How many months of reserves do I need before applying?
How many months of reserves should I have ready before I apply for a DSCR loan?
None of the 37 lenders in this directory publish a reserve figure, and that isn't an oversight — reserve requirements are set file by file, so the honest answer is to ask before applying, not to look one up here.
- A direct reserve-requirement question to the lender, before applying Reserve requirements are set lender by lender and aren't a field a directory of published criteria can answer in advance.
- Assuming a single standard number applies everywhere There's no universal reserve requirement across DSCR lenders — treating one lender's number as the rule risks preparing for the wrong figure entirely.
Lenders in the directory
No lender here publishes a rule for this
This is an underwriting judgment, not a published threshold. None of the 37 lenders in the directory states a policy on it, so there is no honest way to build a shortlist — and a list computed only from which products a lender writes would tell you nothing you could act on.
What matters here is how the file is presented rather than which lender receives it. The sections below cover that. When you are ready to approach lenders, the directory shows what each one does publish, with the date it was verified.
What reserves are, generally
Liquid funds a borrower can verify sitting in an account, beyond what's needed to close, expressed as a number of months of the property's payment — or sometimes the borrower's full portfolio of payments. The point is showing the loan can be serviced through a period of vacancy or an unexpected expense.
Why this varies so much lender to lender
The required amount typically moves with the borrower's credit profile, the DSCR ratio itself, the number of financed properties already owned, and the specific loan program — which is exactly why no single figure describes every DSCR lender in this directory.
What to actually ask, and when
Get the specific reserve requirement, in months and in the dollar terms it applies to — subject property only, or the full portfolio — before submitting a full application, not after a denial reveals it. See denied for insufficient reserves for what happens if that step gets skipped.
What typically counts and what typically doesn't
Liquid and seasoned funds in checking, savings, and brokerage accounts are the most commonly accepted. Retirement accounts are sometimes counted at a reduced value. Large, unsourced recent deposits are the most common reason a reserve balance gets discounted during review.
What to have ready
- A written reserve requirement from each lender being considered, before applying
- A full list of liquid account balances with source and seasoning documented
- Clarity on whether the requirement applies to this property alone or the full portfolio
- A plan for any gap identified before submission, not after
Questions
Is there a typical reserve requirement I should plan around?
Does a higher DSCR ratio reduce the reserve requirement?
Should I ask about reserves before or after picking a lender?
Terms used on this page
- Asset-Based Lending — Asset-based lending underwrites primarily on the value and income of the collateral rather than the borrower’s personal income. In real estate this covers hard money, bridge and DSCR loans.
- Debt Service Coverage Ratio (DSCR) — DSCR is a property’s gross monthly rent divided by its total monthly mortgage payment. A DSCR of 1.00 means the rent exactly covers the payment; 1.25 means rent exceeds the payment by 25%.