Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The Quick Read: Sometimes, but only on a strong file, because most DSCR purchase loans in Lendmire’s wholesale network land at 20%-25% down. A select group of high-leverage programs reaches 85% loan-to-value (LTV) on a purchase, which equals 15% down, and those programs typically want a score around 700 or higher. Being a first-time landlord does not block the loan. It usually tightens the terms.
- Most purchase files sit at 75%-80% LTV, which means 20%-25% down.
- 15% down means 85% LTV, and it is a select-program option, not a standard term.
- The property must pass two tests: enough equity and enough rent coverage.
- A larger down payment can lift the coverage ratio, but it never erases credit floors, reserve rules, or property limits.
- Clearing the coverage test is not the same as making money on the property. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
DSCR Calculator
Run the numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 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 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.
What Does 15% Down Actually Mean Here?
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Fifteen percent down is an 85% LTV purchase. LTV is the loan amount divided by the lesser of the purchase price or appraised value. Down payment is simply 100% minus the LTV. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
A DSCR loan is an investor loan that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. DSCR stands for debt service coverage ratio: monthly rent divided by the full monthly obligation. That obligation is PITIA, meaning principal, interest, taxes, insurance, and any HOA dues. A ratio of 1.00 means rent equals the payment. Lendmire’s complete DSCR loans guide walks through the basics if the term is new.
Across the network, 1.00 is where many select programs start. A separate path through select lenders takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage.
Does Being a First-Time Landlord Change the Down Payment?
Yes, usually in the direction of more cushion. Prior landlord experience is generally not required, so you can apply with no rental history. But lenders see a first-time file as less proven. The overlay shows up as higher credit expectations, more reserves, or a lower leverage tier.
Here is what changes and what stays put:
| Factor | First-time status changes it? | What to expect |
|---|---|---|
| Eligibility | Generally no | Experience is usually not required |
| Top leverage tier | Often | 85% LTV is for strong files |
| Credit expectations | Often | 700+ for the strongest tiers |
| Reserves | Sometimes | Commonly around 6 months of PITIA |
| Property rules | No | Same eligibility as any investor |
Reserves are cash left over after closing, sourced from your own funds. Plenty of first-timers focus on the down payment and forget this pot. Down payment, closing costs, and reserves are three separate piles of cash. (Plan for all three before you write an offer.)
Scotsman Guide, a trade outlet, notes that requirements vary by lender and that many want a meaningful down payment. It also gives an example of leverage tiers shrinking as loan size grows. Treat that as an illustration of how lenders think, not a program menu. The figures that apply to Lendmire’s network are the ones here.
What Credit Score Do You Need at 15% Down?
Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Credit is the first gate. A 620 floor exists in parts of the network. Most programs want around 660. The strongest leverage tiers want 700 or more, and the 85% LTV purchase programs generally sit in that top band.
So a 640 score can still get you a DSCR loan, just not at 15% down. Many first-timers plan around a 20%-25% down payment for this reason. The score decides which tier you land in before the property is even reviewed. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The Two Tests Every 15%-Down File Must Pass
A 15%-down file has to clear equity and coverage together. Having 15% in the bank only answers the first test. The property still has to produce enough rent to carry a bigger loan.
Each 5% less down raises the loan amount. That raises the payment the rent must cover. Run the numbers on a single rental two ways. At 75% LTV, say rent covers the payment at roughly 1.15x. Move the same property to 85% LTV and coverage drops toward the low 1.0 range, because the loan grew while the rent stayed put. These are modeled ratios, not market facts. The point is the direction: a property that passes at 75% can fail at 85%. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Now flip it. If you put more down, the payment falls and the ratio rises. A borderline property sometimes needs a larger down payment to reach the coverage a program wants. Leverage and coverage pull against each other, and a lender looks at both at once.
Other factors set your tier as well:
- credit score,
- the coverage ratio,
- loan size,
- property type,
- purchase versus refinance,
- borrower experience.
Programs generally step leverage down as the balance climbs. Standard programs run up to $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Reserves commonly step up to about 9 months above $1,500,000.
What Else Do You Need Besides the Down Payment?
Cash to close is bigger than the down payment. Closing costs and reserves come on top. Reserves vary by lender, leverage, loan size, and transaction type. They are commonly around 6 months of PITIA. Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived. Higher-leverage first-time files are not the place to count on that.
Source of funds matters too. Reserves must come from your own sourced funds, and the lender will want to see where the money sat. Whether borrowed money or gift funds can cover a down payment is lender-specific, and it is often restricted. A buyer who is cash-constrained at 15% down should ask that question before choosing a lender, not after.
Typical documents include the purchase contract, an appraisal with a rent schedule, a lease if the property is tenanted, asset statements, entity documents if you close in an LLC (subject to lender program eligibility), a business-purpose certification, and insurance.
