DSCR loan credit standards, compared across 8 lenders

A DSCR loan qualifies an investment property on the rent it produces rather than the borrower’s personal income. The ratio floor, minimum credit score, reserve requirement and maximum LTV differ by lender, and each publishes its own matrix.

91 verbatim sections from 8 lenders · 158 eligibility tables · newest source document 2026-08-20

DSCR ratio floors found across these lenders: 0.75 · 0.99 · 1.00 · 1.15 · 1.20 These are the values printed in the lenders’ own matrices. They are not interchangeable — each applies only under that lender’s LTV, credit-score and property-type conditions, which are quoted in full below.

Read this before relying on any line below. These are private guidelines, not regulation. Lenders revise them in place at the same URL with no announcement and no version number, so a document read last month may already be superseded. Every quote here names its source file and that file’s own date. Confirm against the lender’s current matrix before you place a loan.

By lender

A&D Mortgage 24 sections

All A&D Mortgage credit standards →

GENERAL PROGRAM INFORMATION

§2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

2. GENERAL PROGRAM INFORMATION 2.1. PROGRAMS AD offers the loan programs below. See the appropriate AD Matrices for additional details and criteria: • AD Owner Occupied / Second Home / Investment Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income Super Prime 0x30x12 and 0x90x24 620 48 months Standard $2,000 Prime 0x60x12 620 12 months Standard / Limited $1,500 • AD Investment Property / DSCR Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Ownership Requirement DSCR (No DTI) 0x30x12 and 0x90x24 620 48 months Standard Not Required • AD Second Home / Investment Property Foreign National Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Ownership Requirement Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 13 Foreign National Full Doc 0x30x12 and 0x90x24 660 48 Months Not Required Not Required Foreign National Asset Utilization 0x30x12 and 0x90x24 660 48 Months Not Required Not Required Foreign National DSCR 0x30x12 and 0x90x24 660 48 Months Not Required Not Required 2.2. PRODUCTS See latest applicable AD Matrix. 2.3. LOAN AMOUNTS AND LOAN-TO-VALUES See latest applicable AD Matrix. The lesser of the purchase price or appraised value of the subject property is the original value used to calculate the loan-to-value, with consideration to the value derived from the secondary valuation waterfall. 2.4. DOCUMENTATION Documentation types include: • Full Documentation • Asset Utilization • Personal Bank Statement Documentation • Business Bank Statement Documentation • Written Verification of Employment (WVOE) • Profit and Loss Statement • 1099 Income 2.5. LOAN AGE The period between the note date and the AD Mortgage funding date cannot exceed 90 days for correspondent loans. AD will consider longer periods on a case-by case basis. 2.6. PREPAYMENT PENALTIES, POINTS, AND FEES Total points, fees, and APR may not exceed current state and federal high-cost thresholds. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 14 Prepayment penalties are allowed on investment property transactions - see applicable AD Matrices for details. Prepayment penalties on primary residence and second home transactions are prohibited. Where permitted by applicable laws and regulations on an investment property, a prepayment charge may be assessed in the period between six (6) months and five (5) years following the execution date of the Note. The prepayment charge will be equal to 6 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. The charge applies to loans that pay off due to sale or refinance, or curtailments that exceed 20% of the original principal balance in each 12-month time period. See rate sheet for further detail. The prepayment penalty can be disclosed within the body of the Note or in a separate rider. The following state restrictions apply: • Prepayment penalties are not allowed in AK, AR, KS, MI, MN, NM, OH (1-2 units with loan amount less than or equal to 116,356) and RI. Prepayment penalty buydown is required. • Prepayment penalties are not allowed on loans vested to individuals in IL, NJ and VT. Prepayment penalty buydown required or close in LLC (maximum prepayment penalty period is 3 years in IL). • Maximum prepayment penalty period is 2 years in MS. • Maximum prepayment penalty period is 3 years in ID and MA. • Maximum prepayment penalty period is 3 years in DC and MD. The prepayment charge will be equal to 2 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. • Virginia a

GENERAL CLOSED-END SECOND LIEN PROGRAM INFORMATION

§2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

2. GENERAL CLOSED-END SECOND LIEN PROGRAM INFORMATION 2.1. PROGRAMS AD offers the loan programs below. See the appropriate AD Matrices for additional details and criteria: • AD Owner Occupied / Second Home Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income US Citizens / Permanent Residents / Non-Perm Residents / Alt-Income 0x30x12 and 0x90x24 680 48 months Standard $2,000 • AD Investment Property / DSCR / Foreign National Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income US Citizens / Permanent Residents / Non-Perm Residents / Alt-Income / DSCR (No DTI) 0x30x12 and 0x90x24 680 48 months Standard $2,000 / DSCR Not Required Foreign National 0x30x12 and 0x90x24 680 (No Fico) 48 Months Not Required Not Required Maximum Combined Loan Amount for both first and second liens is $4,000,000. 2.2. PRODUCTS See latest applicable AD Matrix. 2.3. LOAN AMOUNTS AND LOAN-TO-VALUES See latest applicable AD Matrix. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 13 The lesser of the purchase price or appraised value of the subject property is the original value used to calculate the loan-to-value, with consideration to the value derived from the secondary valuation waterfall. 2.4. DOCUMENTATION Documentation types include: • Full Documentation • Asset Utilization • Personal Bank Statement Documentation • Business Bank Statement Documentation • Written Verification of Employment (WVOE) • 1099 Income 2.5. LOAN AGE The period between the note date and the AD Mortgage funding date cannot exceed 90 days for correspondent loans. AD will consider longer periods on a case-by case basis. 2.6. PREPAYMENT PENALTIES, POINTS, AND FEES Total points, fees, and APR may not exceed current state and federal high-cost thresholds. Prepayment penalties are allowed on investment property transactions - see applicable AD Matrices for details. Prepayment penalties on primary residence and second home transactions are prohibited. Where permitted by applicable laws and regulations on an investment property, a prepayment charge may be assessed in the period between six (6) months and five (5) years following the execution date of the Note. The prepayment charge will be equal to 6 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. The charge applies to loans that pay off due to sale or refinance, or curtailments that exceed 20% of the original principal balance in each 12-month time period. DSCR loans require a minimum 1-year prepayment penalty where allowable by state law. See rate sheet for further detail. The prepayment penalty can be disclosed within the body of the Note or in a separate rider. The following state restrictions apply: • Prepayment penalties are not allowed in AK, AR, KS, MI, MN, NM, OH (1-2 units with loan amount less than or equal to 116,356), RI and TX. Prepayment penalty buydown is required. • Prepayment penalties are not allowed on loans vested to individuals in IL, NJ and VT. Prepayment penalty buydown required or close in LLC (maximum prepayment penalty period is 3 years in IL). • Maximum prepayment penalty period is 2 years in MS. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 14 • Maximum prepayment penalty period is 3 years in ID and MA. • Maximum prepayment penalty period is 3 years in DC and MD. The prepayment charge will be equal to 2 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. • Virginia and Maryland - Prepayment penalties are not allowed on loan balances l

