The Quick Read: Usually 20% to 25% on a rental purchase, because most programs in Lendmire’s wholesale network cap purchase leverage at 75% to 80% loan-to-value (LTV). Maryland sets no state-specific down payment rule for these loans, so the number depends on the borrower, the property, and the lender.
- Typical purchase leverage runs 75%–80% LTV, which means 20%–25% down.
- Select high-leverage programs reach 85% LTV (15% down), generally with a score near 700 or higher.
- Credit floors vary by scenario in parts of the network; most programs want around 660.
- Reserves commonly run about 6 months of PITIA, stepping up to about 9 months on loans above $1,500,000.
- Maryland changes your cash to close through transfer and recordation taxes, not through the down payment itself.
All of this is subject to lender guidelines, and none of it is a commitment to lend.
DSCR Calculator
Run the numbers in Maryland
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 Actually Sets the Down Payment?
The down payment is the purchase price minus the maximum loan the program allows. A program that allows 80% LTV on a purchase asks for 20% down. A program that allows 75% asks for 25%. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Across the wholesale network, four things move that cap:
- Credit score. Higher scores unlock higher leverage tiers. A 700+ score opens the strongest tiers.
- Rental coverage. Stronger coverage supports better leverage and pricing.
- Property type. Single-family rentals generally get the cleanest terms. Condos and 2–4 unit properties can carry tighter caps.
- Loan size and purpose. Purchases, rate-and-term refinances, and cash-outs each have their own ceilings.
LTV applies to the lesser of the purchase price or the appraised value. A low appraisal raises the cash you need at the table. Say a Maryland rowhouse is under contract above what the appraiser supports. The loan shrinks to match the appraisal, and the gap lands on the buyer.
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 is why equity requirements often run higher than owner-occupied programs. The lender is leaning on the property’s rent instead of your personal income, so it wants more of your own money in the deal. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. For the full picture, see Lendmire’s complete DSCR loans guide.
The Down Payment Matrix
Here is how the main variables line up across most programs in the network. Every row is a typical range, not a promise.
| Scenario | Typical max LTV | Typical down payment |
|---|---|---|
| Standard rental purchase | 75%–80% | 20%–25% |
| Strong-credit high-leverage purchase | up to 85% | about 15% |
| Short-term rental purchase | up to 75% | 25% or more |
| Cash-out refinance, standard rental | about 75% | 25% equity retained |
| Cash-out refinance, short-term rental | about 70% | 30% equity retained |
Two notes on that table. First, a refinance has no down payment. The equivalent is the equity you leave in the property. Second, the 85% tier is a select program, not the default. Plan around 75%–80% unless your file clearly fits the high-leverage tier.
Does Maryland Change the Number?
No. Maryland has no state overlay on DSCR leverage, so a Baltimore rowhouse and an Eastern Shore rental start from the same purchase tiers. Where Maryland matters is the rest of the closing budget.
The state transfer tax is 0.5%, according to the Maryland State Department of Assessments and Taxation transfer form. Recordation tax and local transfer tax vary by county and by Baltimore City. Who pays which piece is largely a matter of contract and local custom. The reduced first-time-buyer transfer tax is meant for a principal residence, so an investor buying a rental should not count on it.
The practical takeaway: budget the down payment, then add closing costs and county-level taxes on top. Confirm current local rates with the county or SDAT before you set a final cash figure.
Down Payment Is Not Cash to Close
Three separate buckets drain your account on a purchase:
1. The down payment itself.
2. Cash to close: lender fees, appraisal, title, recording, prepaids, and escrows.
3. Reserves: liquid funds the lender wants left over after closing, commonly around 6 months of PITIA.
Reserves vary by lender, leverage, loan size, and transaction type. 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. Expect to show credit authorization and about two months of bank statements to verify funds, though documentation varies by lender.
An investor who puts every spare dollar into the down payment can fail the reserve test. That is a common way a strong deal stalls.
How a Bigger Down Payment Helps Coverage
DSCR divides monthly rent by the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. Put more down and the loan shrinks, so the monthly obligation falls and the ratio rises.
