Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The Quick Read: Yes, 15% down (85% LTV) on a DSCR investment purchase exists, but only through select high-leverage programs in the wholesale network. It typically requires a credit score around 700 or higher and rent that clears the program’s coverage test on the larger loan. Most purchase files land at 75%–80% LTV instead.
- Where 15% sits: it is the top of the leverage range, not the usual outcome. Most purchases use 20%–25% down.
- Credit: select high-leverage programs want roughly 700+. A 620 floor exists in parts of the network, and most programs want around 660.
- Coverage: a bigger loan means a bigger payment. The rent-to-payment ratio often becomes the limit before the LTV cap does.
- Cash: reserves and closing costs are separate from the down payment.
- Property type: short-term rentals, some multi-unit properties, and larger loans carry different limits.
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Investors ask this question because cash is usually the bottleneck. Each point of leverage frees money for the next deal. It also thins the margin on the current one. The sections below cover how the mechanics work and where the exceptions are. They also cover how to decide whether 15% is the right call for your file.
What Does 15% Down Actually Mean?
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Down payment and LTV are two views of the same number. Subtract your down payment percentage from 100% and you get the loan-to-value ratio. That is the math on any purchase. Nothing in a standard DSCR program lets the loan exceed the property’s value, and 100% financing is not part of the picture.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. No government agency sets a down payment for them. Each lender in the network publishes its own leverage tiers, which is why one investor hears “15% is fine” and another hears “plan on 25%.”
Across the wholesale network Lendmire places files with, the pattern is consistent. Purchase leverage mostly sits between 75% and 80% LTV, which means 20% to 25% down. A smaller group of programs reaches 85% LTV on a purchase. Those programs are the answer to the title question, and they come with tighter conditions. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Who Can Qualify at 85% LTV?
Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Qualifying at 85% LTV usually takes three things at once: strong credit, a property that covers its payment with room to spare, and a straightforward property type. A weakness in one area typically pulls the leverage back down a tier. Everything below is subject to lender guidelines, and each file is reviewed individually.
| Factor | What high-leverage programs look for | What moves you down a tier |
|---|---|---|
| Credit score | Roughly 700+ | Mid-600s scores |
| Coverage | Comfortably above the program floor | Thin or sub-1.00 coverage |
| Property type | Standard single-family or similar | Unusual or lower-cap types |
| Loan size | Within standard program range | Very large balances |
| Funds | Your own, documented | Borrowed or unsourced cash |
Credit works in tiers. A 620 floor exists in parts of the network, but that is the entry point, not the leverage sweet spot. Most programs want around 660. The strongest leverage tiers open at 700 and up. An investor at 640 should expect a lower LTV ceiling, and no amount of strong rent changes that.
Coverage matters just as much. Many select programs start at a 1.00 coverage floor, meaning the property’s rent equals its full monthly housing obligation. Stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. That is a different path, not the same program with a lower floor. It generally rules out pairing the lowest down payment with the weakest coverage.
Why the Coverage Ratio Usually Binds First
DSCR compares the property’s rent to its full monthly housing payment, meaning principal, interest, taxes, insurance, and any association dues. A ratio above 1.00 means the property’s income covers the payment. Below 1.00, it does not.
Here is why leverage and coverage pull against each other. A smaller down payment means a bigger loan. A bigger loan means a bigger principal-and-interest payment. Taxes and insurance stay the same, so the ratio falls, though by a little less than the loan grows.