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. The CFPB’s regulation text says the lender determines case by case whether the primary purpose is a business one. Compliance Alliance adds that the loan’s purpose, not just the property type, drives that call. That is also why you will sign a business-purpose certification.
Is It a New Purchase or Your Former Home?
Both can work, but the rent evidence differs. On a tenanted purchase, the lender uses the actual lease or the appraiser’s market rent estimate. On a vacant property or a former home with no lease, the file leans on that market rent figure. Some programs lower leverage on vacant units because the rent is less certain.
Appraisal risk bites hardest at high leverage. LTV uses the lower of price or appraised value. If the appraisal comes in short, the loan shrinks and you cover the gap in cash. With 15% down, there is no thick equity cushion to absorb that surprise. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
One more point: 15% down applies to purchases. Cash-out refinances top out around 75% LTV across most of the network, with about 6 months of seasoning as the common expectation. If your plan is to refinance a home you already own, the leverage conversation is different. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
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.
Stress Test: When Does 15% Stop Making Sense?
It stops making sense when thin coverage meets thin cash. A coverage ratio near 1.00 leaves no buffer. A tax or insurance bump, or one vacant month, can push a thin file under water.
Remember what DSCR measures. It compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Clearing 1.00 is not positive cash flow. A first-time landlord with one property feels this most, because a single vacancy hits both the loan and personal cash at once.
A quick self-check before you choose 15%:
- Does the property still cover its payment with rent trimmed by a realistic vacancy allowance?
- Do you hold reserves after the down payment and closing costs?
- Would a low appraisal still leave you able to close?
- Is your score in the 700+ band?
- Could you carry the property for a few months with no rent?
If two or more answers are no, 20%-25% down is the safer call. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Alternatives Worth Comparing
Different routes fit different buyers. Lendmire’s piece 15% Down DSCR vs Seller Second for a First Airbnb Buy covers one creative structure. Here is the broader comparison.
| Route | Typical fit | Main tradeoff |
|---|---|---|
| DSCR purchase, 20%-25% down | Most first-time landlords | More cash up front |
| DSCR purchase, 15% down | Strong score and strong rent | Tighter coverage, higher scrutiny |
| Owner-occupied 2-4 unit | Buyers who will live in one unit | Occupancy rules apply |
| Conventional investment loan | Buyers who document personal income | Income-based underwriting |
For the full comparison, see Lendmire’s explainer on DSCR versus conventional investment loans. Short-term rentals follow their own rules: purchases to 75% LTV, expect a 640+ score and about 12 months of hosting history.
Is 15% Worth It? A Decision Framework
It is worth it when cash preservation matters and the rent is strong. Putting less down keeps money for repairs, reserves, and the next deal. The cost is a larger loan, a heavier payment, and stricter credit and coverage expectations.
Two rules of thumb help. First, if the property passes comfortably at 75%-80% LTV, you are choosing 15% for liquidity, not necessity, so check that the reserves are really there. Second, if the property only passes at 15% down, the leverage is likely carrying a weak deal. That is a warning sign.
This one is a genuine judgment call. A first-timer with excellent credit and a high-coverage duplex may be right to keep the cash. A first-timer with a 660 score and a tight ratio is usually better off putting 20%-25% down and sleeping well.
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.
Frequently Asked Questions
Can a first-time landlord get a DSCR loan at all?
Yes. Prior landlord experience is generally not required. What changes is the overlay: credit expectations, reserves, and leverage may tighten, subject to lender guidelines and program terms.
Is there a zero-down DSCR purchase loan?
Not through the network’s standard programs. Borrower equity is part of the structure, and purchase files typically land at 75%-80% LTV, with select programs reaching 85%.
What credit score do I need for 15% down?
Roughly 700 or higher is the typical band for the highest-leverage purchase tiers. A 620 floor exists in parts of the network and most programs want around 660, but those scores generally land at lower leverage.
Does a bigger down payment help the coverage ratio?
Yes. A larger down payment shrinks the loan and the payment, which lifts the ratio. It does not override credit floors, reserve rules, or property eligibility. The strongest files clear both the equity test and the coverage test.
Can I use a DSCR loan on a manufactured home or barndominium?
No. Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs.
Next Step
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. Lendmire is a broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Every file is underwritten individually. This is not a commitment to lend.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 2026).
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Scotsman Guide – Reach real estate investors
2. CFPB – 12 CFR 1026.3 (Reg Z exempt transactions)
3. Compliance Alliance – Reg Z and investment properties
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Putting 15% Down vs. 25% Down on a Short-Term Rental DSCR Loan · How to Get a DSCR Loan on One Unit in a Condotel Building · DSCR vs Conventional Investment Loan for an Airbnb Property
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.