DSCR, bank statement loan requirements

Document	Document date	Verified unchanged
mcfunding.com-MVP-DSCR.pdf	2026-08-05 inferred	—

Minimum FICO

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

	DSCR >=1.00
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV1	Cash Out LTV1	Reserves
$1,500,000		660-6792	75%	70%	6 Months
$2,000,000		680+	80%	75%

	DSCR <1.00 – Minimum DSCR is 0.75 & No I/O allowed
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV	Cash Out1 LTV	Reserves
$1,000,000		660-6792	65%	60%	6 Months
$1,500,000		680+	70%	65%

Delayed Financing

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

• The Borrower has been on title for at least six (6) months and has either paid the mortgage for the last six (6) months or can demonstrate a relationship (parent, spouse, domestic partner, sibling, etc.) with the current obligor. • The Borrower has recently inherited or was legally awarded the property (divorce, separation); or • The existing loan is being refinanced, and the title has been held in the name of a natural person or a limited liability company as long as the Borrower was a member of the LLC/Corporation prior to transfer. If there is no lien currently outstanding on the subject property, the transaction will be considered a cash-out refinance.

Subordinate Financing

Not allowed.

Flip Transactions

12-month chain of title to ensure not a flip transaction. Property flipping schemes and other similar type transactions not permitted.

Delayed Financing

Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met. • The original purchase transaction was an arms-length transaction. • The borrower(s) may have initially purchased the property as one of the following: o A natural person; an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust; or o An LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%. • The original purchase transaction is documented by a settlement statement, which confirms that no mortgage financing was used to obtain the subject property. (A recorded trustee's deed (or similar alternative) confirming the amount paid by the grantee to trustee may be substituted for a settlement statement if a settlement statement was not provided to the purchaser at time of sale). The preliminary title search or report must confirm that there are no existing liens on the subject property. • The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property). • If the source of funds used to acquire the property was an unsecured loan or a loan secured by an asset other than the subject property (such as a HELOC secured by another property), the settlement statement for the refinance transaction must reflect that all cash-out proceeds be used to pay off or pay down, as applicable, the loan used to purchase the property. Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan. • The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV ratios for the cash-out transaction based on the current appraised value). • All other cash-out refinance eligibility requirements are met. Cash-out pricing is applicable.

Properties Listed for Sale

Properties listed for sale in the last six (6) months are not eligible for a refinance transaction. This timeframe is measured from the date the property was no longer listed or offered for sale to the application date of the current transaction.

www.mcfunding.com | MVP DSCR Update: 08/05/2026

7

Records

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

Credit Report Details	CREDIT ELIGIBILITY	• A tri-merged-in file credit report from all three repositories is required. • Credit re-scoring is allowed. Follow FNMA.
Credit documents seasoning		Age of documents from Note Date • Credit documents: 120 days • Asset documents: 120 days • Appraisal: 120 days (With re-certification of value: 180 days) • Title report: 90 days
Minimum Credit History		Each Borrower must have an established credit history, and the following must appear on their credit bureau report: • A minimum of three (3) trade lines from traditional credit sources that reported for 24 months or more. • At least one (1) of these must be open and active for the last 12 months. • VOR documented per guidelines can count as a tradeline and • Authorized user accounts will not be considered as a credit reference for establishing this minimum required history, and alternative credit histories not permitted.
Credit Scores		• A minimum of 2 credit scores are required to be provided for each borrower and is used to determine the qualifying credit score for loan approval. The Representative Credit Score for a borrower is the middle score of 3 FICO scores, or the lower score of 2 FICO scores (when only 2 FICO scores are provided). When more than one borrower qualifies for the loan, the qualifying credit score is the lower Representative Credit Score of all borrowers.
Derogatory Credit or Public Records		• Minimum seasoning since Credit Event – 24 months. If there are multiple events, there is a three (3) year seasoning from the date of the last Housing Event. • Housing Event is defined as a Foreclosure, Short Sale, Bankruptcy, Deed in

Credit Report Details

CREDIT ELIGIBILITY

• A tri-merged-in file credit report from all three repositories is required. • Credit re-scoring is allowed. Follow FNMA.

Credit documents seasoning

Age of documents from Note Date • Credit documents: 120 days • Asset documents: 120 days • Appraisal: 120 days (With re-certification of value: 180 days) • Title report: 90 days

Minimum Credit History

Each Borrower must have an established credit history, and the following must appear on their credit bureau report: • A minimum of three (3) trade lines from traditional credit sources that reported for 24 months or more. • At least one (1) of these must be open and active for the last 12 months. • VOR documented per guidelines can count as a tradeline and • Authorized user accounts will not be considered as a credit reference for establishing this minimum required history, and alternative credit histories not permitted.

Credit Scores

• A minimum of 2 credit scores are required to be provided for each borrower and is used to determine the qualifying credit score for loan approval. The Representative Credit Score for a borrower is the middle score of 3 FICO scores, or the lower score of 2 FICO scores (when only 2 FICO scores are provided). When more than one borrower qualifies for the loan, the qualifying credit score is the lower Representative Credit Score of all borrowers.

Derogatory Credit or Public Records

• Minimum seasoning since Credit Event – 24 months. If there are multiple events, there is a three (3) year seasoning from the date of the last Housing Event. • Housing Event is defined as a Foreclosure, Short Sale, Bankruptcy, Deed in