Run the numbers on one modeled property. These ratios are illustrative assumptions, not market data. Say the property covers its payment at about 1.10x with 20% down. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
| Down payment | LTV | Loan size vs. the 20% case | Modeled coverage |
|---|---|---|---|
| 15% | 85% | About 6% larger | Around 1.04x |
| 20% | 80% | Baseline | About 1.10x |
| 25% | 75% | About 6% smaller | Around 1.15x |
Moving from 80% to 85% LTV does not sound dramatic. But take a property that sits at about 1.03x with 20% down. At the higher leverage, coverage slips under 1.00. That file now needs a different path. Select lenders in the network will review sub-1.00 coverage, with leverage adjusted. In practice that means pulling back from the higher leverage, not combining the two. Eligibility depends on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Think of the 15% question as two separate tests. The first is whether a program offers the leverage. The second is whether your specific property passes on that bigger loan. Plenty of investors qualify for the first and fail the second. This is most common where purchase prices are high relative to rents. In higher-yield areas, the coverage test is rarely the limiting factor.
One caution about what coverage means. Clearing 1.00 is not the same as positive cash flow. DSCR looks at rent against the housing payment only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A property that clears the lender’s test with a thin margin can still lose money in a real year.
What Does the Full Cash Stack Look Like?
The down payment is only the first layer of cash. A 15% purchase typically needs these pieces, all documented:
1. The down payment itself, from your own funds and sourced through bank statements.
2. Closing costs, which are separate from the down payment and are not folded into the loan.
3. Reserves, commonly around 6 months of PITIA (the full monthly housing obligation). Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived. Loans above that size typically step up to about 9 months. Reserves vary by lender, leverage, loan size, and transaction type.
4. Repair and holding cushion, which no lender requires but any experienced investor budgets.
An investor who puts down 15% and arrives at closing with no reserves has only solved half the problem. Lenders look for liquidity left over after closing. Higher leverage tends to draw a closer look at it. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The down payment generally has to be your own money. Borrowing it, or running it through a lien on the property being bought, typically defeats the purpose. Gifted funds are limited and vary by lender. Equity in another property is usable only through a refinance on that property, after which the cash becomes your own funds.
Higher-leverage tiers in DSCR lending tend to price above lower-leverage ones, which makes the payment bigger on top of the larger balance. The calculator on the site gives an illustrative estimate of how that moves a given file. Treat it as a sketch, not a quote.
When Does 15% Make Sense?
The 15% option fits a particular investor. It can be the right choice if all of the following are true:
- Rent covers the larger loan with a real margin, not a rounding-error pass.
- Credit sits comfortably in the strongest tier, so the file is not being stretched on two fronts.
- Reserves remain intact after closing.
- The freed-up cash has a better use, such as another purchase that also pencils.
That last point is the heart of the tradeoff. If you would redeploy the saved 5% into a second property that clears coverage, 15% down is capital efficiency at work. If the saved cash just sits in an account, the larger loan is cost with little benefit. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Put more down if any of these apply:
- The deal clears the test by a hair. A file at the edge at 20% down has no room at 15%.
- Rents are soft relative to price. A high-priced, low-rent area makes any increase in leverage hard to carry.
- You are a first-time investor. Some lenders ask for more down from borrowers without a rental track record, so expect tighter leverage.
- Your reserves are thin. A smaller down payment with fewer reserves leaves little cushion for a vacancy or a roof. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Honestly, this is a close call for many investors. Leverage helps when rents hold and hurts when they dip. A file that depends on 85% LTV to work at all is usually better served by a lower-priced property or more cash down.
Which Properties and Transactions Change the Answer?
The 85% tier applies to purchases of standard investment properties. Several situations move the ceiling.
| Situation | What changes |
|---|---|
| Short-term rental purchase | Leverage tops out at 75% LTV |
| Short-term rental refinance | Around 70% LTV |
| Cash-out refinance, standard rental | About 75% LTV; about 6 months of seasoning is common |
| Cash-out, short-term rental collateral | 70% LTV |
| Rate-and-term refinance | Different ceiling; no purchase down payment |
Short-term rental financing adds more requirements. Expect a score of 640 or higher and about 12 months of hosting history. Purchases carry a 1.00 coverage floor, and refinances carry their own. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income. Anyone weighing 15% down against a seller-financed second lien on a vacation-style rental can see the tradeoffs in Lendmire’s piece 15% Down DSCR vs Seller Second on an Airbnb Purchase. The version for newer hosts is 15% down DSCR against a seller second for a first Airbnb buy.
