WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES – Tabell

LOAN PURCHASE PHILOSOPHY
Deephaven Mortgage LLC (hereafter referred to as Deephaven or Deephaven Mortgage) evaluates many aspects of the loan
including characteristics including credit history, asset position, and the property being used for collateral. Deephaven's DSCR 5-9
Unit Guidelines establish the criteria under which a loan will be eligible for origination by Deephaven.
Deephaven Mortgage has a no-tolerance policy as it relates to fraud. Brokers should follow their own established fraud and identity
procedures on every loan in an effort to prevent and detect fraud. Loans containing fraudulent documentation or information will
immediately be declined and forwarded for further review. If there is any determination of Broker involvement, the Broker will be
made inactive, and the appropriate agencies notified. Deephaven Mortgage will also pursue borrower fraud to the fullest extent of
the law.
FAIR LENDING STATEMENT
Deephaven Mortgage operates in accordance with the provisions of the Fair Housing Act and Equal Credit Opportunity Act. The Fair
Housing Act makes it unlawful to discriminate in housing-related activities against any person because of race, color, religion,
national origin, sex, handicap, or familial status. The Equal Credit Opportunity Act prohibits discrimination with respect to any aspect
of a credit transaction on the basis of sex, race, color, religion, national origin, marital status, age (provided the borrower has the
capacity to enter into a binding contract), receipt of public assistance, or because the borrower has in good faith exercised any right
under the Consumer Credit Protection Act. Deephaven Mortgage fully supports the letter and spirit of both of these laws and will
not condone discrimination in any mortgage transaction.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

GENERAL PROGRAM INFORMATION

PROGRAM

The DSCR 5-9 Unit Program is designed for investment or non-owner-occupied loans that are
designated for business purposes only. See the Deephaven Wholesale Underwriting Guidelines
for any areas not addressed in these guidelines.
OCCUPANCY Business Purpose Investment Properties only
PROPERTY TYPES 5-9 Units Residential

LOAN PRODUCTS

• 30-year Fixed
• 30-year Fixed Interest-Only
• 5/6 ARM
• 5/6 ARM Interest-Only

MINIMUM
LOAN AMOUNT

$350,000

MAXIMUM
LOAN AMOUNT

$2,500,000
MAXIMUM CASH-OUT $500,000
PREPAYMENT
PENALTIES

Standard step-down prepayment penalty model

ELIGIBLE BORROWERS

• U.S. Citizen
• Permanent Resident Aliens
• Entity Borrower (U.S. domestic LLC) with Personal Guarantor

INELIGIBLE STATES HI (lava zones 1 & 2)

REQUIRED FORMS

• Business Purpose & Occupancy Affidavit (signed by Borrowers, Borrowing Entities and
Guarantors)
• Deephaven Guaranty Form (if applicable)
• First priority mortgage/deed of trust for each property
• First priority blanket assignment and subordination of leases and rents
• Assignment and subordination of property management agreement (if applicable)

AGE OF DOCUMENTATION All documents must be dated within 90 days of closing.
COMPLIANCE Compliance with all applicable federal and state regulations.

TRANSACTIONS

PURCHASE The lesser of purchase price or appraised value of subject property is used to calculate LTV.

REFINANCE LOAN-TO-VALUE

• Property acquired ˃ 6 months from note date: appraised value is used to determine
LTV.
• Property acquired < 6 months from note date: lesser of current appraised value or
previous purchase price plus documented improvements use for LTV.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

GENERAL LEASE
REQUIREMENTS

• An executed lease with 3 months remaining required for all units in the subject
property for refinance transactions.
• Monthly lease payments must be consistent with market rents.
• Copies of any existing leases must be provided for all transactions.
• The property cannot be occupied by a Guarantor, any member of the Borrowing
Entity, or any family member.
• Each leased property must be used for residential purposes.
• No individual room leases, Single Room Occupancy (SRO), or boarder leases
permitted.
• Leases must be in U.S. dollars.
• No commercial use allowed.
• No vacation or seasonal rentals allowed.
• No purchase or sale-leaseback options are permitted.
• Leasehold properties are not permitted.
• No leases with a term of > 3 years.
• Lease must have an initial term of at least 12 months.
• Tenant must not have requested forbearance or missed rent any payments by 30
days or more in the last 12 months.

LEASED UNITS

 Leased properties are defined as those with a currently active lease with a minimum
initial term of 12 months, between unrelated parties.
 Month-to-month leases are permitted if rolled 12 months from initial lease term and
lease agreement includes month-to-month clause.
 Month-to-month leases permitted with a prior active lease of 12 months and proof of
rent collection for at least 3 consecutive months prior to note date.
 Proof of receipt of security deposit for new lease required.

