The Quick Read: Most DSCR purchase loans on an investment property take 20%-25% down, which matches the 75%-80% LTV range most programs in Lendmire’s wholesale network use, and no standard program is zero-down. Down payment is set by lender program, not by Virginia law, so the same tiers apply to a Richmond duplex and a Northern Virginia townhouse.
- Typical purchase leverage is 75%-80% LTV, so 20%-25% down.
- A select high-leverage tier reaches 85% LTV (15% down), generally for borrowers around a 700+ score.
- Cash-out refinance tops out around 75% LTV across most of the network.
- Down payment, reserves and closing costs are three separate pools of cash.
- Qualification is subject to lender guidelines, credit approval and property review.
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 lender cares about two tests: enough equity in the deal and enough rent against the payment. Virginia investors need to clear both.
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Run the numbers in Virginia
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.
Lendmire is a broker. It arranges DSCR investor loans through select lenders in a wholesale network covering 41 markets, including Washington, D.C. The figures below come from how those programs are structured day to day, and they change. Every file is reviewed individually.
What Is the Down Payment Range on a Virginia DSCR Purchase?
Most files land between 20% and 25% down. That is the mirror image of the LTV cap: 80% LTV means 20% down, and 75% LTV means 25% down. Which end of the range a file gets depends on credit, coverage ratio, property type and loan size.
Here is how the tiers generally stack on a purchase of an investment property:
| Tier | Typical LTV | Typical down |
|---|---|---|
| Standard, stronger file | Up to 80% | About 20% |
| Standard, tighter file | Up to 75% | About 25% |
| Select high-leverage | Up to 85% | About 15% |
The 85% tier is the exception. It generally wants a score around 700 or higher and a file with no soft spots. Plenty of investors ask for it and don’t get it, so plan on 20%-25% unless a loan officer confirms otherwise.
Market-wide, trade press describes the same picture. Scotsman Guide notes that DSCR requirements vary from lender to lender and that many lenders want a somewhat significant down payment on a purchase. That matches what the network shows. Leverage is a lender decision, not a statewide rule.
Does Virginia Change the Number?
No. The guidelines carry no Virginia-specific LTV overlay, so every Virginia purchase uses the standard tiers above. What changes between a Hampton Roads rental and a Northern Virginia one is the price, which means the same percentage is a different amount of cash. Cash required scales with price. The percentage does not move.
Higher-priced properties also push into larger loan sizes. Standard programs run up to $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Reserves step up on larger loans too, which matters more than the down payment percentage on expensive files.
Why Do DSCR Lenders Want 20% or More Down?
Equity is the lender’s cushion. These loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, and they are not sold to the agencies. Scotsman Guide describes DSCR as a non-QM product for investment properties that cannot go to the government-sponsored enterprises but still has to meet repayment-capacity standards.
In plain terms: the lender is relying on a rental property rather than the borrower’s personal paycheck, so it asks for more skin in the game. That is the trade. Investors who want less cash in the deal usually give up something somewhere else, like a stronger score or a lower loan amount.
Common misread: “DSCR means no money down.” It doesn’t. No standard program is zero-down, and lender-reviewed funds are expected to be the borrower’s own money, with limits on gift funds.
What Moves the Down Payment Up or Down?
Six things shift it, and they stack.
Credit score. A 620 floor exists in parts of the network. Most programs want around 660. A 700+ score unlocks the strongest leverage tiers, including the 85% option. A weaker score generally means a lower LTV cap, which means more down.
Coverage ratio. The DSCR is monthly rent divided by the full monthly obligation: principal, interest, taxes, insurance and any HOA dues. A ratio of 1.00 means rent just covers that payment. Many select programs start at 1.00, and stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted, which usually means more down and more reserves. Both are real options, just different programs.
Property type. Single-family rentals, condos and 2-4 unit properties are all common. Condos and multi-unit properties can carry tighter leverage depending on the program. Manufactured homes (single- and double-wide), log homes and barndominiums are not offered through these programs at any down payment.
Transaction type. A purchase and a refinance carry different ceilings. More on that below.
Loan size. Larger balances generally mean tighter leverage and more reserves.
Short-term rentals. Airbnb-style collateral is treated differently. Purchase leverage tops out at 75% LTV, refinance runs around 70%, and cash-out runs 70%. Expect a 640+ score and about 12 months of hosting history, with a 1.00 coverage floor on purchases and 1.00 on refinances. 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. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How Does a Bigger Down Payment Change the Coverage Ratio?
A larger down payment shrinks the loan, which shrinks the monthly obligation, which lifts the DSCR. That is why a deal that misses at the maximum LTV sometimes clears at a lower one.
Run the numbers on a property priced in the mid-$400,000s. At 80% LTV the file might sit just under 1.00 coverage. Step the down payment to 25% (75% LTV) and the same rent against a smaller payment can land around 1.05x. Same rent, same property, different ratio. That is the lever a loan officer pulls first when coverage is thin. (This is an illustration of direction, not a quote.) Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
There is a limit. More equity never erases a credit floor, a reserve rule, or a property that isn’t eligible. And DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, utilities and capex all sit outside the calculation. Treat the ratio as a qualification test, not a profit forecast.
What Cash Do You Need Beyond the Down Payment?
