The Quick Read: Most purchase files across the wholesale network Lendmire works with land at 75%-80% loan-to-value (LTV, the loan as a share of the property’s value). That means roughly 20%-25% down. A few high-leverage programs reach 85% LTV, or 15% down, usually for borrowers with scores around 700 and up. Your down payment is simply 100% minus the lender’s maximum LTV, and every file is subject to lender guidelines.
Key Takeaways
- The minimum down payment comes from the lender’s LTV cap, not from a government formula.
- Typical purchase range: 20%-25% down. Select programs allow 15% down with strong credit.
- More cash down shrinks the loan and can lift your rental coverage, but it never erases credit floors, reserve rules, or property eligibility.
- Down payment is not the only cash you need. Closing costs and reserves sit on top of it.
- A true zero-down DSCR purchase is not a realistic structure.
- These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Key Terms Defined
DSCR (debt service coverage ratio): Monthly rent divided by the monthly housing obligation. Above 1.00 means the rent covers the payment.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 1, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 1, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
PITIA: Principal, interest, taxes, insurance, and association dues. It is the full monthly obligation the rent is measured against.
Reserves: Liquid cash you keep after closing, usually counted in months of PITIA.
Seasoning: The waiting period a lender wants between events, such as owning a property before a cash-out refinance.
Cash-out refinance: A new loan on a property you already own that pays off the old loan and hands you some equity as cash.
Non-QM: Loans that sit outside standard owner-occupied mortgage boxes. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
How Does LTV Turn Into Your Down Payment?
The lender picks a maximum LTV for your file, and you fund the rest. Down payment equals 100% minus that cap.
| Max LTV | Minimum down |
|---|---|
| 85% (select programs) | 15% |
| 80% | 20% |
| 75% | 25% |
No matter how strong you are, a 75% cap means 25% down. Strength changes which cap you get. It never lets you borrow past it. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Across the network, most purchase files sit in the 75%-80% band. The 85% tier exists, but it is narrow. Expect it to want a score around 700 or better, and expect the property and coverage to be clean. Think of it as the reward for a very tidy file, not the starting point.
One more thing that trips people up: the network has no state-specific LTV overlay in force. Every state takes the same standard purchase tiers.
How Underwriting Actually Treats Your Down Payment, Step by Step
Underwriting a DSCR purchase is a sequence of gates. Your down payment touches several of them.
1. The lender sizes the property’s income. The appraiser documents market rent for the property. Underwriting measures that rent against PITIA. Your personal paycheck is not the test.
2. Credit sets the leverage tier. A 620 floor exists in parts of the network. Most programs want about 660. A score of 700 or better unlocks the strongest leverage tiers. Lower scores usually mean a lower LTV cap, which means more cash down.
3. Coverage adjusts the cap. A 1.00 ratio is where select programs start. It is a floor for specific programs, not a universal standard. Stronger coverage opens better pricing and often more leverage.
4. The LTV cap fixes your minimum equity. Credit, coverage, property type, loan size, and transaction type all feed this cap. The lowest cap among them usually wins.
5. Your cash must be documented. Down payment, closing costs, and reserves all need a paper trail. Gift funds and seller credits are handled differently from lender to lender. Seller credits mostly cover closing costs, not the equity requirement.
6. Reserves get checked. Commonly that is about 6 months of PITIA. 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. These vary by lender, leverage, loan size, and transaction type.
Notice what is not on the list: a trick for shrinking the down payment below the cap. Reserves and extra cash do not buy you more leverage by themselves.
Does More Cash Down Fix a Weak Rent Number?
Partly. A bigger down payment means a smaller loan, a smaller payment, and a higher DSCR. That is real math.
Picture a purchase at 80% LTV where rent covers the payment at about 0.95x. Moving to 75% LTV trims the loan and lifts coverage, but only modestly, because taxes and insurance do not shrink with the loan. It may bring the file closer to 1.00. It will not rescue a property whose rent is far below its costs. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. In practice that means a lower LTV cap, so more equity from you. Investors who run thin coverage at high leverage often find the file fails on both tests. The strongest files clear both: enough equity and enough rental coverage.
Also keep a plain truth in view. DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property cash flows. Repairs, vacancy, management, utilities, and capital expenses all sit outside the calculation. Budget for them separately.
Purchase, Cash-Out, and Short-Term Rental Structures
The same property can need different equity depending on what you are doing with it.
Purchase. 75%-80% LTV is typical, with 85% at select high-leverage programs. Loan sizes run up to $3,000,000 on standard programs. Above $2,500,000 the network generally holds to 30-year fixed structures.
Cash-out refinance. There is no down payment here. The equivalent is the equity you must leave in the property. The ceiling is around 75% LTV for standard rentals, and about 6 months of seasoning is the common expectation. Short-term rental collateral usually caps lower, at about 70% for cash-out.
Rate-and-term refinance. You are only replacing the existing loan, so no new cash comes out. Leverage caps tend to be a bit friendlier than cash-out, and reserves can be lighter on conservative files.
Short-term rentals. Purchase leverage tops out at 75% LTV. Refinance runs around 70%. Expect a score of 640 or better and about 12 months of hosting history. Underwriting often uses an adjusted income figure rather than raw gross bookings. Lendmire’s piece on “How Much Down Payment For A Short Term Rental?” goes deeper. Short-term rental rules can vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income.