UNLEASED UNITS

 Vacant units use 75% of market rents for DSCR calculation.
 Properties with no proof of rent collections or receipt of security deposit are
considered as unleased.
 For refinance transaction, no more than 2 vacant units allowed. Any vacant unit must
provide evidence of a recent lease within the last two months.
 For purchase transaction, no more than 2 vacant units allowed. If there is an existing
lease on the property that is being transferred to the borrower, it must be verified
that the lease does not contain any provision impacting the lender’s first lien position
of the property.

RATE/TERM REFINANCE Cash back may not exceed the lesser of 2% of the new mortgage balance or $2,000.
CASH-OUT REFINANCE Cash-out proceeds for business purposes only. Signed Business Purpose Affidavit is required.

INELIGIBLE TRANSACTIONS

• Non-arm’s length transactions
• Land contract or contract for deed
• Lease with purchase option
• Flip transactions (seller in title < 180 days)

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

6
BORROWERS

FIRST-TIME INVESTORS

First-Time Investors are not allowed. Borrower must have 12-month history of investment
property ownership in the most recent 12 months.

ENTITY BORROWER
REQUIREMENTS

 Entity ownership is limited to a maximum of 4 owners of the Borrowing Entity with
25% or greater ownership interest in Borrowing Entity.
 Business purpose and activities of the Borrowing Entity are limited to ownership and
management of real estate.
 A Personal Guarantor is required and must be beneficial owner.
 Each member of the Borrowing Entity providing a personal guaranty (each a “Personal
Guarantor”) must complete a loan application or similar credit application signed in
their individual capacity.
 Borrowing Entities and Guarantors must also receive notice of the loan and its terms
prior to closing.
 If a standard FNMA Form 1003 is used, the section labeled, “Title to the Property Will
be Held in What Name(s),” should include the Borrowing Entity name.
 U.S. Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens are
eligible to act as Personal Guarantors.
 In addition, members of the LLC may also not be a trust.
See APPENDIX for complete Entity documentation requirements.

PROPERTY MANAGEMENT
EXPERIENCE

Borrowers that intend to self-manage the property must meet at least one of the following
requirements:
 Have two years of experience managing income producing properties.
 Have a certification or proof of equivalent coursework in real estate property
management.
 New managers (defined as having less than 2 years property management
experience) are permitted with a 700 minimum FICO.

CUSTOMER IDENTIFICATION
(CIP)

Verification of name, date of birth, address, identification number of all Borrowers and
Guarantors is required.

FRAUD REPORT Third-party fraud detection report is required for all Borrowers, Guarantors, and all members

of each Borrowing Entity.

VESTING Ownership must be fee simple and vesting in the name of Borrower or Borrowing Entity only.
MULTIPLE
FINANCED PROPERTIES

Deephaven exposure may not exceed $10M aggregate with a maximum of 10 loans for each
Borrower or Borrowing Entity.

CREDIT ANALYSIS

CREDIT REPORT • Credit report and SSN required for every Borrower or Personal Guarantor.
• Qualifying score is the lowest mid-score for any Borrower or Personal Guarantor.

TRADELINES

• 3 tradelines reporting for 12+ months, 2 tradelines reporting for 24+ months, or 1
tradeline reporting for 36+ months. All require activity in the last 12 months.
• All Borrowers and Guarantors must meet minimum tradeline requirements.
• Limited Tradelines not allowed.

MORTGAGE HISTORY A 24-month housing history is required on 5-9 Unit transactions.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

EVIDENCE OF
PRIMARY RESIDENCE

 All Borrowers and Guarantors must maintain a primary residence. Evidence of
primary occupancy is required.
 Borrowers living rent free may be considered on a case-by-case basis with compelling
evidence of continued occupancy.

COLLECTIONS
AND CHARGE-OFFS

The following may remain open:
 Collections/charge-offs < 24 mos old with maximum cumulative balance of $2,000.
 Collections/charge-offs ≥ 24 mos old with maximum of $2,500 per occurrence.
 Collections/charge-offs that have passed beyond statute of limitations for that state.
 All medical collections.
 Collection/charge-off balances exceeding amounts listed above must be paid in full.

JUDGMENTS
AND TAX LIENS

All judgments or liens affecting title must be paid to insure lien position without exception.
Court-ordered judgments may remain open when one of the following options is met:
 The amount is the lessor of $5,000 per occurrence or 2% of the loan amount; or
 Judgments or lien has passed beyond the statute of limitations for that state; or
 The borrower or guarantor is currently in a repayment agreement with the creditor.
Outstanding state and federal tax liens or delinquent obligations may remain open on
purchase transactions. All of the following requirements must be met:
 A copy of the repayment agreement is obtained; and
 A minimum of 3 months has elapsed on the plan and evidence of timely payments for
the most recent 3 months is provided; and
 The title company must provide written confirmation confirming (a) the title company
is aware of the outstanding tax lien, and (b) there is no impact to first lien position.

