a refinance, to $1,500,000, with $250,000 cash-in-hand.
Rural and acreage. Rural collateral of five acres or less is available to 75%, but 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. Up to twenty acres is possible on loans to $3,000,000.
Prepayment on the old note. A penalty on your existing loan comes out of proceeds, and timing can change the cost.
No-ratio files. No-ratio files are available through select wholesale programs to $2,000,000 with a seven-year clean housing history and 0x30x24, subject to underwriting and at reduced leverage. They are a narrow path, not a default, and short-term-rental income cannot use them.
For the full picture of how these programs fit together, see Lendmire’s complete DSCR loans guide.
Why Do Files Stall at This Size?
Most stalls trace back to a handful of causes.
| Symptom | Likely cause | Fix |
|---|---|---|
| Coverage below 1.00 | Payment rose with cash-out | Take less cash, or add interest-only |
| LTV too high for band | Loan crosses into a lower band | Reduce loan to the next band’s cap |
| Reserves short | Counting proceeds or double-counting cash | Build a separate pool |
| Credit not at top cell | Score below band’s top-leverage need | Accept lower leverage cell |
| Appraisal gap | Value or rent below expectation | Re-size the loan to appraised value |
Another common stall: the investor wants cash-out above $3,000,000. That is simply not available. The practical alternatives are a rate-and-term refinance, a smaller balance, or staging the equity pull across more than one property.
What Does the Investor Decision Look Like?
Run a quick self-check before you apply:
- Compute the likely loan, then read its band, not the purchase price.
- Estimate the new payment and divide rent by it. Look for a coverage of 1.00 or higher.
- Check that your credit supports the top cell for that band.
- Count six months of the new payment in liquid funds that are not the proceeds.
- If the loan exceeds $2,000,000, plan for two appraisals.
- Confirm the cash-out cap for your LTV. Over 60%, the cap is $1,500,000.
The best program for your situation depends on property type, credit, leverage need, and documentation. Because Lendmire is a broker that shops multiple wholesale lenders, it matches the scenario to the program rather than forcing one fit. Related reading: Lendmire’s piece on super jumbo cash-out requirements with twelve months of reserves covers the heavier reserve case.
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. Reach the team at 828-256-2183.
Frequently Asked Questions
Do cash-out proceeds count toward reserves?
No. In this network the six months must come from your own liquid funds, separate from the proceeds. Above $3,000,000 cash-out is not offered at all, and the same no-proceeds rule applies there. Everything is subject to underwriting.
Is the requirement six months of PITIA or ITIA?
It depends on the loan structure. A standard amortizing loan is tested on PITIA. An interest-only loan is qualified on ITIA, so the reserve is six months of that smaller payment.
Do reserves rise with the loan balance?
The month count stays at six, but the dollar amount grows because the payment grows. A larger loan means a larger cushion to document, even with no change in the rule.
Do I need tax returns?
The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your credit, assets, and entity documents are still reviewed, so the file is not paperless.
Does each additional property add reserves?
No extra reserves are required for other financed properties in this program, which allows up to 20 financed properties. Reserves are tested on the subject property. Each new refinance still needs its own documented pool.
For how equity extraction works on an investment property, see 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 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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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. Orrick Infobytes: FHFA Announces 2026 Increases to Conforming Loan Limits
2. Federal Register: Ability-to-Repay and Qualified Mortgage Standards Under Regulation Z
3. Fannie Mae Selling and Servicing Guide Forms
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: Can You Get Approved for a Super Jumbo DSCR Cash-Out Refinance Without Personal Income? · Super Jumbo DSCR Cash-Out Refinance Lenders to Buy Out a Business Partner on the Property
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.