The Quick Read: Usually 25% down on a purchase, because no-ratio condo financing through select lenders in Lendmire’s wholesale network typically tops out at 75% loan-to-value (LTV, the loan as a share of the price) on an investment condo, with 30% equity on a rate-and-term refinance and 35% on a cash-out. Waiving the rent-coverage test never lowers the equity you bring. If anything, it raises the bar. Subject to lender guidelines, and not a commitment to lend.
- Purchase: typically up to 75% LTV, so about 25% down.
- Rate-and-term refinance: typically up to 70% LTV, so about 30% equity.
- Cash-out refinance: typically up to 65% LTV, so about 35% equity.
- Credit: a minimum score of 640 on this path, with stronger credit improving the file.
- Cash beyond the down payment: reserves and closing costs are separate pots of money.
What “No-Ratio” Actually Means
A no-ratio DSCR loan skips the rent-coverage calculation. DSCR stands for debt service coverage ratio, which is the property’s rent divided by its monthly obligation (principal, interest, taxes, insurance and HOA dues, together called PITIA). On a standard DSCR loan, the lender runs that division and wants to see a certain number. On a no-ratio loan, nobody computes it.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
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As of Oct 15, 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.
Qualification rests on your credit and your equity instead. That is why the down payment matters so much here.
The term gets used loosely, so pin it down. Some people say no-ratio when they mean no personal income test. Every DSCR loan already skips that, because it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The no-ratio path goes one step further and drops the coverage calculation too.
Two other paths sound similar and are not the same thing:
- Standard DSCR: 1.00 coverage is where many select programs start. It is a floor for those programs, not a universal rule.
- Sub-1.00 coverage: available through select lenders in the network, with leverage and terms adjusted.
- No-ratio: available only through select lenders, generally for borrowers who already own a primary residence.
Confirm which of these a lender means before you compare quotes. The answer changes.
So What Is the Number for a Condo?
On a purchase, plan on 25% down. That is the 75% LTV cap on this path, and no credit score buys it back. Plan on 30% equity for a rate-and-term refinance and 35% for a cash-out. Those are the 70% and 65% LTV ceilings. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
| Transaction | Typical max LTV | Equity you bring |
|---|---|---|
| Purchase | 75% | About 25% |
| Rate-and-term refinance | 70% | About 30% |
| Cash-out refinance | 65% | About 35% |
Notice what is missing: any dial that moves the numbers up. A standard DSCR purchase on a property with strong coverage and strong credit can reach 80% LTV on many files. Condos on this path sit at the low end of the 75%-80% purchase range, and the no-ratio envelope lands at 75%. You can put more down. You cannot put less. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Your credit decides whether you are in the door at all. The no-ratio path wants a 640 minimum. A higher score strengthens the file, but it does not change the LTV cap. Exact eligibility depends on lender guidelines, property review and full underwriting.
Why Lenders Ask for More Equity When the Ratio Is Waived
When a lender drops the coverage test, it loses its main evidence that the rent supports the loan. Equity replaces that evidence. A borrower with 25% or more of their own money in the unit has a lot to lose if the deal goes wrong. The lender’s collateral cushion is wider, too.
Think of it as a trade. You give up the rent test. The lender takes back protection through leverage and credit.
Condos add a second layer. You are not just buying a unit. You are buying into a building with shared roofs, shared reserves and shared decisions made by a board. If the association runs thin on reserves, or too many units are rented out, or a special assessment lands, the unit’s value and carrying cost both feel it. Lenders price that risk into the leverage cap. That is one reason condos land at 75% on a purchase where a single-family rental might reach higher.
Warrantable vs. Non-Warrantable Condos
Both types share the same 75% purchase cap on this path. Non-warrantable means the project fails one of the standard agency eligibility tests for condo projects. Common reasons include heavy investor ownership, pending litigation or a hotel-style rental program.
Non-warrantable does not mean the unit is defective. It means agency loans are off the table. DSCR loans are not agency products, so lenders set their own project rules. Many non-warrantable projects can be reviewed, subject to lender guidelines.
Hotel-style buildings (often called condotels) get the tightest treatment of all. Front desk services and a rental-pool program raise the lender’s questions about the income and the building. Expect a condotel to be reviewed more strictly on a refinance than a standard condo.
One boundary to know. DSCR financing in the network covers investment property only. Manufactured homes, log homes and barndominiums fall outside these programs, so a condo is firmly on the eligible side while those are not offered.
Does the Appraisal Change the Equity Math?