MORTGAGE PAYMENT HISTORY

§6.5.6 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.5.6. MORTGAGE PAYMENT HISTORY Mortgage payment history for the subject property must be verified for the most recent 12 months for mortgages not reported on the credit report and 24 months for mortgages reflected on credit report. • See below regarding delinquency requirements. • On the date of the loan application, the borrower’s existing mortgage must be current, which means that no more than 45 days may have elapsed since the last paid installment date. • If the borrower acquired the property through an inheritance, the borrower must provide an acceptable payment history after the acquisition date. Acceptable sources include institutional or private Verification of Mortgage (VOM). The underwriter must obtain the current balance, current status, monthly payment amount and a satisfactory 12-month payment history. Cancelled checks for the most recent 2 months to verify the validity of the 12-month VOM are required if the mortgage is serviced by the private servicer or not reported on credit report. ANALYZING DELINQUENT MORTGAGE PAYMENTS HISTORY Mortgage/housing payment history is determined as follows: • 3 rolling 30-day lates are considered 1x30, each consecutive mortgage delinquency thereafter must be considered separately. • 60, 90, 120-day lates are not considered for rolling. Following program eligibility criteria applies: Program Delinquency Requirement Description US Citizens / Perm / Non- Perm. / Alt- Income 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 30 US Citizens / Perm / Non- Perm. / Alt- Income DSCR 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date US Citizens / Perm / Non- Perm. / Alt- Income Foreign National 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date HOUSING PAYMENT HISTORY FOR ADDITIONAL PROPERTIES OWNED BY BORROWER When the borrower owns additional property other than the subject property, verification of any mortgage liens on the other properties is required. If the property is indicated to be free and clear of any liens, the underwriter may accept the following indicating no liens: • Homeowners insurance indicating no mortgagee. • A 3rd party lien search. Borrower’s owning 4 or more properties, the following criteria will apply: • A mortgage history will be required on (3) largest investment properties, including the subject property (unless subject transaction is a purchase). In addition, the borrower’s primary residence housing history is required to be verified. • VOM or equivalent – Private Lender – When investment properties are financed and serviced by a Private Lender or not reported on credit report, only 2-months of cancelled checks or bank statements (reflecting the ACH payment) verifying timely payments will be required. In addition, the payoff statement for the subject property can reflect no more than 30-days of accrued interest. For borrower’s owning fewer than 4 properties, the payment history for all financed properties must be verified for the most recent 24-month period if mortgage is reflected on credit report and 12-month period if mortgage is not reflected on credit report. If the borrower acquired properties through an inheritance, the borrower must provide an acceptable payment history after the acquisition date. *When an REO is stated at initial as free and clear on DSCR loan files we do not require further verification. HOUSING PAYMENT HISTORY PROPERTIES OWNED BY BUSINESS Properties other than

CO-BORROWERS WITH DIFFERENT RESIDENCY

§13.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

13.5.1. CO-BORROWERS WITH DIFFERENT RESIDENCY Loans to US Citizen and Permanent Resident borrowers with Non-Permanent Resident Alien co- borrowers will be qualified based on Non-Permanent Resident eligibility criteria. Loans to US Citizen and Permanent Resident borrowers with Foreign National co-borrowers will be qualified based on Foreign National eligibility criteria. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 93 13.6. NON-OCCUPANT CO-BORROWERS /CO-SIGNERS / GUARANTORS Non-occupant borrowers are allowed which are owners of the subject property and are obligated to repay a loan on an owner-occupied or second home. Such non-occupant borrowers cannot be the primary income earners and are immediate relatives to one of the occupying borrowers either by family relation or marriage. Non-occupying co-borrowers are ineligible for cash-out transactions. 13.7. FIRST-TIME HOMEBUYER A first-time homebuyer is defined as a borrower who had no ownership interest in a residential or mixed-use properties up to 20 units in the United States (for Foreign National programs property ownership in any country suffice) during the preceding three (3) year period. If one (1) borrower is a first-time homebuyer and the other borrower is not, then first-time homebuyer guidance does not apply. Residential properties owned under business entity are eligible with a minimum 25% entity ownership requirement. The following requirements apply to first-time homebuyer transactions: • The borrower must contribute at 5% own funds for owner occupied transaction and 10% for investment • Max 80 CLTV for Bank statement document type • First-time homebuyer is allowed on DSCR program. Short-term rentals are not allowed. • First-time homebuyers with payment shock exceeding 300% are ineligible. Payment shock measures the increase in a borrower’s monthly housing expense compared to their current housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. 13.8. MULTIPLE FINANCED PROPERTIES AND AD EXPOSURE AD Mortgage exposure may not exceed $5M aggregate with a maximum of 10 loans for each individual borrower in 6 months span counting from 1st loan’s note date to the most recent loan’s note date. Exceptions to this policy may be reviewed on a case-by-case basis. When the subject property is a primary residence, second home or investment property, there are no limitations on the number of other properties the borrower(s) may currently have financed. 13.9. INELIGIBLE BORROWERS The following borrowers are not eligible: • Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction. • Non-occupant co-borrowers are ineligible for cash-out transactions. • Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority). Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 94 • Irrevocable Trusts or Land Trusts. • Borrowers less than 18 years old. • If the application, title, or credit documents indicate the borrower is involved in a lawsuit or litigation Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 95 Exhibit 1 - “VISA” Visa classifications allowed as Non-Permanent Resident Aliens Visa Valid EAD Card Description B1/A3/G5 C17 Non-i

