You get the quote on a Tuesday. A rate, a loan-to-value, a minimum ratio that looks easy to clear. Nothing in it is false. Six weeks later the terms that show up at closing are not the terms in that email — and no one lied to you.

Two lenders published documents this summer that explain exactly why. One publishes a marketing page advertising a minimum DSCR of 0.8, with a little dagger next to it, and says nothing at all about cash reserves. The other publishes its underwriting matrix — and that matrix says a loan below 1.00 triggers a pricing adjustment, a lower maximum LTV, a higher minimum credit score, a $3 million ceiling, the loss of a landlord-history waiver, and six additional months of reserves. Same product. Same month. Two completely different documents.

The number in the quote was never the rule. It was the advertisement.

Host Martin Maxwell reads both documents side by side and shows exactly where a quote turns into terms — the appraisal, the occupancy box, the declining-market checkbox, and the one line item that changes your ratio without changing a single thing about the property.

In this episode:

• The dagger — why the ratio on a marketing page carries a footnote and no reserve requirement, while the underwriting matrix carries six separate consequences for the same number
• The reserve tiers nobody quotes — six, nine, twelve or eighteen months depending on loan size, plus six more if your ratio slips under 1.00
• The lesser-of trap — how an appraisal below contract price silently moves you into a worse LTV tier before you have done anything wrong
• The denominator swap — how interest-only changes your ratio by a wide margin with zero change to the rent, the price, or the property
• The eligibility lines — declining market, vacant-without-renovation, non-conforming space, and the three-comparable test that decides whether a basement unit counts at all

One thing worth saying plainly: a DSCR loan counts gross rent at 100%, against the 75% factor conventional lending applies to rental income. That difference is most of the reason the product exists. The advantages and the consequences live in the same document — you have usually only been shown the advantages.

Before your next term sheet, ask the broker for the eligibility matrix, the reserve tier for your loan size, and the pricing adjustment grid. Then read them before the appraisal is ordered — and run the deal at the rate you can actually get today in your acquisition math, not the one on the marketing page.

Facing the same decision from the other side — 20% down and the deal misses the bar? That one has its own breakdown.

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