Bet 90% here will say the lender does......nope, the "Maker" is the BORROWER!

If you borrow more than that limit, the interest is no longer deductible and in some cases can be considered income by the IRS.Make sure you have a really good CPA and tax attorney.

For conventional financing lenders do not look at the DCR, Cap Rate or Cash on Cash Return they look at a borrowers overall debt to income ratio using the borrowers personal income W2 or self employment and sometimes the rental property income depending on the program and borrowers landlord experience less the borrowers primary mortgage PITI and other monthly liabilities.

I actually borrowed (for an obscene rate) the EMD (and my EMD lender's POF bank statement) to put it under contract (FYI - even desperate sellers are not ignorant re markets/ value/ POF like they are often portrayed here).

Obviously subsequent loans would not be cash out as no equity would be established in a short period.I refinanced one borrower three times in back to back closings under the same wholesale mortgage banker as interest rates were falling and paid the differences in settlement fees for the borrower!

Are you borrowing 80% of the purchase price and looking for the down payment plus the rehab cost?

You could always refi your existing loan though into a new loan with just one of you as the sole borrower.

I feel that this borrower is an investor, there is no house that will be lived in, thus Dodd Frank is not in play.

You can screen borrowers, and diversify so you can minimize risk.

Most transactional funding lender will have the borrow to put their fee in escrow before they fund the A to B deal.Joe Gore