www.mcfunding.com | MVP DSCR Update: 08/05/2026

8

Appraisal Updates

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

PROPERTY
Appraisal	Loan Amount Appraisal Requirement <=$2,000,000 One (1) Full Appraisal and CDA* * Loan amounts <= $2,000,000 require a secondary valuation product. Secondary valuation must be within -10% tolerance of appraised value. Acceptable products are: • CU/LCA scores <=2.5 OR • CDA or Enhanced Desk Review OR • Field Review OR • A 2nd full appraisal - The lower of the two (2) appraisal values will be used to determine LTV, unless the sales price is lower than both appraisals (in which case the sales price will be used to determine loan to value). Appraisals must be completed by two (2) different, independent appraisers. For uniformity and efficiency, all appraisers are required to use appraisal report forms that are acceptable to Fannie Mae/Freddie Mac (form version March 2005). The following appraisal report forms must be used: • Uniform Residential Appraisal Form, FNMA Form 1004; • Small Residential Income Property Appraisal Report, FNMA Form 1025; • Individual Condominium Unit Appraisal Report, FNMA Form 1073; or • Single Family Comparable Rent Schedule, Form 1007 The following items must be contained in the appraisal report: • Certification and Statement of Limiting Conditions, FNMA Form 1004 signed by the appraiser; • A Street map showing the location of the subject property and all comparables used; • An exterior building sketch of the improvements indicating dimensions. A floor plan sketch is required along with calculations demonstrating how the estimate for gross living area is determined. For units in condominium or cooperative projects, interior perimeter unit dimensions are required instead of exterior building dimensions; • Original color photographs or digital color images of the front, street and rear views of the subject property. Original digital black and white photographs/pictures are permitted if the appraisal clearly indicates the subject property meets our standards; • Interior photos of the subject are required, to include; the kitchen, all bathrooms, the main living area, any areas with physical deterioration, and any renovations/improvements; • Any other data as an attachment or addendum to the appraisal report form necessary to provide an adequately supported estimate of market value; • Appraisal report must contain an analysis of all agreements of sale, options or listings for the subject property current as of the effective date of the appraisal, and an analysis of all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal; • Appraisal report must include a completed Sales Comparison Approach section of FNMA form 1004 where there are comparables used with more than one (1) sale or transfer in the 12 months prior to the effective date of the appraisal; • Any unfavorable conditions, such as adverse environmental or economic factors, and how those conditions impact the market value of the property. In those cases, the appraiser’s analysis must reflect and include comparable sales that are similarly affected; and • Meets the Appraiser Independence Requirements
Appraisal Updates	The appraisal must be completed within 120 days of closing. After 120 days, an appraisal update can be utilized in lieu of a new appraisal. When an appraisal report will be more than 120 days old on the date of the note, the appraiser must inspect the exterior of the property and review current market data to

PROPERTY

Appraisal

Loan Amount Appraisal Requirement <=$2,000,000 One (1) Full Appraisal and CDA* * Loan amounts <= $2,000,000 require a secondary valuation product. Secondary valuation must be within -10% tolerance of appraised value. Acceptable products are: • CU/LCA scores <=2.5 OR • CDA or Enhanced Desk Review OR • Field Review OR • A 2nd full appraisal - The lower of the two (2) appraisal values will be used to determine LTV, unless the sales price is lower than both appraisals (in which case the sales price will be used to determine loan to value). Appraisals must be completed by two (2) different, independent appraisers. For uniformity and efficiency, all appraisers are required to use appraisal report forms that are acceptable to Fannie Mae/Freddie Mac (form version March 2005). The following appraisal report forms must be used: • Uniform Residential Appraisal Form, FNMA Form 1004; • Small Residential Income Property Appraisal Report, FNMA Form 1025; • Individual Condominium Unit Appraisal Report, FNMA Form 1073; or • Single Family Comparable Rent Schedule, Form 1007 The following items must be contained in the appraisal report: • Certification and Statement of Limiting Conditions, FNMA Form 1004 signed by the appraiser; • A Street map showing the location of the subject property and all comparables used; • An exterior building sketch of the improvements indicating dimensions. A floor plan sketch is required along with calculations demonstrating how the estimate for gross living area is determined. For units in condominium or cooperative projects, interior perimeter unit dimensions are required instead of exterior building dimensions; • Original color photographs or digital color images of the front, street and rear views of the subject property. Original digital black and white photographs/pictures are permitted if the appraisal clearly indicates the subject property meets our standards; • Interior photos of the subject are required, to include; the kitchen, all bathrooms, the main living area, any areas with physical deterioration, and any renovations/improvements; • Any other data as an attachment or addendum to the appraisal report form necessary to provide an adequately supported estimate of market value; • Appraisal report must contain an analysis of all agreements of sale, options or listings for the subject property current as of the effective date of the appraisal, and an analysis of all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal; • Appraisal report must include a completed Sales Comparison Approach section of FNMA form 1004 where there are comparables used with more than one (1) sale or transfer in the 12 months prior to the effective date of the appraisal; • Any unfavorable conditions, such as adverse environmental or economic factors, and how those conditions impact the market value of the property. In those cases, the appraiser’s analysis must reflect and include comparable sales that are similarly affected; and • Meets the Appraiser Independence Requirements

Appraisal Updates

The appraisal must be completed within 120 days of closing. After 120 days, an appraisal update can be utilized in lieu of a new appraisal. When an appraisal report will be more than 120 days old on the date of the note, the appraiser must inspect the exterior of the property and review current market data to

Loan Amount

Appraisal Requirement

<=$2,000,000

One (1) Full Appraisal and CDA*

Mandatory Country Club Memberships

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

determine whether the property has declined in value since the date of the original appraisal. A new appraisal report is required for any appraisal > 180 days old. This inspection and results of the analysis must be reported on the Appraisal Update and/or Completion Report (Form 1004D), with interior and exterior photos. • If the appraiser indicates on the Form 1004D that the property value has declined, then the Originator must obtain a new appraisal for the property; or • If the appraiser indicates on the Form 1004D that the property value has not declined, then the Originator may proceed with the loan in process without requiring any additional fieldwork.

Property Overview

Most residential use properties are eligible. However, specific risks are factored into loan eligibility standards such as product types, maximum loan to values and required documentation. Atypical improvements are considered, provided marketability has been demonstrated through the appraisal, however, they may not be eligible. All properties must: • Be improved real property; • Be designed and available for year around residential use; • Be complete with kitchen and bathroom facilities; • Contain a minimum of 600 square feet of gross living area; • Be heated by a continuously fueled heat source which is permanently affixed to the real estate. Alternative heat sources are acceptable when marketability has been demonstrated; • Average or better than average condition; • Represent the “highest and best” use of the subject property; • Be free of all health and safety violations; and • NOT be in violation of any housing codes or exhibit items that adversely affect the ownership, habitability or marketability of the subject property.

Transferred Appraisals

• Transferred appraisal report is allowed. Refer MCFI transferred appraisal requirement policy.

