Most DSCR purchases start at 20% down. The property, your credit and the rent coverage decide whether you stay there or need more.
In short: A DSCR loan purchase typically takes 20% down, because our programs go up to 80% LTV for well-qualified borrowers and properties. Lower DSCR, lower credit scores, short-term rentals, condos and smaller loan amounts can each push the required down payment to 25% or more, depending on the program. On top of the down payment, plan for closing costs and cash reserves. Down payment funds can come from savings, business accounts or, on many programs, a HELOC on another property you own.
LTV is the loan amount divided by the purchase price or appraised value, whichever is lower. At 80% LTV, the down payment is 20%.
If the appraisal comes in below the contract price, LTV is figured on the lower value. That gap usually has to be covered with more cash, so the appraisal matters to your down payment as much as the price does.
Each factor below can lower the maximum LTV. They can stack, so a file with two or three of them may land well below 80%. Exact limits vary by program.
| Factor | Typical effect |
|---|---|
| DSCR below about 1.0x | Lower max LTV; some programs allow sub-1.0 with more down |
| Credit near the 620 minimum | Often a step lower in leverage and higher pricing |
| Short-term rental | Often lower leverage than a long-term rental |
| Condo, especially non-warrantable | Often lower leverage and a condo review |
| Smaller loan amount near $150K | Some programs limit leverage on small loans |
| Rural property or unique property type | Can reduce leverage; varies by program |
Lenders want to see the money and where it came from. Large recent deposits usually need a paper trail.
Common sources are personal savings, business or LLC accounts, proceeds from selling another property and equity pulled from a property you already own. Some investors use a HELOC on another property; see our guide to using a HELOC for an investment property down payment. Gift funds and seller credits have program-specific rules, so ask before you rely on them.
Most DSCR programs also ask for reserves: cash left over after closing, measured in months of the full payment (principal, interest, taxes, insurance and any HOA dues). The required number of months varies by program, loan size and how many properties you own.
Reserves stay in your account. They are not paid at closing, but they must be documented. Retirement accounts can sometimes count at a discount. See our page on cash reserves for investment property loans.
This example is illustrative and not a quote. An investor buys a single-family rental for $300,000. At 80% LTV the loan is $240,000 and the down payment is $60,000. If the file only qualifies for 75% LTV, the down payment is $75,000. At 70%, it is $90,000.
At 80% LTV and a sample rate of 7.0% on a 30-year fixed, principal and interest is about $1,597. With $450 a month for taxes and insurance, the full payment is about $2,047. If the program asks for six months of reserves, that is about $12,281 to keep in the bank. Add closing costs, which depend on the state, title, appraisal and lender fees.
You cannot go above the program's maximum LTV, but you can avoid the factors that pull it down.
The fastest way to know your real number is to have the financing team review the property, price, rent and your credit. We come back with 2–3 options showing leverage, estimated cash to close and the payment.
Typically 20% on a purchase, since our programs go up to 80% LTV. Some properties and borrower profiles require 25% or more.
On many programs, yes, as long as the HELOC is secured by a different property and the new payment is accounted for. Document the draw and the HELOC terms.
Often. STR DSCR loans qualify on projected revenue, and many programs allow somewhat less leverage than on a long-term rental.
No. Reserves are extra cash you keep after closing, measured in months of payments. You document them, but you do not pay them at closing.
No. Sellers may be able to credit some closing costs, depending on the program, but the down payment has to come from you or another allowed source.
There is no down payment on a refinance. Cash-out loans go up to 75% LTV, so you keep at least 25% equity in the property.
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