Reserves (Mortgage)

Reserves are liquid funds a lender requires you to still have on hand after closing, on top of your down payment and costs. They are usually measured in months of PITIA, the full monthly payment, so a six-month reserve means six payments sitting available. DSCR loans on rentals commonly ask for around six months.

The reason is a buffer: vacancies, a slow season, or an unexpected repair can interrupt the income that covers the payment, and reserves keep you from missing it. How many months a lender wants varies by program and by how strong the rest of your file looks, so confirm the requirement early in the process.