Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The Quick Read: On a purchase, reserves are the liquid assets you still hold after the down payment and closing costs are paid, and across the wholesale network they typically step from 3 months of the property’s full payment on loans up to $500,000 to 9 months above $1,500,000, while a cash-out adds one wrinkle: at the top tiers, the loan proceeds cannot count toward reserves.
- Reserve months on most files: 3 up to $500,000, 6 up to $1,500,000, 9 above that, through select wholesale programs, subject to full underwriting.
- Each additional financed property adds 2 months, capped at 12 months total. First-time investors typically carry 12 months.
- Above $3,500,000 on a primary residence, and above $3,000,000 on a second home or investment property, cash-out proceeds cannot satisfy reserves.
- Above $4,000,000, every file is reviewed case by case before submission, including the reserve count.
- Reserves are tested on your personal verified statements. The LLC’s balance is not the test.
Here is the honest answer on who each side is for. A purchase suits the buyer who already holds a deep pile of liquid assets and wants to see exactly what is needed on day one. A cash-out suits the owner who is sitting on equity and wants to pull some out. That owner must still prove a cushion that exists apart from the loan once the property gets large. Same reserve ladder, different question: on a purchase you ask whether your savings cover the deal. On a cash-out you ask whether your savings cover the cushion without the check you just received.
Side-by-Side
The table below shows how the two transaction types compare on the points that move a high-balance file. Every figure is a typical ceiling or requirement through select wholesale programs, subject to full underwriting. It is not a commitment to lend.
| Factor | Purchase | Cash-Out |
|---|---|---|
| Review basis | Deposits, assets, or P&L; property reviewed | Same paths, plus an equity and LTV test |
| Documentation | 12 or 24 months of bank statements | Same statements |
| Reserve months | 3 to $500K, 6 to $1.5M, 9 above | Same ladder |
| Added per other financed property | 2 months each, 12-month cap | Same |
| First-time investor | 12 months | 12 months |
| Where reserves come from | Your funds left after down payment and costs | Your funds; proceeds only below the overlay line |
| Proceeds count toward reserves? | Not applicable | Program by program; no above $3.5M primary, $3M other |
| Entity vesting | Reserves tested on the guarantor | Same |
| Above $4M | Reviewed case by case | Reviewed case by case |
Two rows deserve a second look. The reserve ladder is the same on both sides. The proceeds row is where they split.
Key Terms Defined
Reserves are liquid assets you still own after the loan closes. They are the lender’s cushion against a vacant month or a surprise repair.
PITIA is the property’s full monthly obligation: principal, interest, taxes, insurance, and association dues. Reserve months are counted against this number for the subject property.
Seasoning is the time funds must sit in your account before they count. Large fresh deposits with no paper trail create friction.
Net proceeds are the new loan minus the payoff, closing costs, prepaids, and any prepayment penalty. That is what lands in your hands on a cash-out.
Guarantor is the individual who stands behind the loan, even when an LLC holds title. Reserves are verified on the guarantor’s own statements.
How the Months Actually Work
Reserve months are counted against the subject property’s full payment, not against your income. Six months on a large file means six times that property’s monthly obligation, held in verified liquid accounts. The cushion is separate from your down payment and closing costs. Cash you spend to close cannot count a second time.
Other financed properties raise the bar. Each one adds 2 months, up to a 12-month ceiling. A first-time investor starts at 12 months, so the add-on never applies. The practical effect: an experienced owner with several loans can hit the ceiling without ever buying a bigger property.
Not every dollar counts at face value. Retirement accounts count at 70% of value, or 80% at age 59.5 and older. Business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count. The founder with a strong business account and a thin personal account often finds the cushion is smaller than they thought.
Expect the same kind of limit at the top of the agency world. Fannie Mae’s guidance on unacceptable reserve sources excludes non-vested funds and personal unsecured loans. That is a contrast, not a rule for these programs. Wholesale programs set their own lists, and the list above is the one that applies here.
Two Programs, One Ladder (With a Catch Above $4 Million)
Two wholesale programs cover this space. The portfolio program is a non-QM program that carries files up to $6,000,000 and accepts 12 or 24 months of statements. The bank program is a bank portfolio jumbo product that takes twelve-month-statement files up to $30,000,000 on its own size ladder. The portfolio program’s credit floor is 660, and the bank program’s is 680. Both move to 700 above the super-jumbo line.
On the reserve ladder, treat 3, 6, and 9 months as the working map for files up to $4,000,000. Above that, the bank program’s ladder begins and overlaps the portfolio program to $6,000,000. Every file in that range gets reviewed case by case before submission. That includes the reserve count. Do not plan a $5,000,000 purchase around the 9-month figure as if it were fixed. Treat it as the starting point of a conversation.
Cash-out rules differ more by program than reserve months do. On the portfolio program, proceeds are unlimited at or below 60% LTV. Above 60%, cash in hand is capped at $1,500,000. The bank program publishes no cash-in-hand cap, though every loan above $4,000,000 is still reviewed case by case. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
When a Purchase Is the Better Fit
A purchase is the cleaner path when your liquidity is already built and you want certainty. The rule is simple: reserves must exist independent of the loan. You see the number up front. Nothing depends on how the loan proceeds are treated, because there are none.
It also fits the buyer who wants the highest leverage. On a primary residence, the ladder’s purchase column runs higher than its cash-out column at every size. For example, a purchase of a primary residence between $300,000 and $1,000,000 can reach 90%. A cash-out at that size tops out at 80%. At the same size band on an investment property, a purchase can reach 85% and a cash-out 75%. Each figure is a ceiling through select wholesale programs, subject to full underwriting, and ceilings step down as the loan grows. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Purchases also suit buyers whose money sits in a business. Business account balances do not count as reserves, so the cushion has to sit in your personal verified accounts. Move the funds early and keep the paper trail.