Picture a Maryland rental that lands at roughly 0.95x with 20% down. Moving to 30% down could lift it past 1.00x. That is a legitimate lever. It can improve pricing and eligibility. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
It has limits, though. A larger down payment never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
One more point that trips investors up. Clearing 1.00x is not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Run your own cash-flow budget separately.
Coverage Below 1.00 and What It Does to Equity
The 1.00 level is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. In practice that means a larger down payment than the standard tiers.
Is it worth using? That depends on the story. If the property has a clear rent-growth or value-add case, a lower leverage structure can be a sound choice. If you are reaching below 1.00 on every property you look at, the better fix is usually a different submarket, not a different loan.
No-ratio structures also exist, but only through select lenders and generally for borrowers who already own a primary residence.
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 Rent Gets Established
The lender needs a defensible rent figure. For a one-unit property, the appraiser typically completes a rent schedule, which Fannie Mae identifies as the Single-Family Comparable Rent Schedule (Form 1007). For 2–4 units, the appraisal uses the Small Residential Income Property Appraisal Report (Form 1025), listed on the same page. These are simply the appraisal forms. Agency lending rules do not govern DSCR loans, and each lender in the network sets its own guidelines.
Where the Money Can Come From
Equity must be real. Cash-out proceeds from another property can fund a down payment. That is a funding source, not a no-money-down loan. There is no zero-down DSCR product.
Buying through an LLC is common with these loans, subject to lender program eligibility. Make sure the funds sit in an account the lender will accept for the entity or the individual guarantor.
Common Mistakes
- Assuming 20% is universal. It is a common benchmark, not a rule. Credit, coverage, and property type all move it.
- Forgetting the appraisal gap. LTV uses the lesser of price or value.
- Spending reserves on the down payment. Leave room for both.
- Counting on a first-time buyer tax break. It does not apply to a rental.
- Treating a 1.00x ratio as profit. It only means rent covers PITIA.
- Targeting ineligible property. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the lesser of price or appraised value.
DSCR (debt service coverage ratio): Monthly rent divided by the monthly PITIA obligation.
PITIA: Principal, interest, taxes, insurance, and association dues.
Reserves: Liquid funds left after closing to cover payments if rent stalls.
Cash to close: Down payment plus fees, taxes, and prepaid items.
A Quick Self-Check
1. Pick the likely tier: 75%–80% LTV for most purchases, 75% for a short-term rental purchase. 2. Convert it to a down payment percentage, then run it through the calculator for an illustrative estimate. 3. Add closing costs and Maryland county transfer and recordation taxes. 4. Set aside about 6 months of PITIA in reserves. 5. Check coverage. If it falls short, test a larger down payment before changing strategy.
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.
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. Reach the team at 828-256-2183 or request a quote.
Frequently Asked Questions
Can I buy a Maryland rental with no money down using a DSCR loan?
No. Every DSCR purchase requires borrower equity. Cash-out proceeds from another property can supply that equity, but the down payment still has to come from somewhere.
Can the down payment ever be as low as 15%?
Sometimes. Select high-leverage programs reach 85% LTV on a purchase, which means 15% down, generally for borrowers with scores around 700 or higher. Most files land at 20%–25% down, and eligibility depends on the property and lender review.
Does a short-term rental need more down?
Typically, yes. Short-term rental purchases top out at 75% LTV, so expect 25% or more down. Lenders also want a 640+ score and about 12 months of hosting history.
Is the down payment the same as cash to close?
No. Cash to close adds lender fees, appraisal, title, recording, prepaids, escrows, and Maryland transfer and recordation taxes. Reserves are separate again.
What if my property covers less than 1.00x?
That path is available through select lenders in the network, with leverage and terms adjusted. Expect a larger down payment than the standard tiers.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Maryland State Department of Assessments and Taxation transfer form
2. Fannie Mae – Appraisers & 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: No-Ratio DSCR Loan vs Delayed Financing: Which Fits? · How Much Capital Each Additional DSCR Purchase Requires · How Much You Can Borrow for a No-Ratio DSCR Loan for LLC-Titled Borrowers?
Guides: DSCR Loans in Maryland
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.