CO-BORROWERS WITH DIFFERENT RESIDENCY

§13.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

13.5.1. CO-BORROWERS WITH DIFFERENT RESIDENCY Loans to US Citizen and Permanent Resident borrowers with Non-Permanent Resident Alien co- borrowers will be qualified based on Non-Permanent Resident eligibility criteria. Loans to US Citizen and Permanent Resident borrowers with Foreign National co-borrowers will be qualified based on Foreign National eligibility criteria. 13.6. NON-OCCUPANT CO-BORROWERS /CO-SIGNERS / GUARANTORS Non-occupant borrowers are allowed which are owners of the subject property and are obligated to repay a loan on an owner-occupied or second home. Such non-occupant borrowers cannot be the primary income earners and are immediate relatives to one of the occupying borrowers either by family relation or marriage. Non-occupying co-borrowers are ineligible for cash-out transactions. 13.7. FIRST-TIME HOMEBUYER A first-time homebuyer is defined as a borrower who had no ownership interest in a residential or mixed-use properties up to 20 units in the United States (for Foreign National programs property ownership in any country suffice) during the preceding three (3) year period. If one (1) borrower is a first-time homebuyer and the other borrower is not, then first-time homebuyer guidance does not apply. Residential properties owned under business entity are eligible with a minimum 25% entity ownership requirement. The following requirements apply to first-time homebuyer transactions: • Maximum loan amount of $1,000,000 • Min 660 FICO for Super Prime and Prime, min 680 FICO for DSCR or No FICO (only for FN) • Max DTI 50 • Max 80 CLTV for Bank statement document type • The borrower must contribute at 5% own funds for owner occupied transaction and 10% for investment • First-time homebuyer is allowed on DSCR program with minimum DSCR 1. Short-term rentals are not allowed. • First-time homebuyers with payment shock exceeding 300% are ineligible. For P&L document type payment shock cannot exceed 100%. Payment shock measures the increase in a borrower’s Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 111 monthly housing expense compared to their current housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. 13.8. MULTIPLE FINANCED PROPERTIES AND AD EXPOSURE AD Mortgage exposure may not exceed $5M aggregate with a maximum of 10 loans for each individual borrower in 6 months span counting from 1st loan’s note date to the most recent loan’s note date. Exceptions to this policy may be reviewed on a case-by-case basis. When the subject property is a primary residence, second home or investment property, there are no limitations on the number of other properties the borrower(s) may currently have financed. 13.9. INELIGIBLE BORROWERS The following borrowers are not eligible: • Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction. • Non-occupant co-borrowers are ineligible for cash-out transactions. • Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority). • Irrevocable Trusts or Land Trusts. • Borrowers less than 18 years old. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 112 Exhibit 1 - “VISA” Visa classifications allowed as Non-Permanent Resident Aliens Visa Valid EAD Card Description B1/A3/G5 C17 Non-immigrant domestic servant (VISA and Valid EAD Card must be combined) BC-1 N Broadcaster in the US employed by the International Broadcasting Bureau of the Broad

CREDIT SCORES

§6.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.5.1. CREDIT SCORES US Citizens, Permanent Residents or Non-Permanent Residents residing in United States, the lowest qualifying score of all applicants is used to qualify. The qualifying score is defined as the lower of 2 or middle of 3 scores for each borrower. Borrowers with 1 available credit score reviewed on a case-by- case basis. Borrowers with no available credit score which contain no evidence of prior adverse or negative credit history are eligible for financing on the Prime program. For pricing and eligibility purposes refer to Eligibility Matrix with “No Fico” bucket. If the score is available, the loan may be priced using the actual Representative Loan Score. Borrowers with no credit scores may be considered for DSCR program on a case-by-case basis. Foreign Nationals are not subject to credit score requirements unless Credit Score history is available. Foreign Nationals with active credit scores, will use middle of 3 or lowest for 2 or 1 if only 1 score available for FICO/LTV eligibility criteria and worst-case pricing. For all programs, the applicable credit score is the middle of three scores provided for any borrower. If only two credit score are obtained, the lesser of two will be used. When there are multiple borrowers/guarantors, the lowest applicable score (if at least one No FICO - worst case between existing score and no FICO) from the group of borrowers/guarantors is the representative credit score for qualifying (the Representative Loan Score).

BUSINESS DEBT

§6.7.3 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.7.3. BUSINESS DEBT Business debt appearing on the borrower's individual credit report will be included in the debt calculation unless the debt can be verified as a business expense and independent of the borrower's personal obligation. Documentation Requirements • Twelve (12) months canceled checks; or • Automatic drafts from the business account • Business debt being excluded from the monthly obligation must have a paid-on time payment history. 6.8. ASSETS Assets to be used for down payment, closing costs, debt payoff, and reserves must be seasoned or sourced for 30 days. If cash out proceeds are used for reserves most recent 1 month’s bank statement must be provided prior to closing where funds will be disbursed. Documentation must be provided to evidence seasoning and sourcing by any of the following: • Most recent 1 month’s account statements, or most recent quarterly account statement, indicating opening and closing balances, and reflecting a consecutive 30 days of asset verification • Supporting documentation should be obtained for single, unexplained deposits that exceed 50% of the borrower’s gross monthly qualifying income for the loan • Documentation of large deposits is not required on refinance transactions • Written Verification of Deposit (VOD), completed by the financial institution • Must include the current and average balances for the most recent 1 month • Large disparities between the current balance and the opening balances will require additional verification or supporting documentation • Online bank statements are acceptable if they clearly identify the account holder and the URL associated with the financial institution (printouts from the financial institution printed and signed by financial institution officer are acceptable for qualification) • Account statements must provide all of the following information: o Borrower as the account holder o Account number o Statement date and time-period covered o Current balance in US dollars o For new bank accounts with less than 30 days seasoning, all ‘large’ or ‘unusual’ deposits should be verified (even for DSCR where income not qualified) Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 52

GIFT FUNDS

§6.8.2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.8.2. GIFT FUNDS • Gift funds are acceptable on rate/term refinance transactions and no minimum borrower contribution is required. Gift funds are allowed for primary or second home purchase transactions with 80% CLTV without any contribution from the borrower. For CLTV above 80% CLTV, borrower must contribute at least 5% from their own funds. For investment transaction, the borrower must contribute at least 10% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80% on Investment property. Other parameters can affect borrower’s contribution requirements, please, refer to the list below the matrix. See below matrix: • For WVOE and Asset Utilization, the borrower must contribute at least 20% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80%. • The first-time home buyers must contribute at least 5% from their own funds on Primary Residence and Second Homes and at least 10% on Investment. Gift funds are not allowed for CLTV above 80% on Investment property. • Gift funds are allowed for down payment and closing costs. Gift funds are not allowed to be used Minimum Borrower Contribution per Occupancy <=80% CLTV >80% CLTV Primary Residence and Second Homes 0% 5% Investment 10% Not available DSCR and Foreign National 10% Not available Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 53 for reserves. • The donor must be an a relative, defined as the borrower’s spouse, child, or other dependent, or by any other individual who is related to the borrower by blood, marriage, adoption, legal guardianship, future spouse, or domestic partner residing with the borrower. The donor may not have any affiliation with a party to the transaction, unless transaction is gift of equity (the donor can be a seller). • An executed gift letter with the gift amount, donor’s name, address, and telephone number and relationship is required. • Gift of equity is allowed following the requirements below: o Primary Residence only. o Maximum 75% CLTV. o Must meet all other guidelines for Gift Funds. o Gift of Equity requires a gift letter, and the equity gift credit is to be shown on the CD. o Original Note and payment history for the seller’s mortgage on the subject property must be obtained and show no pattern of delinquency within the past 12 months (if applicable). Foreclosure bailout is not allowed. o Private mortgages on the property are not allowed, the grantor’s soft-pulled credit report is required. • Proof of transfer and receipt of funds. Acceptable documentation includes the following: o A copy of the donor’s check and the borrower’s deposit slip, or o A copy of the donor’s withdrawal slip and the borrower’s deposit slip, or o A copy of the donor’s check to the closing agent, or o A settlement statement showing receipt of the donor’s check. When the funds are not transferred prior to settlement, the lender must document that the donor gave the closing agent the gift funds in the form of a certified check, cashier’s check, other official check or wire.