Term structures. The spine is the 30-year fixed. Extended 40-year terms and interest-only periods are available through select lenders in the network, and ARM structures exist for investors who want them. These change the payment, which changes coverage, which can change how much leverage a lender will allow.
Where the General Rule Breaks
The 20%-25% range is a guide. Here are the named edge cases where it bends.
Credit below the middle tiers. Scores near the 620 floor usually mean a lower LTV cap. Plan on more than 25% down.
DSCR vs. conventional financing
There are two common ways to finance an investment property in this market, 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.
Larger loans. Balances at the top of the range often face tighter caps and higher reserves, around 9 months above $1,500,000.
Two-to-four-unit buildings, condos, and rural properties. These often carry lower caps or adjusted terms than a standard single-family rental. Rural and non-warrantable condo files are where lenders in the network differ most from each other.
No-ratio structures. These are available only through select lenders, generally for borrowers who already own a primary residence. Expect more equity and different terms, not a shortcut.
Foreign nationals and first-time investors. Some programs ask for lower leverage or extra reserves for these profiles. Ask early, because the answer varies by lender.
Property types that are not offered. DSCR financing on manufactured homes (single- and double-wide), log homes, and barndominiums is not offered through the network. No down payment size changes that.
Borrowing entity. Many investors hold title in an LLC, subject to lender program eligibility. 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. That treatment traces back to federal rulemaking, and the Federal Reserve’s summary of Regulation Z describes the business-purpose exemption. The catch: the loan’s actual purpose controls, not just the label on the property. No government rule sets a DSCR down payment. The number comes from lender guidelines.
Can You Buy With Nothing Down?
No, not for a legitimate DSCR purchase. The lender’s LTV cap forces a floor, and the lowest tier in the network is 15% down. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Low-cash-to-close stories usually come from somewhere else. A different legal capital source funds the equity, or a seller credit covers closing costs. Neither removes the equity requirement. Your down payment still has to come from your own funds or from sources the lender permits.
Many investors fund the equity from existing property. Lendmire’s article on using home equity for a down payment on an investment property walks through that route. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
What the Decision Looks Like in Practice
This is where the explainer becomes a plan. Work through it in this order.
Start with your score. Know which tier you are in: roughly 620, 660, or 700 and up. That tells you whether 75%, 80%, or 85% is on the table.
Estimate the coverage. Divide realistic market rent by the full PITIA. If the number sits near 1.00, expect a lower cap, or plan to put more down to improve it.
Add up all the cash. Down payment, closing costs, and reserves are three separate buckets. Investors who budget only the first are the ones surprised at closing.
Decide whether the extra down payment earns its place. Putting more down raises coverage and may widen your options. It also ties up cash you might use for the next deal, repairs, or a vacancy cushion. This is a genuine tradeoff. A higher-leverage purchase preserves liquidity but leaves thinner coverage and less margin for error. A lower-leverage purchase is sturdier but slower to scale.
Compare lenders, not just numbers. This is where a broker earns the fee. Programs in the network disagree on property types, reserves, and how they treat borderline coverage. The same file can look very different across them. For the full picture of how these loans work, see the complete DSCR loans guide.
A short reality check on mistakes: investors most often confuse a strong DSCR with a low down payment, assume DSCR means no paperwork, and forget reserves. Credit, assets, entity documents, and appraisal all still apply. Strong coverage helps pricing and leverage tiers. It does not lower the cap.
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. It arranges DSCR financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Program terms change and every file is underwritten individually, so nothing here is a commitment to lend.
Frequently Asked Questions
What is the minimum down payment for a DSCR loan?
It depends on the lender’s maximum LTV for your file. Most purchase files across the network land at 20%-25% down. Select high-leverage programs reach 15% down, usually with a score around 700 or better. Your credit, coverage, property type, and loan size can all push the number up, subject to lender guidelines.
Can I get a DSCR loan with no money down?
No. Even the highest-leverage tier needs 15% down. Seller credits and other capital sources can change where your cash comes from, but they do not remove the equity requirement. Closing costs and reserves are separate from the down payment. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Does a higher DSCR lower my down payment?
It can help, but it does not erase the cap. Stronger coverage opens better pricing and sometimes more leverage. Credit tier, property type, and loan size still set the ceiling. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted, which usually means more equity from you.
How much do I need to keep in the property on a cash-out refinance?
Cash-out tops out around 75% LTV for standard rentals, so you leave at least 25% equity in place. Short-term rental collateral usually caps lower, around 70%. About 6 months of seasoning is the common expectation, though it varies by lender.
Do reserves count toward my down payment?
No. Reserves are cash you hold after closing. They are commonly around 6 months of PITIA, can be waived on conservative rate-and-term files at modest leverage under $1,500,000, and typically step up to about 9 months on larger loans.
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.
Scotsman Guide’s Top Mortgage Workplace lists for 2025 and 2026 document Lendmire’s recognition.
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References
1. Federal Register – CFPB Ability-to-Repay/QM final rule
2. Federal Reserve – Regulation Z summary
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Luxury Rental DSCR Loans In New Jersey · Jersey Shore Vacation Rental Loans: DSCR Financing In Ocean City, Cape May And Long Beach Island · DSCR Cash-out Refinance In New Jersey: Pulling Equity From A Rental
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.