BANKRUPTCY AND
FORECLOSURE SEASONING

84 months

RATIOS AND QUALIFYING

MINIMUM DSCR 1.15

DSCR CALCULATION

 DSCR = Gross Rental Income / [P]ITIA or ITIA (interest-only loans).
 Use the lower of (a) executed lease agreement or (b) market rents.
 If unit is unleased, use 75% of market rents.
 Short-term rental income not allowed.

ADJUSTABLE-RATE The greater of the note rate or the fully indexed rate is used to determine the qualifying PITIA.

INTEREST-ONLY

 Interest-only loans qualify using the interest-only payment, including escrows, to
determine qualifying DSCR.
 5% LTV reduction required.
ASSET ANALYSIS
ASSETS Assets must be seasoned for 60 days or sourced.
RESERVES • 6 months PITIA.

• Net proceeds from transaction may not be used to meet minimum required reserves.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

GIFT FUNDS Not allowed.
INTERESTED PARTY
CONTRIBUTIONS Interested party contributions may not exceed 3%.
SUBORDINATE FINANCING Not allowed.

PROPERTY

APPRAISAL
REQUIREMENTS

 Full Interior Appraisal (FHLMC 71A, FHLMC 71B – max $750,000 loan amount, FNMA
1050, or similar short form used to appraise 5+ residential properties)
 Commercial BPO (2nd appraisal required if variance of ≥ 10% in value)

APPRAISAL REPORT
ATTACHMENTS

Attachments required for appraisal reports:
 Purchase Agreement
 Map, Plot, or Survey
 CAM (Common Area Maintenance Expense)
 Legal Description
 Deeds and Tax Certificate
 Leases
 Rent Roll
 Site Plans
 Aerial Photo
 Sketch or Floor Plan
 Appraiser Qualifications
 Operating Income and Expense Statements
 Environmental Assessment

TRANSFERRED
APPRAISALS

Transferred appraisals are allowed. The transfer policy may be found at Deephaven Wholesale
Tools and Resources.

AGE OF APPRAISALS Valid for 120 days and are not eligible for appraisal updates.
DECLINING MARKET 5% LTV reduction required if appraisal indicates property is located within a declining market.

DEFERRED MAINTENANCE

 Properties in C5 or C6 condition are not acceptable.
 Deferred maintenance allowed if not structural in nature.
 Deferred items may be left as-is if the aggregate cost does not exceed $2,000 or
impact the safety or habitability of the property.
ACREAGE Maximum 2 acres. No rural properties permitted.

RENT CONTROL

Properties located in states with rent control regulations are allowed when both of the
following requirements have been met:
 Rent control regulations must allow for a minimum 5% annual rent increase, and
 DSCR must be ≥ 1.35.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

INELIGIBLE PROPERTIES See APPENDIX for list of ineligible property types.
INSURANCE

PROPERTY INSURANCE

Hazard insurance coverage should be in the amount corresponding to:
 100% of the insurable value of improvements, as established by the property insurer
(Replacement Cost Estimator or equivalent); or
 The unpaid principal balance of the mortgage, as long as it equals the minimum
amount (80% of the insurable value of the improvements) required to compensate
for damage or loss on a replacement cost basis; or
 100% Replacement Cost Coverage as stated on the policy declaration page; or
 Total dwelling coverage equal to the final loan amount.
 Policy must be effective for at least 60 days after the date of funding.

FLOOD INSURANCE

Flood insurance is required for any property located within any area designated by the FEMA
as a Special Flood Hazard Area (SFHA). The minimum amount of flood insurance required for
most first mortgages secured by commercial properties is the lower of:
 100% of the replacement cost of the insurable value of the improvements;
 The maximum insurance available from the National Flood Insurance Program (NFIP),
which is currently $500,000 per dwelling; or
 The unpaid principal balance of the mortgage.

RENT-LOSS INSURANCE Rent Loss Insurance for the subject property is required and must equal at least 6 months

PITIA for the subject property.
TITLE

TITLE POLICY
REQUIREMENTS

 Loans must be covered by a title insurance policy that has been paid in full and is
valid, binding, and remains in full force and effect.
 Preliminary title must indicate that final title policy will be issued after funding.

24-MONTH CHAIN OF TITLE All files must contain a 24-month title history from an acceptable source.
SURVEY REQUIREMENTS A survey is required in the following states: Florida, Kansas, New Mexico, and Texas.

