DP-3 Landlord Insurance & Replacement Cost Value (RCV)
Bottom Line Up Front (BLUF): Wholesale DSCR closings require an active landlord hazard policy (DP-3 or commercial habitational policy) insuring 100% of the insurable Replacement Cost Value (RCV) or the loan balance, plus 6–12 months of Business Income / Rent Loss coverage.
Underwriting Formula / Rule
Coverage = Min(100% Insurable Replacement Cost Value [RCV], Loan Amount) + 6 Months Rent Loss.
Wholesale Shelf Benchmark
Actual Cash Value (ACV) policies are generally rejected by institutional wholesale servicers.
Frequently Asked Underwriting Questions
Must the mortgagee clause match the wholesale lender exactly?
Yes, the insurance binder and title commitment must list the exact ISAOA/ATIMA mortgagee clause and LLC vesting.
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