The down payment is the biggest check, not the only one. Plan for three separate pools:
1. Down payment. The percentage above, applied to the lower of purchase price or appraised value.
2. Closing costs. Lender and title charges, appraisal, prepaid taxes and insurance.
3. Reserves. Reserves are held after funding the down payment and closing costs.
Reserves vary by lender, leverage, loan size and transaction type. They commonly run around 6 months of PITIA. Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived, and loans above that size typically step up to about 9 months. Reserves cannot double as the down payment. Same dollars can’t be counted twice.
Scotsman Guide lists six months of reserves held in a federally insured U.S. bank among common DSCR terms, which is in line with the network’s usual expectation, though that article is older and directional.
One more file mechanic: the percentage applies to the lower of price or appraisal. If the appraisal comes in short, the lender sizes the loan off the appraised value and the investor covers the difference in cash. Build a cushion in the cash plan for that.
Purchase vs. Refinance: Different Ceilings
Cash-out refinance on a standard rental tops out around 75% LTV across most of the network, and about 6 months of seasoning is the common expectation on a recent purchase. Files that assume seasoning away get kicked back. Rate-and-term refinance can reach higher leverage, up to 85% on an investment property in the verified parameters, but only for qualified files. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Short-term-rental collateral is lower again: roughly 70% on a cash-out, scoped to that property type. For a standard rental, the cash-out ceiling is 75%.
For the full mechanics of pulling equity, see Lendmire’s DSCR cash-out refinance guide.
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.
Where Can the Down Payment Come From?
Documentation is where preventable gaps show up. Lenders generally want to see the funds in the borrower’s or entity’s account, with statements that show where the money came from. Large recent deposits draw questions.
- Own funds: the standard and cleanest path.
- Gift funds: allowed in some programs, but a minimum share from the borrower’s own money is typically required.
- Borrowed funds: rules vary by program, and borrowed money can affect the credit and reserve picture.
- Entity vesting: buying through an LLC is commonly allowed, subject to lender program eligibility, and entity documents go in the file early.
Personal income documents are generally not the focus. The file centers on the lease or rent appraisal, the property appraisal, credit, entity documents if vesting in an LLC, and proof of funds for the down payment and reserves.
What If the Coverage Is Thin?
Expect a trade. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. That usually means a lower LTV cap and more reserves. Scotsman Guide reports that a ratio under 1.0 generally calls for 12 months of reserves, a market-wide observation. In the network, reserves vary by file, so the number depends on the lender and structure.
The practical sequence for a borrower sitting just under the line: raise the down payment, look at a longer term or interest-only period (available through select lenders), or pick a different property. A longer 40-year structure or an interest-only period can lift coverage, and ARM structures exist for investors who want them. Each comes with its own terms.
Key Terms Defined
Down payment: the cash you put toward the purchase price, which equals 100% minus the LTV.
LTV (loan-to-value): the loan amount divided by the lower of purchase price or appraised value.
DSCR: monthly rent divided by the full monthly housing obligation, including principal, interest, taxes, insurance and HOA dues.
Reserves: liquid funds held after closing, measured in months of PITIA.
Seasoning: the minimum ownership period before cash-out is available on a recent purchase.
DSCR vs. Conventional Down Payment
| Factor | DSCR loan | Conventional investment loan |
|---|---|---|
| Income review | Property rent | Personal income |
| Typical down | 20%-25% | Varies by program |
| Closing entity | LLC commonly allowed | Often personal name |
The trade is simple. DSCR skips the personal income review but asks for equity and reserves in return. Lendmire’s comparison of DSCR and conventional investment loans goes through the full side-by-side. The market context is that investor loans made up 28.5% of nonconforming originations, per Scotsman Guide.
For the full picture of how these loans work end to end, see the complete DSCR loans guide.
Frequently Asked Questions
Is zero down possible on a DSCR loan?
No. No standard program is zero-down. Most purchases need 20%-25% down, and a select high-leverage tier reaches 15% down for strong files. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Does the 85% LTV tier apply to every borrower?
No. It is a select tier, generally for borrowers around a 700+ score with a clean file. Most investors should plan on 75%-80% LTV unless a loan officer confirms the higher tier for their specific file.
Can closing costs or reserves count toward the down payment?
No. They are separate pools. Reserves are held after the down payment and closing costs are funded, so the same dollars cannot be counted twice.
Is the down payment different for a short-term rental in Virginia?
Yes. Purchase leverage tops out at 75% LTV on short-term-rental collateral, so plan on at least 25% down, plus a 640+ score and about 12 months of hosting history. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does the down payment drop on a refinance?
It reverses: equity requirements are measured as LTV. A cash-out on a standard rental tops out around 75% LTV, meaning the investor keeps about 25% equity in the property, and about 6 months of seasoning is common on a recent purchase. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
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. Programs change, qualification is subject to lender guidelines. This is not a commitment to lend. Tax treatment varies; consult a qualified professional.
Virginia pricing runs from modest Hampton Roads and Richmond rentals to Northern Virginia, and the percentage stays the same across all of them, so the cash check is what grows with the price tag.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide — Reach Real Estate Investors by Becoming an Expert in These Loans
2. Scotsman Guide — Invest in Your Future
3. Scotsman Guide — Did Your Client Catch the Real Estate Investment Bug?
4. Scotsman Guide — Investor-Owned Homes Surge as Brokers Pivot to Nonconforming Loans
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 Qualify a Suburban Florida Airbnb on a DSCR Loan · DSCR Loan Down Payment: 20% vs. 25% at Purchase and What Shifts · Putting 15% Down vs. 25% Down on a Short-Term Rental DSCR Loan
Guides: DSCR Loans in Virginia
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.