CREDIT SCORES

§6.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.5.1. CREDIT SCORES US Citizens, Permanent Residents or Non-Permanent Residents residing in United States, the representative credit score is used to qualify. The representative credit score is defined as the lower of 2 or middle of 3 scores for each borrower. Borrowers with 1 available credit score reviewed on a case- by-case basis. Borrowers with no available credit score which contain no evidence of prior adverse or negative credit history within last 48 months are eligible for financing on the Prime program. For pricing and eligibility purposes refer to Eligibility Matrix with “No Fico” bucket. If the score is available, the loan may be priced using the actual Representative Loan Score. Borrowers with no credit scores may be considered for DSCR program on a case-by-case basis. Foreign Nationals are not subject to credit score requirements unless Credit Score history is available. Foreign Nationals with active credit scores, will use middle of 3 or lowest for 2 or 1 if only 1 score available for FICO/LTV eligibility criteria and worst-case pricing. For all programs, the applicable credit score is the middle of three scores provided for any borrower. If only two credit score are obtained, the lesser of two will be used. For loan files with multiple borrowers/guarantors: • Super Prime, Prime and Foreign National Full Documentation/Asset Utilization: The borrower with the highest monthly income is considered the primary wage earner and their credit score will be used as the representative credit score. • DSCR and Foreign DSCR: the highest representative credit score amongst all borrowers/guarantors is used. Additionally, all non-foreign national borrowers on the loan must have a representative credit score of 620 or greater. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 38

TRADELINE REQUIREMENTS

§6.5.2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.5.2. TRADELINE REQUIREMENTS Refer to program specific guidelines for additional tradeline requirements, if any. For Super Prime and Prime, if the primary borrower has three (3) credit scores, the minimum tradeline requirement is waived. For loans when the primary borrower has less than three (3) credit scores, each borrower must meet the minimum tradeline requirements. For DSCR, if at least one borrower has three (3) credit scores, the minimum tradeline requirement is waived, otherwise, each borrower must meet the minimum tradeline requirements. To qualify as an acceptable tradeline, the credit line must be reflected on the borrower’s credit report. The tradeline requirement applies to all borrowers whose income was used for qualification purposes, unless the requirement is waived. The account must have been open at any given moment in the last 12 months. Reporting tradeline period refers to how many months such tradeline has been captured on the credit report. Accounts with delinquencies are allowed when the account has reported no more than 30-days past due. An acceptable 12 or 24-month housing history not reporting on credit report may also be used as a tradeline. Credit lines on which the borrower or co-borrower is not obligated to make payments are not acceptable for establishing a minimum history. Examples of unacceptable tradelines include loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts. Student loans can be counted as tradelines as long as they are in repayment and are not deferred.

MORTGAGE PAYMENT HISTORY

§6.5.7 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.5.7. MORTGAGE PAYMENT HISTORY Mortgage payment history for the subject property on refinance transactions or quitclaim deed must be verified for any person or entity for the most recent 12 months for mortgages not reported on the credit report and 24 months for mortgages reflected on credit report. • See below regarding delinquency requirements. • On the date of the loan application, the borrower’s existing mortgage must be current, which means that no more than 45 days may have elapsed since the last paid installment date. • If the borrower acquired the property through an inheritance, the borrower must provide an acceptable payment history after the acquisition date. Acceptable sources include institutional or private Verification of Mortgage (VOM). The underwriter must obtain the current balance, current status, monthly payment amount and a satisfactory 12-month payment history. Cancelled checks for the most recent 2 months to verify the validity of the 12-month VOM are required if the mortgage is serviced by the private servicer or not reported on credit report. ANALYZING DELINQUENT MORTGAGE PAYMENTS HISTORY Mortgage/housing payment history is determined as follows: • 3 rolling 30-day lates are considered 1x30, each consecutive mortgage delinquency thereafter must be considered separately. • 60, 90, 120-day lates are not considered for rolling. Following program eligibility criteria applies: Program Delinquency Requirement Description Super Prime 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date Prime 0x60x12 Borrower cannot have 60 days late mortgage payments within last 12 months prior to note date DSCR 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date Foreign National 0x30x12 and 0x90x24 Borrower cannot have mortgage lates within last 12 months prior to note date and 0x90 mortgage lates within last 24 months prior to note date HOUSING PAYMENT HISTORY FOR ADDITIONAL PROPERTIES OWNED BY BORROWER When the borrower owns additional property other than the subject property, verification of any mortgage liens on the other properties is required. If the property is indicated to be free and clear of any liens, the underwriter may accept the following indicating no liens: Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 41 • Homeowners insurance indicating no mortgagee. • A 3rd party lien search. Borrower’s owning 4 or more properties, the following criteria will apply: • A mortgage history will be required on (3) largest investment properties, including the subject property (unless subject transaction is a purchase). In addition, the borrower’s primary residence housing history is required to be verified. • VOM or equivalent – Private Lender – When investment properties are financed and serviced by a Private Lender or not reported on credit report, only 2-months of cancelled checks or bank statements (reflecting the ACH payment) verifying timely payments will be required. In addition, the payoff statement for the subject property can reflect no more than 30-days of accrued interest. For borrower’s owning fewer than 4 properties, the payment history for all financed properties must be verified for the most recent 24-month period if mortgage is reflected on credit report and 12-month period if mortgage is not reflected on credit report. If the borrower acquired properties through an inheritance, the borrower must provide an acceptable payment history after the acquisition date. *When an REO is stated at initial as free and clear on DSCR loan files we do not require further verification. HOUSING PAYMENT HISTORY PROPER

