Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The Quick Read: Reserves step up with the loan amount: 3 months of the full housing payment through $500,000, 6 months through $1,500,000 and 9 months above that, and the months must sit in personal liquid accounts rather than inside the practice. These requirements apply through select wholesale programs and are subject to full underwriting. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
- Reserves are what remains after the down payment and closing costs. Net worth does not count, and neither does practice equity.
- Each additional financed property adds 2 months, up to a 12-month maximum. First-time investors are typically asked for 12 months.
- Above $4,000,000, every file is reviewed case by case before submission, so the month count is confirmed individually.
- Cash-out proceeds cannot satisfy reserves on super jumbo files, and the treatment of other funds varies by scenario.
- Practice cash is the usual trap. Move it early, season it, and plan around what actually counts.
What a Reserve Month Actually Measures
A reserve month is one month of the full housing payment: principal, interest, taxes, insurance and association dues. It is not a flat dollar figure. The same “six months” rule asks for very different cash on a small payment than on a large one.
Reserves also come after cash to close. Down payment, closing costs and prepaids come out first. What is left is what the lender counts.
Corporate Finance Institute puts typical jumbo reserves at 6 to 12 months of PITI and says lenders look for them in bank statements. That is a general jumbo range. Super jumbo files on Lendmire’s wholesale network use a size-based scale, covered next.
No regulator sets these numbers. Reserves are investor overlays, so they differ from program to program. Across the network, most programs scale the month count with the loan amount and tighten it further at the top.
Key Terms Defined
Reserves: liquid assets left over after the down payment and closing costs, measured in months of the full housing payment.
PITIA: principal, interest, taxes, insurance and association dues, the full monthly housing obligation that one reserve month is built on.
Seasoning: the period funds sit in an account so the lender can trace where they came from.
Cash in hand: the money a borrower receives at closing on a cash-out loan, which some programs cap above a certain leverage.
Eligible deposits: the deposits that count toward bank-statement income once non-income items are removed, before the expense ratio is applied.
The Reserve Staircase by Loan Size
Reserves rise in three steps, and a fourth rule adds to them for borrowers with other loans. These figures are typical ranges through select wholesale programs, subject to full underwriting.
| Loan size | Base reserves | Add-ons |
|---|---|---|
| Up to $500,000 | 3 months | +2 months per other financed property |
| $500,001 to $1,500,000 | 6 months | +2 months per other financed property |
| Above $1,500,000 | 9 months | +2 months per other financed property |
| Any size, first-time investor | 12 months | Maximum stays at 12 |
The add-on tops out at a 12-month maximum. A practice owner with two or three rentals already on the books can hit that cap with a mid-sized loan.
Loan size also drives leverage, and leverage drives how much cash goes to closing before reserves are counted. On a primary residence purchase, the ladder typically runs about 90% to $1,000,000, 85% to $2,000,000 and 80% to $3,000,000. Then 75% applies to $4,000,000 at the top credit tier. Second homes and investment property run about five points lower at every size.
Above $4,000,000, a primary residence purchase steps to 65% to $5,000,000, and that figure is reviewed case by case before submission. Credit floors rise too. The portfolio non-QM bank-statement program typically wants 660 and the bank portfolio program 680. Above the super jumbo line the floor is 700.
For the deeper tier-by-tier version, see Lendmire’s piece How to Meet Reserves by Loan Size on a Super Jumbo Purchase.
What Counts as a Reserve and What Doesn’t
Lenders count spendable money. They do not count wealth you would have to sell something to reach.
| Asset | Typical treatment | Practice-owner note |
|---|---|---|
| Personal checking, savings, money market | Counts in full | The cleanest form of reserves |
| Brokerage accounts | Generally counts, subject to program review | Document with statements |
| Retirement accounts | 70% (80% at 59.5 and older) | Haircut applies to the balance |
| Business account balances | Does not count on the asset paths | Move to personal early, with documentation |
| Gifts, unvested stock, crypto | Never count on the asset paths | Often restricted on income paths too |
| Practice or real estate equity | Does not count | Illiquid until sold |
The network figure of 70%, rising to 80% at 59.5, sits in the same range. A retirement account is usable, but it is worth less than its balance.
Statements are typically two to three months per account. Large deposits need a paper trail. A transfer that arrives without an explanation is a common reason a reserve pool shrinks on review.
Why a Practice Owner Is a Different Borrower
A practice can be worth a great deal and still hold little personal cash. A dentist, physician or veterinarian may own a profitable practice, draw a modest salary and keep the rest in the business. Practice liquidity is not personal liquidity, and reserve rules care only about the personal kind.
The income side is friendlier. On the bank-statement path, qualifying income is eligible deposits divided by the statement months after an expense ratio. Transfers from the borrower’s own business into a personal account count at 100%. Business statements need at least 25% ownership. MGIC’s self-employed borrower workbook uses the same 25% line to define a self-employed borrower and shows how business cash flow is analyzed.
The reserve side is stricter. Agency rules offer a contrast. The Fannie Mae Selling Guide requires a business cash flow analysis when business assets fund a down payment, closing costs or reserves. That analysis must show the withdrawal will not hurt the business. Agency loans are a different product, so that rule does not govern super jumbo files. It does show how seriously underwriters treat practice money.
On the asset-based paths in the network, business funds never count. On the income paths, the safe plan is to count only what already sits in a personal account. Moving practice money to personal accounts is a decision for a CPA, and it should happen well before application so the transfer is seasoned. Tax treatment varies; consult a qualified tax professional.
One more point on the income path. Reserves and income are separate tests, and one file can pass the income test and miss the reserve test. Owners often discover this late.
Cash-Out and the Two-Pool Rule
Think of the file as holding two pools of money. Pool one funds closing, a buyout or the down payment. Pool two is held back as reserves. The same dollars cannot sit in both.