Loan size also shapes the picture. Standard programs run up to $3,000,000, and smaller balances route through select lenders in the network. Above $2,500,000 the network generally holds to 30-year fixed structures. The spine of the product is the 30-year fixed, with 40-year terms and interest-only periods available through select lenders, and ARM structures for investors who want them.
Some property types are not offered at all. DSCR on manufactured homes (single- and double-wide), log homes, and barndominiums is not part of these programs. An investor eyeing one of those needs a different financing path, whatever the down payment.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
How Should You Prepare Before Applying?
Confirming eligibility before spending money on an appraisal saves frustration. A short checklist:
1. Pull your credit and know your score, because the tier you land in sets the leverage ceiling.
2. Estimate market rent for the property and compare it to the full housing obligation, taxes and insurance included.
3. Run the same property at 15%, 20%, and 25% down. If it only works at 25%, you have your answer.
4. Document the source of the down payment and reserves.
5. Ask a broker which programs in the network offer 85% LTV for your property type, credit, and loan size, since the answer differs across lenders.
A broker earns its keep on step five. A single lender shows you one set of tiers. A broker sees many, so the same file can look different across programs. The strictest overlays ask for stronger credit or lower leverage on 2–4 unit properties. A few lenders in the network are more flexible on that point. That variation is why generalizing from one investor’s experience is risky.
A note on taxes: tax treatment varies by how the funds are used and how the property is held, so keep clear records and consult a qualified tax professional.
Key Terms Defined
DSCR (debt service coverage ratio): the property’s monthly rent divided by its full monthly housing payment, used to judge whether the property supports its own loan.
LTV (loan-to-value): the loan amount divided by the property’s value, so 85% LTV means 15% down.
PITIA: principal, interest, taxes, insurance, and any association dues, which together make up the monthly housing obligation.
Reserves: liquid funds you hold after closing, usually measured in months of PITIA.
Cash to close: the down payment plus closing costs, before reserves are counted.
For deeper background on the mechanics discussed here, see Offermarket and Nasb.
Frequently Asked Questions
Can I put less than 15% down on a DSCR purchase?
Generally no. Select high-leverage programs top out at 85% LTV, and 100% financing is not part of standard DSCR purchase programs. FHA and VA low-down-payment loans are owner-occupant products, so they do not apply to a pure rental purchase.
Does 15% down make the loan more expensive?
Typically yes. Higher leverage tends to price above lower leverage, and the bigger balance also means a larger payment, which lowers the coverage ratio. The size of the effect depends on the lender, your credit, and the property.
Can a gift or borrowed money cover the down payment?
Usually not. Down payment funds generally need to be your own and documented. Gift funds are limited and vary by lender, and a loan secured against the property you are buying typically does not work. Equity from another property is usable through a refinance on that property.
What if the coverage ratio is below 1.00?
Sub-1.00 coverage is available through select lenders in the network, with leverage and terms adjusted. That generally means more cash down, not less. A file that only works at 85% LTV usually will not work below 1.00.
Do reserves count toward the down payment?
No. Reserves are a separate layer, commonly around 6 months of PITIA, though conservative files at modest leverage can see them waived. Larger loans typically step up to about 9 months. Each lender sets its own rules.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. As a mortgage broker with DSCR programs across 41 markets, including Washington, D.C., it arranges financing through select lenders in its wholesale network. For the full picture, see the complete DSCR loans guide. Qualification is subject to lender guidelines and is not a commitment to lend.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage specializing in DSCR investor loans, helping arrange financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 2025 and 2026.
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References
1. Offermarket
2. Nasb
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Finance an Airbnb Through an LLC With a DSCR Loan · DSCR Loan Down Payment: 20% vs. 25% at Purchase and What Shifts · How a 40-Year DSCR Loan Works as a 1099 Contractor
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.