BUSINESS DEBT

§6.7.3 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.7.3. BUSINESS DEBT Business debt appearing on the borrower's individual credit report will be included in the debt calculation unless the debt can be verified as a business expense and independent of the borrower's personal obligation. Documentation Requirements • Twelve (12) months canceled checks; or • Automatic drafts from the business account • Business debt being excluded from the monthly obligation must have a paid-on time payment history. 6.8. ASSETS Assets to be used for down payment, closing costs, debt payoff, and reserves must be seasoned or sourced for 30 days. If cash out proceeds are used for reserves most recent 1 month bank statement must be provided prior to closing where funds will be disbursed. Documentation must be provided to evidence seasoning and sourcing by any of the following: • Most recent 1 month’s account statement, or most recent quarterly account statement, indicating opening and closing balances, and reflecting a consecutive 30 days of asset verification • Supporting documentation should be obtained for single, unexplained deposits that exceed 50% of the borrower’s gross monthly qualifying income for the loan • Documentation of large deposits is not required on refinance transactions • Written Verification of Deposit (VOD), completed by the financial institution • Must include the current and average balances for the most recent 1 month • Large disparities between the current balance and the opening balances will require additional verification or supporting documentation • Online bank statements are acceptable if they clearly identify the account holder and the URL associated with the financial institution (printouts from the financial institution printed and signed by financial institution officer are acceptable for qualification) • Account statements must provide all of the following information: o Borrower as the account holder o Account number o Statement date and time-period covered o Current balance in US dollars o For new bank accounts with less than 30 days seasoning, all ‘large’ or ‘unusual’ deposits should be verified (even for DSCR where income not qualified) Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 67

GIFT FUNDS

§6.8.2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.8.2. GIFT FUNDS • Gift funds are acceptable on rate/term refinance transactions and no minimum borrower contribution is required. Gift funds are allowed for primary or second home purchase transactions with 80% CLTV without any contribution from the borrower. For CLTV above 80% CLTV, borrower must contribute at least 5% from their own funds. For investment transaction, the borrower must contribute at least 10% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80% on Investment property. Other parameters can affect minimum borrower’s contribution requirements, please, refer to the list below the matrix. See below matrix: • For WVOE, P&L and Asset Utilization, the borrower must contribute at least 20% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80%. • The ITIN borrower(s) must contribute at least 5% from their own funds on Primary Residence and Second Homes and at least 10% on Investment. Gift funds are not allowed for CLTV above 80% on Investment property. • The first-time homebuyers must contribute at least 5% from their own funds on Primary Minimum Borrower Contribution per Occupancy <=80% CLTV >80% CLTV Primary Residence and Second Homes 0% 5% Investment 10% Not available DSCR and Foreign National 10% Not available Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 68 Residence and Second Homes and at least 10% on Investment. Gift funds are not allowed for CLTV above 80% on Investment property. • Gift funds are allowed for down payment and closing costs. Gift funds are not allowed to be used for reserves. • The donor must be an a relative, defined as the borrower’s spouse, child, or other dependent, or by any other individual who is related to the borrower by blood, marriage, adoption, legal guardianship, future spouse, or domestic partner residing with the borrower. The donor may not have any affiliation with a party to the transaction, unless transaction is gift of equity (the donor can be a seller). • An executed gift letter with the gift amount, donor’s name, address, and telephone number and relationship is required. • Proof of transfer and receipt of funds. Acceptable documentation includes the following: o A copy of the donor’s check and the borrower’s deposit slip, or o A copy of the donor’s withdrawal slip and the borrower’s deposit slip, or o A copy of the donor’s check to the closing agent, or o A settlement statement showing receipt of the donor’s check. When the funds are not transferred prior to settlement, the lender must document that the donor gave the closing agent the gift funds in the form of a certified check, cashier’s check, other official check or wire. • Gift of Equity is allowed following the below requirements: o Primary Residence only. o Maximum 75% CLTV. o Must meet all other guidelines for Gift Funds. o Gift of Equity requires a gift letter, and the equity gift credit is to be shown on the CD. o Original Note and payment history for the seller’s mortgage on the subject property must be obtained and show no pattern of delinquency within the past 12 months (if applicable). Foreclosure bailout is not allowed. o Private mortgages on the property are not allowed, the grantor’s soft-pulled credit report is required.

BANK STATEMENTS ANALYSIS TOOLS

§6.5.15 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.5.15. BANK STATEMENTS ANALYSIS TOOLS AD can accept bank statement analysis tools for calculation of deposits and NSFs attached to the file with underwriter’s certification and bank statements review. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 33 6.6. INCOME AND EMPLOYMENT Stable monthly income is the borrower's verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue. While the sources of income may vary, the borrower should have a consistent level of income despite changes in the sources of income. Future income is not permitted for qualifying purposes. Income from a position not yet commenced – including income documented solely by an offer letter, a signed employment contract, or a scheduled raise or promotion – is not eligible. All qualifying income must be currently active and verifiable at the time of application. Can commingle documentation types subject to guideline restrictions and underwriter discretion (i.e., no tax returns in bank statement programs, DSCR is standalone). Verification for Employed Borrowers: A minimum two (2) year employment history is required. Any gaps in employment that span one or more months must be explained. AD is allowing some flexibility in lieu of the traditional verbal verification of employment with one of the following methods: • Written VOE: An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. This is required within 10 business days of the note date. • Paystub: The underwriter may obtain a year-to-date paystub from the pay period that immediately precedes the note date. Verification for All Self-Employed Borrowers: • Underwriter must verify the existence of the business within 120 business days of the note date and ensure the business is active. Acceptable methods of business verification include: o Secretary of State Website. A list of SOS websites may be found at https://e- secretaryofstate.com/ o Verifying a phone listing and address for the borrower's business using a telephone book, the Internet, or directory assistance o Active Insurance policy (Errors & Omissions) o Documentation showing registration for remitting sales tax o Paid Supplier Invoices o Bank Statements with transactions within 120 days o Certificate of business existence issued within 120 days o CPA verification • For bank statements programs a business narrative is required prior to submission. • Underwriter must consider the financial strength of a self-employed borrower's business. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 34 • Underwriter will complete review on borrower’s business to validate 2 and more years of existence, and business ownership %. The borrower’s business used for qualifying purposes must have been in existence for at least two years. The borrower also must own the business for at least two years in case of the change of ownership. A change in structure is allowed with proper documentation – example borrower previously was a sole proprietor but has changed structure to an LLC with 100% ownership. A minimum of 25% ownership is required for self-employed borrowers. • A change in the ownership structure of the business during the loan process is prohibited. • CPA Letter requirements: o Attestation that the CPA/Tax Preparer/Enrolled tax agent has filed or reviewed at least previous year of tax returns or financial audit for the borrower. o The letter must be signed by CPA/Tax Prepare

DEBT-SERVICE COVERAGE RATIO (DSCR)