Not the percentage, but it can change the value you are measured against. Your LTV is calculated on the lower of the price or the appraised value. If a unit appraises under contract price, the cap applies to the lower figure, and you cover the difference.
Condo appraisals use their own report. Fannie Mae’s appraiser forms page lists Form 1073, the Individual Condominium Unit Appraisal Report, alongside Form 1025 for small residential income properties. Those forms are named here only so you know what the appraiser is working from. They are not DSCR rules.
The 1073 itself marks its income approach as not required by Fannie Mae. That is why DSCR lenders commonly add a separate rent schedule on files that use rent. On a no-ratio file, rent matters less to qualification, but the lender still wants a clean valuation.
Short-Term-Rental Condos
If you plan to host guests, the leverage story changes, and you move to the standard path. On short-term-rental collateral, purchases go up to 75% LTV, refinances are around 70% and cash-outs are 70%. Expect a credit score of 640 or higher and about 12 months of hosting history. The coverage floor is 1.00 on purchases and refinances. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
For a first-time host, that history requirement matters. Buying a condo to start an Airbnb is a different file from buying a condo that already hosts guests.
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. In a condo, the HOA documents are usually the first gate. Read them before you write an offer.
Purchase vs. Refinance: Why the Equity Climbs
A refinance asks for more equity than a purchase. On this path, a purchase allows 75% LTV, a rate-and-term refinance 70% and a cash-out 65%. The logic is simple. A purchase has an arm’s-length price behind it. A refinance rests on an appraisal, and the lender leaves more room for a miss. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Cash-out is the most conservative, since you are pulling equity out as cash. If you want that cash for the next deal, see Lendmire’s complete guide to no-ratio DSCR loans on condo properties for the broader mechanics.
Cash-out files also usually carry seasoning, a waiting period between buying and refinancing. About six months is the common expectation across most of the network.
Where the Down Payment Money Must Come From
Your own capital. Most DSCR programs want to see the down payment come from your own verified funds, not from a second loan placed at closing to cover it. Gift funds and down payment assistance programs are the stuff of owner-occupied loans, and they do not carry over to investment condos.
Expect the lender to ask for bank statements showing the money has been in your account. Large recent deposits will draw questions. Move funds early and keep a paper trail.
Zero-down investment financing is not a legitimate mainstream product, and low-down offers should make you cautious. Lendmire’s page on DSCR loans with no down payment explains why the equity requirement exists.
The Cash You Need Beyond the Down Payment
The down payment is one of three pots. Plan for all of them:
- Down payment: roughly 25% of the price on a no-ratio condo purchase.
- Reserves: liquid funds the lender wants left over after closing. Across most programs this is commonly about 6 months of PITIA, stepping up to about 9 months on loans above $1,500,000. Reserves vary by lender, leverage, loan size and transaction type.
- Closing costs: appraisal, title, lender fees and, on condos, items tied to the association.
Do not count the same dollar twice. Money used for the down payment cannot also be your reserves. Many first-time condo buyers learn this late.
Loan sizes on standard programs run up to about $3,000,000, and files above $2,500,000 generally stay with 30-year fixed structures. Most condo deals sit far below that, so the reserve question usually comes down to the 6-month figure.
Run the Numbers: How HOA Dues Move the Ratio
HOA dues sit inside PITIA. That means a condo with high dues can look thin on coverage even when rent seems healthy.
Picture a condo where the rent covers the loan payment, taxes and insurance, but the HOA dues push the total just past the rent. On a standard DSCR path, coverage lands a bit under 1.00. Raise the down payment, and the loan shrinks. The payment shrinks with it, and coverage climbs back toward or above 1.00.
That is the lever: more equity lifts the ratio. A small bump in down payment can swing a borderline file, and it can be the difference between a standard DSCR file and one that needs a different path.
Here is the honest tradeoff on that choice:
- Stay standard and put more down. You keep coverage on the page and may see better pricing and leverage as the ratio strengthens. The cost is more cash tied up.
- Go no-ratio. No coverage ratio is computed, so a thin ratio no longer blocks the file. The cost is the reduced leverage and the stronger credit the lender expects.
Neither wins every time. If the unit nearly clears the standard test, a larger down payment is often the cleaner fix. If rent is far below the obligation, a no-ratio or sub-1.00 path through select lenders may make more sense, with leverage and terms adjusted.
One caution that trips up new investors. Clearing 1.00 does not mean positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities and capital expenses sit outside the calculation. A condo can clear the ratio and still lose money in a bad month.