Eligible Property Types

• One Unit Single Family Residences (Attached, Detached) • 2-4 Unit Properties • PUDs – Attached and Detached • Townhouses • Warrantable Condo o Must be FNMA warrantable projects. A certification must be provided as well as any other documents used to determine eligibility. • Non-Warrantable Condo • Maximum of 5 acres

Ineligible Properties

• Manufactured Homes • Residential units with >= 5 units • Log Homes • Barndominiums • Commercial properties • Condominium projects with registration services or restrictions on owner’s ability to occupy. • Condominium conversion • Condotels • Cooperatives • Unique Properties • Mixed Use Properties • Builder Model Leaseback • Boarding Houses • Properties w/Environmental Conditions • Fractional Ownership/Timeshares • Assisted Living/Continuing Care Facilities • Mandatory Country Club Memberships • Agricultural zoned properties (may be considered on a case-by-case basis if it is solely for a residential use.)

www.mcfunding.com | MVP DSCR Update: 08/05/2026

16

Heating Systems

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

• Minimum FICO requirement is 680 • 2-4 unit properties • Units < 475 square feet • New projects as defined by FNMA • Houseboat • Condotel • Common Interest Apartments, Tenants-in-Common or Continuity Interest Apartment • Continuing Care Retirement Communities • Projects with Private Transfer Fees • Deed Restricted Communities • Multi-Dwelling/Units (aka lock off units) • Live/Work Condos • Investment Securities Project registered with the SEC • Units with less than full kitchens allowed within the project, but not permitted on the subject property unit. All kitchens must have a minimum 14 cu. Ft refrigerator, 2 burner cooktop, oven and sink

Properties Purchased

Not allowed.

through Auctions

Dampness

If the appraisal report notes evidence of dampness, the appraiser must clearly define the effect on value and marketability of the subject property, as well as comment regarding the probable cause of the dampneness problem and if typically, incurable in the surrounding neighborhood. Generally, a structural engineer’s report is required prior to making a loan decision. The cause of the dampness must be corrected prior to closing must the dampness problem indicate a structural deficiency and/or significant negative impact on value and marketability.

Deferred Maintenance

Property must be in average or better condition. Deferred maintenance may be permissible provided the neglected item is not structural in nature (as noted by the appraiser). Deferred items may be left “as is” if the aggregate cost to correct doesn’t exceed $5,000.

Earthquake Area/Seismic Study Zone

Earthquake insurance is required if the appraisal report or any other document (survey or title work) indicates the subject is located on or in close proximity to a fault or seismic study area. If no mention is made regarding earthquake exposure, insurance must not be required.

Electrical Systems

An electrical certification from a licensed electrician is required whenever the appraisal states a fair or poor rating concerning the adequacy or condition of the system. Any inadequacies must be corrected prior to closing.

Environmental Hazards

The appraisal report must note the existence of known environmental hazards and its effect on value and marketability of the subject property. Properties located adjacent to or containing environmental hazards are ineligible for financing. Environmental hazards include but are not limited to: • Evidence of radon above EPA safety levels which is left untreated; • Properties built on or near toxic waste dumps, clean-up sites, etc.; and • Properties must conform to Fannie Mae/Freddie Mac hazardous substance guidelines when issued.

Foundation Settlement

If the appraisal report notes evidence of excessive settlement, the appraiser must clearly define the effect on value and marketability of the subject property. Settlement problems which denote structural deficiencies and/or significant negative impact on value and marketability must be corrected prior to closing. Generally, a structural engineer’s report is required prior to making a loan decision.

Heating Systems

A central heat source with ductwork or baseboard in all rooms is required on all properties except those in geographic regions where heating is not required. If subject does not have central heat, the appraiser must provide similar comparable properties and an addendum indicating: • The heat source is typical for the area; • The heat source is permanently attached;

www.mcfunding.com | MVP DSCR Update: 08/05/2026

19

Resale Deed Restrictions

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

www.mcfunding.com | MVP DSCR Update: 08/05/2026

21

• Appraiser notates that the age-related deed restriction was considered in the valuation of the property. Note: Age-related deed restrictions generally apply to the unit occupant and frequently require only one occupant to be aged 55 and over. In such a case, the Borrower could be younger than 55 provided there is a unit occupant aged 55 and over. This occupant can be a non-Borrower household member.

Postponed Improvements

Not allowed

or Proposed Construction

Reserves

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

	DSCR >=1.00
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV1	Cash Out LTV1	Reserves
$1,500,000		660-6792	75%	70%	6 Months
$2,000,000		680+	80%	75%

	DSCR <1.00 – Minimum DSCR is 0.75 & No I/O allowed
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV	Cash Out1 LTV	Reserves
$1,000,000		660-6792	65%	60%	6 Months
$1,500,000		680+	70%	65%

Reserves

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

	DSCR >=1.00
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV1	Cash Out LTV1	Reserves
$1,500,000		660-6792	75%	70%	6 Months
$2,000,000		680+	80%	75%

	DSCR <1.00 – Minimum DSCR is 0.75 & No I/O allowed
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV	Cash Out1 LTV	Reserves
$1,000,000		660-6792	65%	60%	6 Months
$1,500,000		680+	70%	65%

Manual Underwriting Only

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

	DSCR >=1.00
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV1	Cash Out LTV1	Reserves
$1,500,000		660-6792	75%	70%	6 Months
$2,000,000		680+	80%	75%

	DSCR <1.00 – Minimum DSCR is 0.75 & No I/O allowed
Maximum Loan Amount		Credit Score	Purchase/Rate & Term LTV	Cash Out1 LTV	Reserves
$1,000,000		660-6792	65%	60%	6 Months
$1,500,000		680+	70%	65%

Permanent Resident Alien

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

DSCR

Minimum DSCR – 0.75

Approved States

All MCFI approved states except Baltimore, Maryland (This restriction applies to the subject property only if it is located in Baltimore City, MD.), Mississippi, North Dakota, Pennsylvania (Philadelphia County only), South Dakota, Tennessee, Vermont

MLO State Licensing Exemption

The following states will allow for the origination of DSCR loans without a license: Alabama Arkansas Colorado Connecticut Delaware District of Florida* Georgia* Columbia Hawaii Indiana Kentucky Louisiana Maine Maryland** Massachusetts Michigan Missouri Montana Nebraska New Hampshire Ohio Oklahoma Pennsylvania** Rhode Island South Carolina Texas Washington West Virginia Wisconsin Wyoming *Title must be held by an LLC. Individuals are prohibited. ** Maryland (Not allowed in Baltimore City, MD.), Pennsylvania (Not allowed in Philadelphia County)

ARM Index

SOFR 30 Day Avg index

ARM term

TERMS 5/6 ARM

CAPS

INDEX

MARGIN

2/1/5

SOFR

See Rate sheet

Max. Cash-Out Limits

• $1M • Cash-out proceeds can be used for the reserves.

Prepayment Penalty

o Hard prepayment periods up to 5 years eligible- see rate sheet. o Please refer to the Prepayment Penalty Guide for state specific restrictions and requirements Prepayment penalty is a flat structure: up to 5 year prepayment term at a 5% flat rate. If within the loan term’s prepayment period from the date the Security Instrument is executed, a full or one or more partial prepayments, the prepayment charge will be an amount equal to the flat rate based on the principal amount so prepaid.

o Un-expired Foreign Passport with an unexpired stamp reading as follows: “Processed for I-551 Temporary Evidence of Lawful Admission for Permanent Residence. Valid until mm-dd-yy. Employment Authorized.”