§6.6.12 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.6.12. DEBT-SERVICE COVERAGE RATIO (DSCR) General requirements: • The DSCR calculation is as follows: o Debt-Service Coverage Ratio = Gross Income / Proposed PITIA • DSCR calculation will be based on the total of both P&I of the 1st lien and the PITIA of the proposed second lien • For DSCR eligibility requirements refer to the matrix When a long-term rent is used for DSCR calculation: 100% of long-term rental value will be used for qualification purposes. Leases that have been converted to month-to-month are allowed. Leases to companies owned or controlled, in whole or in part, by the borrower are prohibited and will not be accepted. To calculate gross income, actual rent, or rental valuation from 1007 for non-ADU properties may be used: • Actual rent reflected on:  1007  Lease agreement o Existing fully executed lease agreement o New lease - for purchase transactions: acceptable with 2 months’ payments o New lease - for refinance transactions: acceptable with 2 months’ payments, if the actual rent exceeds the estimated market rent by more than 25%, the rents are capped at 125% (for ex, threshold would be 1007*1.25). To calculate gross income, actual rent, or rental valuation for the accessory unit (ADU): • For purchase transactions: o The lower of the market rent on FNMA Form 1007 or actual rent may be used. • For refinancing transactions: o The actual rent for the accessory unit from FNMA Form 1007 may be used supported by a copy of the current lease agreement with two (2) months proof of current receipt A vacant property is allowed with maximum 70% CLTV for refinances transactions. If there is no actual rent available for review, then rental valuation on appraisal form 1007 will be used. If actual rent is greater than 1007 by 25% then the actual rent from a lease can be used with 2 cancelled checks provided (for ex, threshold would be 1007*1.25). When a short-term rent is used for DSCR calculation: 75% of short-term rental value will be used for qualification purposes (to adjust for rental expenses). To calculate gross income, actual rent, or rental valuation from AirDNA rentalizer may be used: Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 48 • Actual rent reflected on:  Short-term rental agreement (12 months average rental income)  1007 (if reflected as short-term rental) When no actual rental income is available for review, estimated short-term rental income may be used on purchase transactions only. In such cases, qualifying income may be calculated using: • 75% of the short-term rental income estimate from AirDNA Rentalizer, provided the occupancy rate is 60% or greater, or • 75% of the Form 1007 market rent, but only if 1007 includes short-term rental comparable properties. For refinance transactions, short-term rental income is not permitted when the subject property is occupied under a long-term rental agreement. The short-term rent from accessory unit (ADU) is not allowed. To proceed with a short term rent the borrower must comply with all state and county regulations for short term rental and sign the short-term rental addendum. The short-term rental is prohibited in VT state and the following counties in NY state (excluding condotels): Kings County, Queens County, New York County, Bronx County, Richmond County.

RESIDUAL INCOME

§6.7.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

6.7.1. RESIDUAL INCOME All loans must meet the residual income requirements below. • Residual income calculation must be calculated on each loan, except on loans that fall under business purpose lending. • Residual income equals Gross Monthly Qualifying Income less the Monthly Debt obligation. o $2,000 (FN and DSCR not applicable)

ASSET VERIFICATION

§13.3.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01

13.3.4. ASSET VERIFICATION Non-Permanent Resident Aliens must follow minimum reserves requirements from 6.8.6 RESERVES for the subject property, all programs. The seasoning requirement for purchase, rate/term, and cash out refinance is 30 calendar days. Assets must be verified in U.S. Dollar equivalency at the current exchange rate via either www.xe.com or the Wall Street Journal conversion table. A US bank account is required prior to clear to close for all non-permanent resident borrowers. MIXED OR OVERSEAS ASSETS Will allow overseas business funds into personal accounts. AD will need a letter from the CPA, signed and include the preparation date, covering 12 or 24 months (depending on program) explaining where overseas business is from and nature of business. 13.4. FOREIGN NATIONAL A Foreign National is a non-U.S. citizen authorized to live in the U.S. on a temporary basis but does not meet the definition of a Non-Permanent Resident Alien. Foreign National Borrower qualify under Investment Property - DSCR program with foreign national pricing/LTV grid and the Investment Property – Full Doc. EAD card is not required if visa is active. All purchase transactions in Florida made to foreign principals, persons, and entities must have the signed Buyer’s Affidavit published by the Florida Land Title Association. 13.4.1. VERIFICATION OF RESIDENCY STATUS The visa types considered as Foreign Nationals listed in “Exhibit 1 – VISA. Visa types considered as Foreign Nationals". Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 90 VISA EXPIRATION REQUIREMENTS Borrower has to have active visa as of the note date or be legally present in the US. Copies of the borrower’s passport and unexpired visa must be obtained. Acceptable alternative documentation to verify visa classification is an I-797 form (Notice of Action) with valid extension dates and an I-94 form (Arrival/Departure Record). Borrowers unable to provide evidence of lawful residency status in the U.S. are not eligible for financing. VISA WAIVER PROGRAM AND CITIZENS OF CANADA OR BERMUDA Borrowers who are residents of countries which participate in the State Department’s Visa Waiver Program (VWP) will not be required to provide a valid visa. Participating countries can be verified through the U.S. Department of State website at https://travel.state.gov/content/travel/en/us- visas/tourism-visit/visa-waiver-program.html Following document required to confirm valid VWP status - Unexpired ESTA Authorization from U.S. Customs Border and Protection https://esta.cbp.dhs.gov/esta/ , if authorization expires in 60 days from the application date updated authorization required to be provided prior to closing. Citizens of Canada and Bermuda do not require ESTA. 13.4.2. CREDIT REQUIREMENTS A U.S. credit report should be obtained for each Foreign National borrower with a valid Social Security number. The credit report should provide merged credit information from the 3 major national credit repositories. For borrowers without a valid Social Security number, an Individual Taxpayer Identification Number (ITIN) is also allowed. A traditional U.S. credit report is not required for borrowers without a valid SSN, however, would be obtained and taken into consideration if exists. Foreign National borrowers who do not have a SSN or ITIN may still proceed under the Foreign National Program. All other program requirements still apply. QUALIFYING U.S. CREDIT The Qualifying U.S. Credit designation refers to non-U.S. citizen borrowers who meet Standard Tradelines or have a minimum of one active tradeline opened for 24 months with no derogatory history. A Qualifying U.S. Credit borrower is eligible for all investment property products and programs reflected on the AD Investment Property Matrix. If non-U.S. citize