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.
Can You Put Less Down?
Not on this path. No-ratio does not mean low equity, and an investment condo has no FHA or VA low-down option behind it. What investors can do is reduce the cash they need from savings:
- Pull equity from another property. A cash-out refinance on a seasoned rental can supply the down payment for the next condo. Cash-out tops out around 75% LTV across most of the network on standard rentals, and lower on the no-ratio path.
- Negotiate seller credits. These help with closing costs, within what the lender allows. They do not replace the down payment.
- Pick a different property type. If the condo’s cap is the problem, a single-family rental may allow more leverage on a standard file. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
If you scale a portfolio, capital is the real wall. Putting 25% into every deal slows you down. Buying, seasoning and refinancing is how many investors release that cash and keep going.
A Practitioner Note on Condo Files
Across the wholesale network, condo files stall on the building more often than on the borrower. The lender wants the association’s budget, reserve level, owner-occupancy mix and any litigation. Ask for that package from the listing agent or the management company before you commit to a purchase. Equity can’t fix a building a lender won’t review.
Questions to Ask Before You Apply
Short list, in order of importance:
1. Does this path compute a coverage ratio, or skip it?
2. What is the max LTV for a condo on my transaction type?
3. Is the project warrantable, non-warrantable or condotel?
4. What credit score is the program minimum, and what score gets the best leverage?
5. How many months of reserves, and does the loan size change that?
6. Are short-term rentals allowed by the HOA and the local rules?
7. Do I qualify given my own housing situation? This path is generally for borrowers who already own a primary residence.
On that last point, the no-ratio path is not open to vacant properties, first-time homebuyers, or files with one or no credit score. Know that before you spend on an appraisal.
For the business-purpose angle: 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. Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
No-ratio DSCR loan: An investor loan where no rent-coverage ratio is computed. Qualification rests on credit and equity instead.
LTV (loan-to-value): The loan amount divided by the property’s price or appraised value, whichever is lower.
PITIA: Principal, interest, taxes, insurance and association dues, which together make up the monthly obligation.
Warrantable condo: A condo project that meets the standards of the big agency mortgage buyers.
Non-warrantable condo: A condo project that fails one of those standards. It can still be reviewed under DSCR guidelines.
Seasoning: The waiting period between buying a property and refinancing it.
Reserves: Liquid funds you keep after closing to cover the payment if income dips.
Frequently Asked Questions
Can I buy a condo with 10% down on a no-ratio DSCR loan?
No. The no-ratio condo purchase path through select lenders typically tops out at 75% LTV, which means about 25% down. Even standard DSCR purchases usually require 20%-25% down. Select high-leverage programs reach 85% LTV (15% down) with a score of roughly 700 or higher, but that tier belongs to a separate standard-DSCR path, not to the no-ratio condo envelope, where leverage and terms are adjusted. Subject to lender guidelines.
Does a higher credit score reduce the down payment on a no-ratio condo?
Not on the leverage cap. The score decides whether you qualify (640 is the minimum on this path) and may improve the file, but the property-type cap holds. Stronger credit can help with pricing and terms on a standard DSCR file. It cannot buy back the condo cap.
Is the down payment the same for a warrantable and a non-warrantable condo?
On this path, yes. Both share the 75% purchase cap. The difference shows up in project review, since a non-warrantable building draws closer scrutiny of the association’s finances, ownership mix and any litigation. Each lender sets its own project rules.
Do HOA dues change how much I need to put down?
Not the cap, but they change the payment. Dues are part of PITIA, so high dues weigh on coverage on a standard DSCR file. A larger down payment shrinks the loan and can lift the ratio. On a no-ratio file, no ratio is computed, so dues do not affect qualification the same way, but they still affect your real cash flow.
Can I use my LLC to buy the condo?
Often yes, depending on program guidelines. Lenders commonly review the LLC’s documents and the borrower’s personal credit. Confirm entity rules with your loan officer before you sign a purchase contract.
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 broker arranging financing through select lenders across 41 markets, including Washington, D.C., it works from your complete picture. Start with the complete DSCR loans guide, then run your own condo through the illustrative calculator. Equity, not rent coverage, is the real price of admission on a no-ratio condo.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae, Appraiser Forms and Property Underwriting
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Reserve Cash a Fifth Airbnb DSCR Loan Requires · How Much Down Payment Does a No-Ratio DSCR Loan for Business Owners Need? · DSCR Loan Down Payment: 20% vs. 25% at Purchase and What Shifts
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.