Non-Permanent Resident Aliens

• Non-Permanent Resident Aliens are eligible. A Non-Permanent Resident Alien is someone who is: o Not a United States (U.S.) citizen; o Granted the right to live and work in the U.S. on a temporary basis; and o A lawful non-permanent resident of the U.S. (Visa Holder). • If the Borrower is a Non-Permanent Resident Alien, the file must contain evidence of lawful residency. Borrowers who are Non-Permanent Resident Aliens and provide evidence of lawful residency are eligible for financing with the same terms as U.S. Citizens. • A borrower with an expired, but otherwise acceptable Visa type, is permitted with supporting documentation. For example, supporting documentation includes, but is not limited to, any of the following: o Form I-797 which is issued when an application or petition is approved; o Form I-797C or I-797E which must not state that the application has been declined; o Application for extension of current visa I-539 (or equivalent) or copy of application for green card I-485 (or equivalent) and electronic verification of receipt from the USCIS web site; o If the borrower is sponsored by the employer, the employer may verify that they are sponsoring the Visa renewal; o In lieu of a Visa, an Unexpired Employment Authorization Document (EAD), or I-94 or I-797; and a letter from the employer or a verification of employment reflecting continuance is likely are required; o Deferred Action for Childhood Arrivals (DACA) approval.

First Time Homebuyer

A “First-Time Homebuyer” is defined as a Borrower who had no ownership interest in a residential property in the United States during the preceding three (3) year period. A First-Time Homebuyer is not permitted. For clarification, a borrower who currently owns a home free and clear is not considered a First-Time Homebuyer.

First Time Investor

Allowed. No restriction.

Interested Parties

All parties involved on each transaction must be screened through an exclusionary list.

Eligible Vesting

Fee Simple with Title Vesting as: • Individual • Joint Tenants • Inter-Vivos Revocable Trust Vesting is allowed in an Entity with the following requirements: • Entity must be domiciled in a U.S. State. • Business structure is limited to a maximum of four (4) owners/ members. • Personal Guarantees must be provided by all owners/members of the Entity on the loan - If not signing not as member but as an individual, Guaranty is not needed. If signing only as member, personal guaranty needed. • Each Entity owner / member on the loan must sign the security instruments. • Each Entity owner / member providing a Personal Guaranty must complete a Form 1003 or similar credit application indicating clearly that such document is being provided in the capacity of the guarantor. The application of each member/owner providing a Personal Guaranty and their credit score, and creditworthiness will also be used to determine qualification and pricing. NOTE: Vesting in a life estate is not allowed. For business type, the following documentation must be provided: • Limited Liability Company (LLC) o Entity Articles of Organization, Partnership, and Operating Agreements if any

Inter-Vivos Revocable Trust

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

o Un-expired Foreign Passport with an unexpired stamp reading as follows: “Processed for I-551 Temporary Evidence of Lawful Admission for Permanent Residence. Valid until mm-dd-yy. Employment Authorized.”

Non-Permanent Resident Aliens

• Non-Permanent Resident Aliens are eligible. A Non-Permanent Resident Alien is someone who is: o Not a United States (U.S.) citizen; o Granted the right to live and work in the U.S. on a temporary basis; and o A lawful non-permanent resident of the U.S. (Visa Holder). • If the Borrower is a Non-Permanent Resident Alien, the file must contain evidence of lawful residency. Borrowers who are Non-Permanent Resident Aliens and provide evidence of lawful residency are eligible for financing with the same terms as U.S. Citizens. • A borrower with an expired, but otherwise acceptable Visa type, is permitted with supporting documentation. For example, supporting documentation includes, but is not limited to, any of the following: o Form I-797 which is issued when an application or petition is approved; o Form I-797C or I-797E which must not state that the application has been declined; o Application for extension of current visa I-539 (or equivalent) or copy of application for green card I-485 (or equivalent) and electronic verification of receipt from the USCIS web site; o If the borrower is sponsored by the employer, the employer may verify that they are sponsoring the Visa renewal; o In lieu of a Visa, an Unexpired Employment Authorization Document (EAD), or I-94 or I-797; and a letter from the employer or a verification of employment reflecting continuance is likely are required; o Deferred Action for Childhood Arrivals (DACA) approval.

First Time Homebuyer

A “First-Time Homebuyer” is defined as a Borrower who had no ownership interest in a residential property in the United States during the preceding three (3) year period. A First-Time Homebuyer is not permitted. For clarification, a borrower who currently owns a home free and clear is not considered a First-Time Homebuyer.

First Time Investor

Allowed. No restriction.

Interested Parties

All parties involved on each transaction must be screened through an exclusionary list.

Eligible Vesting

Fee Simple with Title Vesting as: • Individual • Joint Tenants • Inter-Vivos Revocable Trust Vesting is allowed in an Entity with the following requirements: • Entity must be domiciled in a U.S. State. • Business structure is limited to a maximum of four (4) owners/ members. • Personal Guarantees must be provided by all owners/members of the Entity on the loan - If not signing not as member but as an individual, Guaranty is not needed. If signing only as member, personal guaranty needed. • Each Entity owner / member on the loan must sign the security instruments. • Each Entity owner / member providing a Personal Guaranty must complete a Form 1003 or similar credit application indicating clearly that such document is being provided in the capacity of the guarantor. The application of each member/owner providing a Personal Guaranty and their credit score, and creditworthiness will also be used to determine qualification and pricing. NOTE: Vesting in a life estate is not allowed. For business type, the following documentation must be provided: • Limited Liability Company (LLC) o Entity Articles of Organization, Partnership, and Operating Agreements if any