ESCROWS

Monthly escrow for annual taxes, hazard insurance, flood insurance, and HO-6 insurance
coverage is required, unless otherwise specified by applicable state law or an escrow waiver
has been elected (non-HPML loans).
STACKING ORDER

STACKING ORDER

APPLICATION
1003
1008
CREDIT
Credit report
Customer identification

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

10
Entity documentation
Guarantor documentation
VOM/VOM and/or canceled rent checks
Credit explanation letters
Complete bankruptcy papers
Divorce decree or separation agreement
Miscellaneous credit documentation
INCOME
Signed Business Purpose Affidavit
Lease agreements
Miscellaneous documentation for DSCR
ASSETS
Asset statements
Retirement or investment statements
Large deposit verification
Gift documentation
Earnest money verification
Miscellaneous asset documentation
PROPERTY
Appraisal
Commercial BPO
Market rent addendum
Purchase agreements and addendums
Preliminary title policy
Tax cert
Flood cert
Hazard and/or flood insurance
Fraud Report
Compliance Report
MERS
Disclosures

APPENDIX
1. ENTITY BORROWER DOCUMENTATION REQUIREMENTS
 Articles of Organization/Certificate of Formation
 Secretary of State Search

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

 Operating Agreement/Bylaws (or equivalent document based on state requirements including an authorization to
encumber real property and signing authority)
 Certificate of Good Standing
 EIN-Employer Identification Number (or W-9 with acceptable third-party verification)
 Evidence of signing authority for Guarantors signing on behalf of the entity
ARTICLES OF ORGANIZATION/CERTIFICATE OF FORMATION
The following requirements apply to the Articles of Organization/Certificate of Formation:
 The Articles identify the state in which the LLC was organized.
 The Articles is the document to be used to determine the exact name of the LLC.
 In some states, the Articles identify the Manager or Managing Member.
SECRETARY OF STATE SEARCH
The following requirements apply to the Secretary of State search:
 After the state in which the LLC was formed has been identified, search for the LLC on the web site of the Secretary of State
for the applicable state.
 The web site will:
o confirm the state in which the LLC was organized;
o confirm if the LLC is in good standing with the state (not all state websites will confirm good standing); and
o contain the most recent Filings filed with the Secretary of State by the LLC. These filings may be labelled “Annual
Reports,” “Statement of Information,” or “Filings.”

 Open the most recent Statement of Information/Filing to determine the person or entity that manages the LLC.
o The LLC will be managed by either a Manager or a Managing Member.
o If the managing person or managing entity in the Statement of Information does not match the managing person
or managing entity in the Operating Agreement, the discrepancy must be resolved.

OPERATING AGREEMENT
The following requirements apply to the Operating Agreement/Bylaws (or equivalent document based on state requirements
including an authorization to encumber real property and signing authority):
 Review the management section of the Operating Agreement.
o This section identifies whether the LLC is managed by (i) one or more Managers, or (ii) the Members of the LLC.
The Section should also provide the name(s) of the initial Manager(s).
o Review the section to ensure that the Manager or Managing Member has the authority to sign the loan document
or agreement.

 The signature page of the Operating Agreement will identify the Managers and Members.
 Confirm if there are any amendments to the Operating Agreement or Resolutions/Consents changing the identity of the
Managers or Members.

DEEPHAVEN WHOLESALE DSCR 5-9 UNIT UNDERWRITING GUIDELINES

EFFECTIVE 09.22.2025

 If the identity of the Managers or Members in the Operating Agreement differ from the Articles/Certificate or the Statement
of Information/Filing on the Secretary of State’s website, the discrepancy must be resolved.
CERTIFICATE OF GOOD STANDING
 To ensure that the LLC remains in good standing with the state, a Certificate of Good Standing from the Secretary of State
of the state or organization should be ordered.
 If the LLC is obtaining a loan secured by real property in a state that is different from the LLC’s state of organization,
Deephaven must obtain a Certificate of Good Standing in that additional state.
 For example, if a Delaware LLC is obtaining a loan to buy a rental property in the state of Florida, a Lender should obtain a
Certificate of Good Standing from the state of Florida to ensure that the LLC registered as a foreign company with the Florida
Secretary of State.
 Ensure that the Certificate of Good Standing is dated no more than 30 days prior to closing.

2. INELIGIBLE PROPERTY TYPES
 SFR
 2-4 Units
 Acreage > 2 acres
 Assisted Living/Continuing Care Facilities
 Boarding Houses
 Condominiums, Condotels or Condo Hotels
 Co-operative Units
 Dwellings with < 600 Square Feet of GLA
 Farms or Hobby Farms
 Hawaii Properties Located in Lava Zones 1 or 2
 Homes on Indian Reservations
 Log Homes
 Manufactured Homes
 Mixed-Use Properties
 Modular Homes
 Properties Not in Compliance with Local Zoning
 Properties with Known Adverse Environmental Conditions
 Rural Properties
 Townhomes
 Unique Properties (Earth Homes, Berm Homes, Dome Homes, Barndominiums, Shouses, etc.)
 Vacant Land