FINANCING POINTS

§2.6.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

2.6.1. FINANCING POINTS AD will allow the borrower to finance points and/or closing cost into the loan transaction by increasing loan amount based on the following parameters: • Maximum base CLTV for an owner-occupied property or second home = 75% • Maximum base CLTV for an investment property = 70% Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 15 • Maximum base CLTV for DSCR property = 70% • Maximum base CLTV for Foreign National = 65% • Maximum 2% may be financed into the transaction • The financed points will not raise the CLTV for pricing purposes and eligibility criteria. The pricing and eligibility will remain based upon the original base loan amount or CLTV without financing of points. 2.7. EXCEPTIONS Exceptions to published guidelines are considered on a case-by-case basis. Loans with exception requests should exhibit compensating factors. All exception requests must be submitted by the Requestor in writing to the Exceptions Committee via the Exception Form. The fully completed AD Mortgage Exception Request Form along with any supporting documentation is required. AD 's decision to allow or deny any exception request relates only to whether AD will approve a loan. 2.8. ESCROWS – IMPOUND ACCOUNTS Escrow funds/impound accounts are required to be established for all loans originated by AD Mortgage. Escrows may be established for funds collected as required to be paid under the security instrument. Escrow funds include, but are not limited to, taxes, insurance (hazard, flood, and mortgage) premiums, special assessments, ground rents, water, sewer, etc. AD can waive escrow for TILA Non-HPML Loans on primary residence, second homes, and investment properties under Super Prime, Prime, DSCR and Foreign National programs. Please refer to AD Matrix for LTV restrictions and additional criteria. Flood Insurance Escrows can never be waived regardless of loan type or program. 2.9. TEMPORARY BUYDOWN AD Mortgage allows temporary buydown on Owner Occupied properties on Purchase transactions. The note rate without consideration of the bought-down rate will be used for qualifying purposes. The funds for buydown cannot come from the borrower. When the source of the buydown funds is an interested party to the property sale or purchase transaction, interested-party contribution limits apply. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 16

COLLECTIONS AND CHARGE-OFFS

§6.5.10 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.5.10. COLLECTIONS AND CHARGE-OFFS The following accounts may remain open: • Collections and charge-offs < 24 months old with a maximum cumulative balance of $2,000 • Collections and charge-offs ≥ 24 months old with a maximum of $2,500 per occurrence • Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required) • All medical collections For the Super Prime Program and the DSCR Investment Credit Grade, collection and charge-off balances exceeding the amounts listed above must be paid in full. Under all other programs, collection and charge-off account balances exceeding limits listed above may remain open when one of the following is met: • Borrower has sufficient reserves to cover remaining collection and charge-off balances (in addition to the published reserve requirement); or • Payment for remaining collections and charge-offs included in DTI results in final DTI ≤ 50% (payment calculated at 5% of balance of remaining unpaid collections and charge-offs). A combination of the two options above is allowed. A portion of the unpaid collection balance can be included in the DTI while the remainder is covered by excess reserves. Collections and charge-offs that Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 43 cannot be factored into DTI or reserves must be paid off. Exceptions may be applied with compensations factors on a case-by-case basis.

BANK STATEMENTS ANALYSIS TOOLS

§6.5.16 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.5.16. BANK STATEMENTS ANALYSIS TOOLS AD can accept bank statement analysis tools for calculation of deposits and NSFs attached to the file with underwriter’s certification and bank statements review. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 44 6.6. INCOME AND EMPLOYMENT Stable monthly income is the borrower's verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue. While the sources of income may vary, the borrower should have a consistent level of income despite changes in the sources of income. Future income is not permitted for qualifying purposes. Income from a position not yet commenced – including income documented solely by an offer letter, a signed employment contract, or a scheduled raise or promotion – is not eligible. All qualifying income must be currently active and verifiable at the time of application. Can commingle documentation types subject to guideline restrictions and underwriter discretion (i.e., no tax returns in bank statement programs, DSCR is standalone). Verification for Employed Borrowers: A minimum two (2) year employment history is required. Any gaps in employment that span one or more months must be explained. AD is allowing some flexibility in lieu of the traditional verbal verification of employment with one of the following methods: • Written VOE: An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. This is required within 10 business days of the note date. • Paystub: The underwriter may obtain a year-to-date paystub from the pay period that immediately precedes the note date. Verification for All Self-Employed Borrowers: • Underwriter must verify the existence of the business within 120 business days of the note date and ensure the business is active. Acceptable methods of business verification include: o Secretary of State Website. A list of SOS websites may be found at https://e- secretaryofstate.com/ o Verifying a phone listing and address for the borrower's business using a telephone book, the Internet, or directory assistance o Active Insurance policy (Errors & Omissions) o Documentation showing registration for remitting sales tax o Paid Supplier Invoices o Bank Statements with transactions within 120 days o Certificate of business existence issued within 120 days o CPA verification • For bank statements and P&L programs a business narrative is required prior to submission. • Underwriter must consider the financial strength of a self-employed borrower's business. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 45 • Underwriter will complete review on borrower’s business to validate 2 and more years of existence, and business ownership %. The borrower’s business used for qualifying purposes must have been in existence for at least two years. The borrower also must own the business for at least two years in case of the change of ownership. A change in structure is allowed with proper documentation – example borrower previously was a sole proprietor but has changed structure to an LLC with 100% ownership. A minimum of 25% ownership is required for self-employed borrowers. • A change in the ownership structure of the business during the loan process is prohibited. • CPA Letter requirements: o Attestation that the CPA/Tax Preparer/Enrolled tax agent has filed or reviewed at least previous year of tax returns or financial audit for the borrower. o The letter must be signed by CPA/Tax Preparer/En

DEBT-SERVICE COVERAGE RATIO (DSCR)

§6.6.13 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.6.13. DEBT-SERVICE COVERAGE RATIO (DSCR) The DSCR calculation is as follows: Debt-Service Coverage Ratio = Gross Income / Proposed PITIA (or ITIA for interest-only loans). Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 62 When a long-term rent is used for DSCR calculation: 100% of long-term rental value will be used for qualification purposes. Leases that have been converted to month-to-month are allowed. Leases to companies owned or controlled, in whole or in part, by the borrower are prohibited and will not be accepted. To calculate gross income, actual rent, or rental valuation from 1007/1025 for 1-4 units for non-ADU properties may be used: • Actual rent reflected on:  1007/1025 for 1-4 units  Lease agreement o Existing fully executed lease agreement o New lease - for purchase transactions: acceptable with 2 months’ payments o New lease - for refinance transactions: acceptable with 2 months’ payments, if the actual rent exceeds the estimated market rent by more than 25%, the rents are capped at 125% (for ex, threshold would be 1007*1.25). To calculate gross income, actual rent, or rental valuation for the accessory unit (ADU): • For purchase transactions: o The lower of the market rent on FNMA Form 1007 or actual rent may be used. • For refinancing transactions: o The actual rent for the accessory unit from FNMA Form 1007 may be used supported by a copy of the current lease agreement with two (2) months proof of current receipt A vacant property is allowed with maximum 70% CLTV for refinances transactions. If there is no actual rent available for review, then rental valuation on appraisal form 1007/1025 for 1- 4 units will be used. If actual rent is greater than 1007/1025 by 25% then the actual rent from a lease can be used with 2 cancelled checks provided (for ex, threshold would be 1007*1.25). When a short-term rent is used for DSCR calculation: 75% of short-term rental value will be used for qualification purposes (to adjust for rental expenses). To calculate gross income, actual rent, or rental valuation from AirDNA rentalizer may be used: • Actual rent reflected on:  Short-term rental agreement (12 months average rental income)  1007 (if reflected as short-term rental) When no actual rental income is available for review, estimated short-term rental income may be used on purchase transactions only. In such cases, qualifying income may be calculated using: • 75% of the short-term rental income estimate from AirDNA Rentalizer, provided the occupancy rate is 60% or greater, or • 75% of the Form 1007 market rent, but only if 1007 includes short-term rental comparable properties. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 63 For refinance transactions, short-term rental income is not permitted when the subject property is occupied under a long-term rental agreement. The short-term rent from accessory unit (ADU) is not allowed. To proceed with a short term rent the borrower must comply with all state and county regulations for short term rental and sign the short-term rental addendum. The short-term rental is prohibited in VT state and the following counties in NY state (excluding condotels): Kings County, Queens County, New York County, Bronx County, Richmond County.