www.mcfunding.com | MVP DSCR Update: 08/05/2026

4

Cash-Out

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

	TRANSACTION ELIGIBILITY
Purchase		• A purchase transaction is one which allows a buyer to acquire a property from a seller where the proceeds of the transaction are used to finance the acquisition of the Subject property. • A copy of the fully executed purchase contract and all attachments or addenda is required. • For purposes of calculating the LTV, the property value is defined as the lesser of the purchase price or appraised value of the mortgaged premises. • The seller must be on title for a minimum of 90 days, excluding new construction (From the date the seller takes title to date sales contract executed); • 12-month chain of title to ensure not a flip transaction. Property flipping schemes and other similar types of transactions not permitted.
Rate & Term		• Existing first mortgage payoff, closing costs, fees, and any prepaid items. • Any subordinate financing which was used to acquire the subject property. • Any subordinate financing that was not used to purchase the subject property provided: o For closed end seconds, the loan is at least one (1) year seasoned as determined by the time between the note date of the subordinate lien and the application date of the new mortgage, or o For HELOCs and other open-ended lines of credit, the loan is at least one (1) year seasoned and there have been less than $2,000 in total draws over the past 12 months; and o Cash to Borrower no greater than $5,000. • Refinance to buy out an owner’s interest is permitted and should follow FNMA guidance.
Cash-Out		A cash-out refinance involves a refinance that does not meet the rate term refinance definition. Typically, this would include a refinance where the Borrower received more than $5,000 cash from the transaction or when an open-ended subordinate lien that does not meet the rate-term requirements is paid off. Cash-Out Refinances are permitted with the following requirements: • A minimum of six (6) months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). This timeframe is measured from the note date of the previous transaction to the note date of the current transaction. • A mortgage placed on a property previously owned free and clear by the Borrower is always considered a cash-out refinance mortgage; and • The maximum amount of cash out for a cash-out refinance transaction is $1,000,000.
Continuity of Obligation		For a refinance transaction (either rate and term/limited cash-out or cash-out), there must be a continuity of obligation if there is currently an outstanding lien that will be satisfied through the refinance transaction. An acceptable Continuity of Obligation exists when any of the following exist: • There is at least one (1) Borrower obligated on the new loan who was also a Borrower is obligated on the existing loan that is being refinanced.

TRANSACTION ELIGIBILITY

Purchase

• A purchase transaction is one which allows a buyer to acquire a property from a seller where the proceeds of the transaction are used to finance the acquisition of the Subject property. • A copy of the fully executed purchase contract and all attachments or addenda is required. • For purposes of calculating the LTV, the property value is defined as the lesser of the purchase price or appraised value of the mortgaged premises. • The seller must be on title for a minimum of 90 days, excluding new construction (From the date the seller takes title to date sales contract executed); • 12-month chain of title to ensure not a flip transaction. Property flipping schemes and other similar types of transactions not permitted.

Rate & Term

• Existing first mortgage payoff, closing costs, fees, and any prepaid items. • Any subordinate financing which was used to acquire the subject property. • Any subordinate financing that was not used to purchase the subject property provided: o For closed end seconds, the loan is at least one (1) year seasoned as determined by the time between the note date of the subordinate lien and the application date of the new mortgage, or o For HELOCs and other open-ended lines of credit, the loan is at least one (1) year seasoned and there have been less than $2,000 in total draws over the past 12 months; and o Cash to Borrower no greater than $5,000. • Refinance to buy out an owner’s interest is permitted and should follow FNMA guidance.

Cash-Out

A cash-out refinance involves a refinance that does not meet the rate term refinance definition. Typically, this would include a refinance where the Borrower received more than $5,000 cash from the transaction or when an open-ended subordinate lien that does not meet the rate-term requirements is paid off. Cash-Out Refinances are permitted with the following requirements: • A minimum of six (6) months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). This timeframe is measured from the note date of the previous transaction to the note date of the current transaction. • A mortgage placed on a property previously owned free and clear by the Borrower is always considered a cash-out refinance mortgage; and • The maximum amount of cash out for a cash-out refinance transaction is $1,000,000.

Continuity of Obligation

For a refinance transaction (either rate and term/limited cash-out or cash-out), there must be a continuity of obligation if there is currently an outstanding lien that will be satisfied through the refinance transaction. An acceptable Continuity of Obligation exists when any of the following exist: • There is at least one (1) Borrower obligated on the new loan who was also a Borrower is obligated on the existing loan that is being refinanced.

• The Borrower has been on title for at least six (6) months and has either paid the mortgage for the last six (6) months or can demonstrate a relationship (parent, spouse, domestic partner, sibling, etc.) with the current obligor. • The Borrower has recently inherited or was legally awarded the property (divorce, separation); or • The existing loan is being refinanced, and the title has been held in the name of a natural person or a limited liability company as long as the Borrower was a member of the LLC/Corporation prior to transfer. If there is no lien currently outstanding on the subject property, the transaction will be considered a cash-out refinance.

Subordinate Financing

Not allowed.

Flip Transactions

12-month chain of title to ensure not a flip transaction. Property flipping schemes and other similar type transactions not permitted.

Delayed Financing

Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met. • The original purchase transaction was an arms-length transaction. • The borrower(s) may have initially purchased the property as one of the following: o A natural person; an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust; or o An LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%. • The original purchase transaction is documented by a settlement statement, which confirms that no mortgage financing was used to obtain the subject property. (A recorded trustee's deed (or similar alternative) confirming the amount paid by the grantee to trustee may be substituted for a settlement statement if a settlement statement was not provided to the purchaser at time of sale). The preliminary title search or report must confirm that there are no existing liens on the subject property. • The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property). • If the source of funds used to acquire the property was an unsecured loan or a loan secured by an asset other than the subject property (such as a HELOC secured by another property), the settlement statement for the refinance transaction must reflect that all cash-out proceeds be used to pay off or pay down, as applicable, the loan used to purchase the property. Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan. • The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV ratios for the cash-out transaction based on the current appraised value). • All other cash-out refinance eligibility requirements are met. Cash-out pricing is applicable.

Properties Listed for Sale

Properties listed for sale in the last six (6) months are not eligible for a refinance transaction. This timeframe is measured from the date the property was no longer listed or offered for sale to the application date of the current transaction.

History

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

Lieu, Loan Modification, Forbearance, Notice of Default, or 120+ Days Delinquent • Defaulted first and second on the same property is considered one event. • Housing Events that occur on the same property are considered single housing event. • Multiple Events occur when two (2) or more separate properties have credit events within a three (3) year period. For example, Borrower’s primary residence goes into Foreclosure, as well as his or her investment property. • Events include all occupancy types – Primary, 2nd Home & Investment Properties • Seasoning look back is from the date of discharge or property resolution (completion date), as of the note date • Foreclosures included in bankruptcy permitted based on BK discharge date if the borrower has vacated the property; and • Foreclosure, Short Sale, Deed in Lieu, and Loan Modification must be settled at closing time.

Major Adverse/Derogatory Credit – Collections, Charge-offs, Judgments, Liens

• All delinquent credit that will impact title – including delinquent taxes, judgments, charge-off accounts, tax liens and mechanics’ lines – must be paid off prior to or at closing. Title must insure the lien position without exception. Any item secured against the subject must be paid in full. • However, non-medical collection accounts, charged-off accounts and judgments that do not impact title are not required to be paid off if the total of all derogatory accounts is $5,000 or less. When the total exceeds $5,000, all must be paid in their entirety and all past due accounts brought current.