On a cash-out refinance, the temptation is to use the proceeds as reserves. On super jumbo files, that does not work. The overlay says cash-out proceeds cannot satisfy reserves. It applies above $3,500,000 on a primary residence and above $3,000,000 on a second home or investment property. Below those lines, treatment is program-specific and should be confirmed before the file is built around it.
Cash-out has its own limits. On the portfolio program, proceeds are unlimited at or below 60% LTV and capped at $1,500,000 of cash in hand above 60%. The bank portfolio program publishes no such cap. Lendmire’s piece on whether a practice owner can get a super jumbo cash-out without bank statements covers the income side of that transaction. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Three Worked Loan Sizes
These examples use months and percentages only. The month count is the plan. Each is typical through select wholesale programs, subject to full underwriting.
A $450,000 loan on a primary residence. Base reserves are 3 months. A practice owner with no other financed property needs 3 months in personal liquid accounts. Leverage on a purchase can run to about 90% on a primary residence at this size. A small practice-cash transfer, seasoned for a few statements, usually solves the file.
A $1,200,000 loan on a primary residence purchase. Base reserves are 6 months, and leverage typically tops out near 85% on a primary residence purchase. Now add two financed rentals the owner already carries. That is 4 more months, so the file needs 10. Retirement accounts help, but only at 70% of the balance, so the practical need is larger than the headline.
A $2,500,000 loan on a primary residence. Base reserves are 9 months, with leverage of about 80% on a primary residence purchase. Add three other financed properties and the math reaches 15 months. The 12-month maximum caps it. A first-time investor on an investment property hits 12 months by itself. The owner’s real constraint is not the count. It is whether 12 months of the full payment exists as personal liquidity after cash to close.
At $4,500,000 or above, the numbers above are the starting point. Every figure at that size is reviewed case by case before submission, and the lender may ask for more.
Where the General Rule Breaks
Illiquid wealth. A practice, a building and a private company are valuable. None counts as reserves unless sold.
Business funds. They never count on the asset-based paths. On income paths, they are safest when moved to a personal account and seasoned.
Retirement accounts. The haircut applies, and the borrower’s age changes it. At 59.5 the credit rises from 70% to 80%.
Gifts, trusts and crypto. None counts on the asset paths. Only a revocable living trust is acceptable. Treat anything else as excluded.
Double counting. If liquid assets are used as an income source on the asset-allowance path, treat those same dollars carefully. Confirm with the file reviewer how reserves and asset-based income interact before counting both.
Asset-based alternatives. The asset-allowance path divides liquid assets by 36, 60 or 84 months to create income, on primary and second homes only. Assets-only needs U.S. liquid assets equal to the loan plus closing costs, with no DTI test. These are for owners whose traditional personal-income documentation understates income and whose bank deposits are uneven. They do not remove reserves. Eligibility is always reviewed on the whole file.
Higher credit. Strong credit and lower leverage can ease a file on some programs. They rarely remove the reserve requirement. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
For investors who would rather qualify on property rent than deposits, Lendmire’s complete DSCR loans guide covers that path. It runs on a different test, and the reserve rules above do not carry over unchanged.
A 90-60-30 Day Plan
90 days out. Pull the last 12 or 24 months of statements. Decide whether personal or business statements carry the income. Meet with your CPA about what practice cash can legitimately move.
60 days out. Make any transfers. Keep each one traceable, and avoid large round-number deposits with no story. Seasoning needs time to pass.
30 days out. Freeze movement between accounts. List every financed property and count the add-on months. Total the personal liquid assets, apply the retirement haircut, and subtract the cash to close. If the result is short, the options are a smaller loan, a larger down payment held in pool one, or more time to build liquidity.
Why the Published Numbers Don’t Match
A reader who searches this topic finds numbers that disagree. The reason is simple. Some pages describe ordinary jumbo loans, some describe a single lender’s overlays, and some describe employed physicians in low-reserve programs. None of those is a super jumbo bank-statement file for a practice owner.
The network’s scale for this product is 3, 6 and 9 months by size, plus the add-ons. A broker sees many lenders’ guidelines at once, so the practical advice is to size the loan to the reserves you can document. Programs change, and every file is underwritten individually.
Frequently Asked Questions
Do the funds in my practice’s operating account count as reserves?
Usually not. On the asset-based paths, business funds never count. On income paths, the safer plan is to rely only on balances already in a personal account. If you want to use practice cash, discuss the move with a CPA and make it early enough to season.
How many months of reserves do I need on a $2,000,000 loan?
Typically 9 months of the full housing payment through select wholesale programs, plus 2 months for each additional financed property up to a 12-month maximum. First-time investors are typically asked for 12. The count is confirmed on individual underwriting.
Can I use cash-out proceeds from the same loan as reserves?
On super jumbo files, no. Cash-out proceeds cannot satisfy reserves above $3,500,000 on a primary residence or above $3,000,000 on a second home or investment property. Below those lines, treatment varies by program.
Do retirement accounts count at full value?
No. Typically they count at 70%, rising to 80% at 59.5. A balance that looks like 12 months on paper may be less after the haircut.
What changes above $4,000,000?
Every file at that size is reviewed case by case before submission. The leverage on a primary residence purchase is 65% to $5,000,000, on review, and reserve months are confirmed individually. Plan for a larger cushion than the table shows.
Next Step
Consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Nothing here is a commitment to lend. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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References
1. Corporate Finance Institute – Jumbo Loan
2. MGIC Self-Employed Borrower Workbook
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get a Super Jumbo Loan With No Current Income · How to Use 40-Year Amortization on a Super Jumbo Bank Statement Loan · How to Use Cash After a Sale on a Super Jumbo Bank Statement Loan
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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.