CASH FLOW ANALYSIS

§6.6.15 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

6.6.15. CASH FLOW ANALYSIS A written evaluation must be prepared of the analysis of a self-employed borrower’s personal income, including the business income or loss, reported on the borrower’s federal income tax returns. A copy of the written analysis must be included in the loan file. 6.7. QUALIFYING RATIOS Refer to the Program Matrix for specific qualifying ratios per loan program. Back-End DTI Super Prime, Prime / Foreign National Debt Ratio 55% / 43% • All programs will be qualified at the greater of the fully indexed rate or the note rate. • Interest Only: Qualifying Ratios are based on PITIA payment with the principal and interest payments amortized over the scheduled remaining loan term at the time of recast after the interest only period has expired. For DSCR Interest Only Qualifying Ratios are based on ITIA payment. • Transactions resulting in significant payment shock should always be considered by the underwriter. The borrower’s income must clearly support the borrower’s ability to make the higher Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 64 monthly payment. It is at the underwriter’s discretion to require additional verification of assets or a larger down payment as a compensating factor for a loan with high payment shock. • First-time homebuyers with payment shock exceeding 300% are ineligible. For P&L document type payment shock cannot exceed 100%. Payment shock measures the increase in a borrower’s monthly housing expense compared to their current housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. • For other properties owned, documentation to confirm the amount and/or presence or absence of liability for P&I, taxes, insurance, HOA dues, lease payments or other property-related expenses must be provided. • DTI > 50% Eligibility: o Primary Residence and Second Home o Purchase, Rate/Term o Maximum 80% CLTV o Min FICO 680 o Maximum loan amount is 1,000,000 o The borrower must NOT be first time homebuyer

ITIN

§13.3.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

13.3.1. ITIN A Non-Permanent Resident Alien without an SSN can qualify using ITIN (Individual Taxpayer Identification Number). The borrower(s) must possess a valid ITIN card or IRS ITIN letter, and an Unexpired Government Photo ID (i.e. Driver’s license, International Passport, etc). The following restrictions will apply: • Max DTI is 50%. • Gift funds are allowed, the borrower must contribute at least 5% from their own funds on Primary and Second Home and at least 10% on Investment. Gift funds are not allowed for CLTV above 80% on Investment property. • Power of Attorney are prohibited. • Cash out transactions are not allowed. ITIN borrowers are eligible for the following (see matrix details): • Super Prime • DSCR Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 105

FOREIGN NATIONAL

§13.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01

13.4. FOREIGN NATIONAL A Foreign National is a non-U.S. citizen authorized to live in the U.S. on a temporary basis but does not meet the definition of a Non-Permanent Resident Alien. Foreign National Borrower qualify under Investment Property - DSCR program with foreign national pricing/LTV grid and the Second Home and Investment Property – Full Doc and Asset Utilization. EAD card is not required if visa is active. All purchase transactions in Florida made to foreign principals, persons, and entities must have the signed Buyer’s Affidavit published by the Florida Land Title Association. 13.4.1. VERIFICATION OF RESIDENCY STATUS The visa types considered as Foreign Nationals listed in “Exhibit 1 – VISA. Visa types considered as Foreign Nationals". VISA EXPIRATION REQUIREMENTS Borrower has to have active visa as of the note date or be legally present in the US. Copies of the borrower’s passport and unexpired visa must be obtained. Acceptable alternative documentation to verify visa classification is an I-797 form (Notice of Action) with valid extension dates and an I-94 form (Arrival/Departure Record). Borrowers unable to provide evidence of lawful residency status in the U.S. are not eligible for financing. VISA WAIVER PROGRAM AND CITIZENS OF CANADA OR BERMUDA Borrowers who are residents of countries which participate in the State Department’s Visa Waiver Program (VWP) will not be required to provide a valid visa. Participating countries can be verified through the U.S. Department of State website at https://travel.state.gov/content/travel/en/us- visas/tourism-visit/visa-waiver-program.html Following document required to confirm valid VWP status - Unexpired ESTA Authorization from U.S. Customs Border and Protection https://esta.cbp.dhs.gov/esta/ , if authorization expires in 60 days from the application date updated authorization required to be provided prior to closing. Citizens of Canada and Bermuda do not require ESTA. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 107 13.4.2. CREDIT REQUIREMENTS A U.S. credit report should be obtained for each Foreign National borrower with a valid Social Security number. The credit report should provide merged credit information from the 3 major national credit repositories. For borrowers without a valid Social Security number, an Individual Taxpayer Identification Number (ITIN) is also allowed. A traditional U.S. credit report is not required for borrowers without a valid SSN, however, would be obtained and taken into consideration if exists. Foreign National borrowers who do not have a SSN or ITIN may still proceed under the Foreign National Program. All other program requirements still apply. QUALIFYING U.S. CREDIT The Qualifying U.S. Credit designation refers to non-U.S. citizen borrowers who meet Standard Tradelines or have a minimum of one active tradeline opened for 24 months with no derogatory history. A Qualifying U.S. Credit borrower is eligible for all investment property products and programs reflected on the AD Investment Property Matrix. If non-U.S. citizen borrower has qualifying U.S. Credit the bank reference letter requirement may be waived. QUALIFYING FOREIGN CREDIT If the borrower has at least one U.S. credit score it will be used for qualifying and pricing purposes even if the Qualifying U.S. Credit designation is not met. Bank reference letter must be provided in that case. If the borrower has the foreign credit score, it cannot be used for pricing and eligibility purposes and the loan will be priced as 0 (No Score) in case the borrower does not have the Qualifying U.S. Credit. AD will accept a bank reference letter or other financial institution letter (e.g., mortgage company, credit card company), required for all borrowers who do not meet the Qualifying U.S. Credit design

Mega Capital Funding 23 sections

All Mega Capital Funding credit standards →