Delinquent Credit belonging to Ex-spouse

Delinquent credit which belongs to an ex-spouse may be excluded from the credit evaluation when all the following apply: • File contains a copy of the divorce decree or separation agreement which shows the derogatory accounts belong solely to the ex-spouse; • Late payments that have occurred after the date of the divorce or separation; and • If debt in question is a mortgage, evidence of title transfer prior to any delinquent debt must be provided and evidence of “buyout” as part of court proceedings.

Delinquent Credit

A Co-signer is considered a Borrower on the loan, and therefore delinquent credit that belongs to a cosigner must be considered when evaluating the loan.

Belonging to Co-signer

Written Explanations

A written explanation is required for significant derogatory information. The purpose for requiring a written explanation is to assist MCFI in determining whether the Borrower's credit problems were due to extenuating circumstances (factors clearly beyond the control of the Borrower) or whether they reflect financial mismanagement (the Borrower's disregard for the payment of obligations when due). In order to accomplish this purpose, it may be necessary to allow someone to assist the Borrower in preparing the explanation. A written explanation in and of itself does not satisfy MCFI’s responsibility to determine the Borrower's willingness to repay. When adverse or derogatory information is considered significant, MCFI must relate the reasons for the late payments, as stated by the Borrower, to the other information about the Borrower's credit history contained in the Mortgage file. MCFI must reasonably be able to conclude that: • The explanation is consistent with the adverse information reported and the other information in the Mortgage file; • The explanation establishes a credible cause for the late payments; and • The Borrower represents an acceptable credit risk and exhibits the ability and willingness to repay the Mortgage.

Inquiries

If the credit report indicated that a creditor has made inquiries within the previous 90 day period, the underwriter must determine whether additional credit was granted as a result of the Borrower’s request. A letter from the creditor or letter of explanation from the Borrower is required for all inquiries inside this time period.

Mortgage/Rental Payment History

The Borrower’s previous housing payment history is required. The file must contain verification of the Borrower’s 12-month payment history on the primary residence, and any mortgage loans on a Second/Vacation Home or Investment Property.

www.mcfunding.com | MVP DSCR Update: 08/05/2026

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DSCR Qualification

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

www.mcfunding.com | MVP DSCR Update: 08/05/2026

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DSCR = Gross Rental Income ÷ PITIA* of the proposed new loan. If the subject transaction is an Interest Only loan, divide the Gross Rental Income by the ITIA (i.e. Interest only payment plus taxes, insurance, and HOA dues). PITIA or ITIA is based on the Note Rate of the loan for Fixed Rate loans. For ARM loans, see Qualifying rate. Rounding DSCR: Rounding up of the DSCR value is permissible from the 3rd decimal. Income Calculation • Tenant Occupied: Use the lower of the (a) executed lease agreement or (b) market rent from appraisal (form 1007or 1025); or o Determined by fully executed lease in file with tenants currently occupied or will occupy within 30 days of the Note date, month to month lease also permitted. o If current rents are more than market rents, 120% of market rents can be used with 2 months proof of rental income receipt, but the income cannot exceed actual current rents • Non-Tenant Occupied: The market rent from the appraisal (form 1007) may be used solely. • Short Term Rental income - The following requirements apply to short-term rentals such as Airbnb or VRBO: Max loan size: $2,000,000 o Mortgage refinancing only (no purchase transactions) o Minimum 12-month rental history o DSCR would be calculated based on average actual rental income calculated over 12 months. No market rents are used in calculations. o 3rd-party verification must confirm that short-term rental (STR) use is legally permissible under applicable local regulations and that all required licenses are in place. For properties utilizing STR income, a current and valid STR permit must be obtained and retained. o Rent loss coverage is not required • Appraisal must reflect that the zoning compliance is legal (permits are not required to establish zoning compliance), • Rents from existing ADU permitted. • Business assets held in the same vesting entity name as subject loan, do not require a CPA letter. • Multiple accessory units are not permitted. • Purchase: Use the lesser of the market rent on Form 1007 or the lease agreement (If rented). • Refinance: Use the market rent on Form 1007 or 1025 if vacant. Note: Borrowers on Investor loan programs must sign The Business Purpose and Occupancy Affidavit attests to the following for a loan to be considered an Investor Loan. • No borrowers or borrowers’ relatives (direct or by marriage) will occupy the subject property. • Ownership of the subject property is for business purposes only. • Any loan where Cash Out proceeds would be utilized for personal use will not be eligible for DSCR program. • Form 1007 or 1025 Schedule of Rents are required for all DSCR loans.

Employment Verification

• Borrower/Guarantors do not have to provide adequate employment verification for the DSCR Program.

Rent Loss Insurance

• Rent loss insurance for the subject property is required and must equal at least six (6) months of local average monthly rents. • Blanket policies covering the subject property are permitted.

Recourse/Guarantee

• Personal recourse required for the business entity vesting only. • All Borrower(s) should execute the MCFI Personal Guaranty Agreement.

Assignment of Rent

• 1-4 Family Rider/Assignment of Rents must be in origination file (FNMA Form 3170)

Recourse/Guarantee

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

DSCR = Gross Rental Income ÷ PITIA* of the proposed new loan. If the subject transaction is an Interest Only loan, divide the Gross Rental Income by the ITIA (i.e. Interest only payment plus taxes, insurance, and HOA dues). PITIA or ITIA is based on the Note Rate of the loan for Fixed Rate loans. For ARM loans, see Qualifying rate. Rounding DSCR: Rounding up of the DSCR value is permissible from the 3rd decimal. Income Calculation • Tenant Occupied: Use the lower of the (a) executed lease agreement or (b) market rent from appraisal (form 1007or 1025); or o Determined by fully executed lease in file with tenants currently occupied or will occupy within 30 days of the Note date, month to month lease also permitted. o If current rents are more than market rents, 120% of market rents can be used with 2 months proof of rental income receipt, but the income cannot exceed actual current rents • Non-Tenant Occupied: The market rent from the appraisal (form 1007) may be used solely. • Short Term Rental income - The following requirements apply to short-term rentals such as Airbnb or VRBO: Max loan size: $2,000,000 o Mortgage refinancing only (no purchase transactions) o Minimum 12-month rental history o DSCR would be calculated based on average actual rental income calculated over 12 months. No market rents are used in calculations. o 3rd-party verification must confirm that short-term rental (STR) use is legally permissible under applicable local regulations and that all required licenses are in place. For properties utilizing STR income, a current and valid STR permit must be obtained and retained. o Rent loss coverage is not required • Appraisal must reflect that the zoning compliance is legal (permits are not required to establish zoning compliance), • Rents from existing ADU permitted. • Business assets held in the same vesting entity name as subject loan, do not require a CPA letter. • Multiple accessory units are not permitted. • Purchase: Use the lesser of the market rent on Form 1007 or the lease agreement (If rented). • Refinance: Use the market rent on Form 1007 or 1025 if vacant. Note: Borrowers on Investor loan programs must sign The Business Purpose and Occupancy Affidavit attests to the following for a loan to be considered an Investor Loan. • No borrowers or borrowers’ relatives (direct or by marriage) will occupy the subject property. • Ownership of the subject property is for business purposes only. • Any loan where Cash Out proceeds would be utilized for personal use will not be eligible for DSCR program. • Form 1007 or 1025 Schedule of Rents are required for all DSCR loans.