The catch is that a purchase pulls on three pools at once: the down payment, closing costs, and reserves. Add a rehab budget and the total gets large. Planning only for the reserve line can leave a purchase file short.
Reserves on an investment purchase can usually sit alongside an LLC holding title, subject to lender program eligibility. The test still runs through you personally.
When a Cash-Out Is the Better Fit
Cash-out is the better fit when the equity is already trapped in a property you own and you want it working elsewhere. Below the overlay lines, some select lenders in the network let net proceeds count toward reserves. Some add a cap or documentation conditions. It varies by program and size, and it is never safe to assume.
Above those lines, the answer is firm. On a primary residence above $3,500,000, and on a second home or investment property above $3,000,000, cash-out proceeds cannot satisfy reserves. Those same overlay tiers bring a 700 credit floor, a 0x30x24 housing history, and 48-month seasoning on any credit event. The reserves must already exist, sourced separately from the cash you receive.
That separation matters if you plan to redeploy the money. Net proceeds you spend on the next acquisition or a rehab cannot also serve as reserves. They are two pools, checked separately. An investor who counts the same dollar twice gets a surprise at underwriting.
Leverage also steps down on this side. At the $300,000 to $1,000,000 band, a cash-out on a primary residence tops out at 80%, and on an investment property at 75%. Cash-out above 60% LTV on the portfolio program carries the $1,500,000 cash-in-hand cap. If you want the equity but already hold deep liquid savings, the cash-out can work well. If your plan is to use the proceeds as your cushion on a large file, it often does not.
There is also an alternative path when the loan size or documentation fights you. Asset-based qualification works from your liquid assets instead of deposits. Asset allowance divides liquid assets by 36, 60, or 84 months. Assets-only needs liquidity equal to the loan plus costs. Those paths consume the same liquid pool that reserves draw on, which makes the planning harder, not easier. For the interest-only side of this decision, Lendmire’s piece on how interest-only resets compare on a bank statement purchase versus a cash-out covers the structure.
Run the Numbers on One Borrower
These are modeled assumptions, not a quote. Picture an experienced investor buying a $2,000,000 investment property with two other financed properties. The base reserve is 9 months, because the loan is above $1,500,000. Two other properties add 4 months, which makes 13. The 12-month cap applies, so the requirement lands at 12 months of the subject property’s full payment.
Now run it as a cash-out on that same property. A $2,000,000 investment property sits below the $3,000,000 overlay line. So proceeds may count toward reserves on some select programs, though not on all. Get it confirmed in writing before you plan the next purchase around it. Now move the property to $3,500,000. The proceeds cannot count at all. The same 12-month requirement now has to come from funds you already hold.
Experience from the broker side: files at this size rarely stall on the income math. They stall when the reserve story is built on money that is spoken for, in the wrong name, or sitting in an account that does not count. A clean statement package and a plain list of which account covers what tends to prevent the surprise.
The Business-Purpose Note
DSCR and investment 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. That is part of why reserve rules vary between programs. No government body sets them. They are program-level risk controls.
The Agency Contrast, Briefly
Many buyers assume the conventional rulebook applies here. It does not. Fannie Mae’s Selling Guide reduces required reserves by the cash back received on a refinance. It also sets no minimum reserve for a one-unit principal-residence transaction. Those rules do not bind these programs. A high-balance investor file is underwritten to the program’s own ladder, which is why a cash-out can look easier on paper elsewhere and tighter here.
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.
The Balanced Verdict
Pick the purchase if you want one clear number and already hold the liquidity. Pick the cash-out if the equity is real and your savings cover the cushion without it. Reserve months are the same on both sides, so the decision turns on one question: does the file need the cash-out proceeds to count? Below the overlay lines it sometimes can. Above them, never plan on it.
For how these programs fit into the bigger picture, see the complete DSCR loans guide. Consumer lending for primary and second homes is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA.
Frequently Asked Questions
Can cash-out proceeds count as reserves on a super jumbo?
Sometimes, but only below the overlay lines. Some select lenders in the network let net proceeds count on smaller files, with a cap or documentation conditions. Above $3,500,000 on a primary residence and $3,000,000 on a second home or investment property, they cannot. Get the answer in writing before you build a plan around it.
Are reserves separate from my down payment?
Yes. Money used for the down payment or closing costs cannot also count as reserves. Reserves are what you still hold after everything is paid. On a purchase with a rehab, plan for all three pools together.
Do the LLC’s funds count toward reserves?
Generally no. Reserves are tested on the guarantor’s own verified statements, and business funds do not count. If the cushion lives in a company account, move it to your personal account early and keep the paper trail.
How many reserve months should I expect?
Typically 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above that. Each additional financed property adds 2 months, capped at 12. Above $4,000,000, the count is reviewed case by case.
Do retirement accounts count?
Yes, at a discount. Retirement accounts count at 70% of value, or 80% if you are 59.5 or older. Gifts, unvested stock, cryptocurrency, and most trusts do not count. Every figure is subject to full underwriting.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
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References
1. Fannie Mae Selling Guide, B3-4.1-01 Minimum Reserve Requirements
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: Super Jumbo Bank Statement LTV on Purchase vs Cash-Out · Super Jumbo Cash-Out LTV and Seasoning Rules for Founders · How to Cash-Out Refinance a Super Jumbo Home on Business Deposits
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.