Employment Verification

• Borrower/Guarantors do not have to provide adequate employment verification for the DSCR Program.

Rent Loss Insurance

• Rent loss insurance for the subject property is required and must equal at least six (6) months of local average monthly rents. • Blanket policies covering the subject property are permitted.

Recourse/Guarantee

• Personal recourse required for the business entity vesting only. • All Borrower(s) should execute the MCFI Personal Guaranty Agreement.

Assignment of Rent

• 1-4 Family Rider/Assignment of Rents must be in origination file (FNMA Form 3170)

www.mcfunding.com | MVP DSCR Update: 08/05/2026

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Acceptable Funds

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

ASSETS
Asset Documentation	Assets must be sourced/seasoned for one month and may be verified using: • Direct written verification, completed by the depository; or • Recent and consecutive account statements covering a period of one (1) month for each bank, brokerage, mutual fund account or investment portfolio. Account statements must provide all of the following information: o Borrower as the account holder; o Account number; o Time period covered; o Current balance in US Dollars ($); and o Statement date.
Age of Asset Documentation	The verification of assets (including the source of funds) may not be greater than 120 days old at the time of closing. If funds are required for closing, then the most recent account statement (s) at the time of closing will be required for validation of funds.
Acceptable Funds	• Funds from a Borrower’s checking account, savings account, money market or certificate of deposit held at a financial institution or brokerage. • Gift funds which do not have to be repaid may be permitted for down payment only. 5% on LTV’s <= 80% or 10% on LTV’s <70% • Proceeds from the sale of the Borrower’s personal asset(s). Value of assets must be verified; provide evidence of sale (i.e., bill of sale, copy of check, etc.). • Proceeds from a loan which is secured by a Borrower’s personal asset. For example, loans secured by other real estate are acceptable. Terms of the loan must be verified. • Proceeds from a loan secured by a financial asset (such as 401(k), or mutual fund) may be used. Documentation must be provided verifying the asset, the withdrawal, and the Borrower’s receipt of funds. • Proceeds from liquidated stock, retirement accounts, certificates of deposit, pension or other savings plan. Note: “Penny” stocks are not considered liquid. Ownership of the account must be verified along with Borrower’s actual receipt of funds. • Proceeds from sale of other real estate. If part of the down payment is expected to be paid from the sale of the Borrower’s current home, an executed closing statement verifying sufficient net proceeds must be received with the closing package. • Funds from a business account (if the Borrower is the sole owner (or other owner is non-borrowing spouse) of the company and the company’s CPA provides a statement indicating withdrawal of the funds will not negatively impact the business OR meet FNMA guidance for cash flow analysis) may be used for down payment and reserves. • Any payment received as a result of being a party to the sales transaction (i.e., real estate sales commission) after Borrower has met the minimum down payment requirement. • Checking and Savings (100%) • Certificates of Deposit (100%) • U.S. Savings Bonds (100% if fully matured, otherwise 80%) • Marketable Securities (100% net of margin debt). Marketable Securities are defined as legitimate stocks, bonds or mutual funds that are publicly traded. • IRA, Keogh, and 401(K) Retirement Accounts (60 % of vested balance after deducting outstanding loans secured against it) including ROTH. Account statements should be updated with a transaction history dated within 30 days of note date due to market volatility. Confirm the account is vested and allows withdrawals regardless of current employment status. If the borrower is of retirement age, 100% of funds may be used for reserves. • Trust Accounts (100%). Must review a copy of the full Trust. • Life Insurance cash value

ASSETS

Asset Documentation

Assets must be sourced/seasoned for one month and may be verified using: • Direct written verification, completed by the depository; or • Recent and consecutive account statements covering a period of one (1) month for each bank, brokerage, mutual fund account or investment portfolio. Account statements must provide all of the following information: o Borrower as the account holder; o Account number; o Time period covered; o Current balance in US Dollars ($); and o Statement date.

Age of Asset Documentation

The verification of assets (including the source of funds) may not be greater than 120 days old at the time of closing. If funds are required for closing, then the most recent account statement (s) at the time of closing will be required for validation of funds.

Acceptable Funds

• Funds from a Borrower’s checking account, savings account, money market or certificate of deposit held at a financial institution or brokerage. • Gift funds which do not have to be repaid may be permitted for down payment only. 5% on LTV’s <= 80% or 10% on LTV’s <70% • Proceeds from the sale of the Borrower’s personal asset(s). Value of assets must be verified; provide evidence of sale (i.e., bill of sale, copy of check, etc.). • Proceeds from a loan which is secured by a Borrower’s personal asset. For example, loans secured by other real estate are acceptable. Terms of the loan must be verified. • Proceeds from a loan secured by a financial asset (such as 401(k), or mutual fund) may be used. Documentation must be provided verifying the asset, the withdrawal, and the Borrower’s receipt of funds. • Proceeds from liquidated stock, retirement accounts, certificates of deposit, pension or other savings plan. Note: “Penny” stocks are not considered liquid. Ownership of the account must be verified along with Borrower’s actual receipt of funds. • Proceeds from sale of other real estate. If part of the down payment is expected to be paid from the sale of the Borrower’s current home, an executed closing statement verifying sufficient net proceeds must be received with the closing package. • Funds from a business account (if the Borrower is the sole owner (or other owner is non-borrowing spouse) of the company and the company’s CPA provides a statement indicating withdrawal of the funds will not negatively impact the business OR meet FNMA guidance for cash flow analysis) may be used for down payment and reserves. • Any payment received as a result of being a party to the sales transaction (i.e., real estate sales commission) after Borrower has met the minimum down payment requirement. • Checking and Savings (100%) • Certificates of Deposit (100%) • U.S. Savings Bonds (100% if fully matured, otherwise 80%) • Marketable Securities (100% net of margin debt). Marketable Securities are defined as legitimate stocks, bonds or mutual funds that are publicly traded. • IRA, Keogh, and 401(K) Retirement Accounts (60 % of vested balance after deducting outstanding loans secured against it) including ROTH. Account statements should be updated with a transaction history dated within 30 days of note date due to market volatility. Confirm the account is vested and allows withdrawals regardless of current employment status. If the borrower is of retirement age, 100% of funds may be used for reserves. • Trust Accounts (100%). Must review a copy of the full Trust. • Life Insurance cash value

Life insurance policy current cash value or loan against the cash value may be used for down payment, closing costs or reserves. The Borrower must be the owner of the policy and not the beneficiary • Foreign Assets Foreign assets are acceptable and must be thirty (30) days seasoned with one (1) most recent bank statement. A currency calculation must be provided. The funds must be transferred to US Financial Institution. Assets from countries under OFAC sanctions are not permitted.

Unacceptable Funds

• Gift funds which must be repaid in full or in part; • Cash-on-hand; • Labor performed by the Borrower or goods or materials provided by the Borrower (sweat equity); or • Gifts from seller-funded programs • Shared appreciation second liens • Crypto Currencies • Gift of Equity • Builder profits are not allowed • Rent credits not permitted • Unsecured loans

Large Deposits

• Any large deposit not consistent with the Borrower’s employment, earnings or savings profile must be fully explained and sourced with acceptable documentation in order to be eligible for down payment, closing costs, earnest money deposit and reserves. A large deposit is considered to be any amount greater than five (5) % of the loan amount. • A signed letter of explanation from the Borrower is required in these instances and must sufficiently explain and source the funds. All funds used for these purposes must be from an acceptable source and clearly not the result of undisclosed Borrower funds, debt, or an incentive from an interested party such as a seller, real estate agent or developer.

Joint Accounts

• Funds held jointly with a non-borrowing spouse are considered the Borrower’s funds. Funds held jointly with any other non-borrowing person may be considered if joint account holder is also a title holder on the subject property or a written verification of deposit or an access letter is provided showing the Borrower has authorized access to all funds as though they solely belong to the Borrower.

IRS 1031 Exchange

• Assets for the down payment from a “like-kind exchange,” also known as a 1031 exchange, are eligible if properly documented and in compliance with Internal Revenue Code Section 1031. This asset cannot be used to meet the reserve requirement.

Reserves

• 6 months’ PITIA reserves on the subject property documented with 30 days bank statements. • Cash-out proceeds can be used for the reserves. • No gift funds are allowed. • 1031 Exchange funds are not eligible for reserves.

Gift Funds

• Gift Funds are allowed for purchase transactions only and cannot be used for reserves (only for down payment/closing costs). • Gifts must be from a family member. • Maximum Gift funds permitted for down payment – Max. 5% on LTV’s <= 80% or Max. 10% on LTV’s <70%

Interested Party Contributions / Seller Concessions

Financing concessions are considered to be funds originating from an interested party to pay closing costs on a purchase transaction. Allowable financing concessions include any of the following: • Permanently reduce the interest rate on the mortgage; • Make contributions related to the mortgage financing charges which traditionally would be paid by the Borrower, including but not limited to the payment of discount points, loan fees, commitment fees and/or origination fees, property taxes, and insurance escrows;

Concessions

mcfunding.com-MVP-DSCR.pdf · 2026-08-05

Life insurance policy current cash value or loan against the cash value may be used for down payment, closing costs or reserves. The Borrower must be the owner of the policy and not the beneficiary • Foreign Assets Foreign assets are acceptable and must be thirty (30) days seasoned with one (1) most recent bank statement. A currency calculation must be provided. The funds must be transferred to US Financial Institution. Assets from countries under OFAC sanctions are not permitted.

Unacceptable Funds

• Gift funds which must be repaid in full or in part; • Cash-on-hand; • Labor performed by the Borrower or goods or materials provided by the Borrower (sweat equity); or • Gifts from seller-funded programs • Shared appreciation second liens • Crypto Currencies • Gift of Equity • Builder profits are not allowed • Rent credits not permitted • Unsecured loans

Large Deposits

• Any large deposit not consistent with the Borrower’s employment, earnings or savings profile must be fully explained and sourced with acceptable documentation in order to be eligible for down payment, closing costs, earnest money deposit and reserves. A large deposit is considered to be any amount greater than five (5) % of the loan amount. • A signed letter of explanation from the Borrower is required in these instances and must sufficiently explain and source the funds. All funds used for these purposes must be from an acceptable source and clearly not the result of undisclosed Borrower funds, debt, or an incentive from an interested party such as a seller, real estate agent or developer.

Joint Accounts

• Funds held jointly with a non-borrowing spouse are considered the Borrower’s funds. Funds held jointly with any other non-borrowing person may be considered if joint account holder is also a title holder on the subject property or a written verification of deposit or an access letter is provided showing the Borrower has authorized access to all funds as though they solely belong to the Borrower.

IRS 1031 Exchange

• Assets for the down payment from a “like-kind exchange,” also known as a 1031 exchange, are eligible if properly documented and in compliance with Internal Revenue Code Section 1031. This asset cannot be used to meet the reserve requirement.

Reserves

• 6 months’ PITIA reserves on the subject property documented with 30 days bank statements. • Cash-out proceeds can be used for the reserves. • No gift funds are allowed. • 1031 Exchange funds are not eligible for reserves.

Gift Funds

• Gift Funds are allowed for purchase transactions only and cannot be used for reserves (only for down payment/closing costs). • Gifts must be from a family member. • Maximum Gift funds permitted for down payment – Max. 5% on LTV’s <= 80% or Max. 10% on LTV’s <70%

Interested Party Contributions / Seller Concessions

Financing concessions are considered to be funds originating from an interested party to pay closing costs on a purchase transaction. Allowable financing concessions include any of the following: • Permanently reduce the interest rate on the mortgage; • Make contributions related to the mortgage financing charges which traditionally would be paid by the Borrower, including but not limited to the payment of discount points, loan fees, commitment fees and/or origination fees, property taxes, and insurance escrows;

www.mcfunding.com | MVP DSCR Update: 08/05/2026

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Mega Capital Funding

Source documents

Criteria tables

Minimum FICO

Delayed Financing

Records

Appraisal Updates

Mandatory Country Club Memberships

Heating Systems

Resale Deed Restrictions

Reserves

Reserves

Manual Underwriting Only

Permanent Resident Alien

Inter-Vivos Revocable Trust

Cash-Out

History

DSCR Qualification

Recourse/Guarantee

Acceptable Funds

Concessions