The Quick Read: The down payment is the purchase price minus the maximum loan-to-value the program allows, and on a second home that cap varies by scenario. On a purchase up to $1,000,000, the best tier means 15% down, available through select wholesale programs and subject to full underwriting. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
- Leverage on a second-home purchase steps down with loan size: 85% to $1,000,000, 80% from $1,000,000 to $2,500,000, 75% from $2,500,000 to $3,000,000, then 65% from $3,000,000 to $4,000,000.
- Above $4,000,000, every second-home file is reviewed case by case before submission.
- Deposits set payment capacity. They do not shrink the percentage down.
- The down payment, closing costs, prepaids and escrow funding, and reserves are four separate buckets of cash.
- Second homes are one-unit only, and a property you plan to rent may not qualify as a second home.
How Is the Down Payment Actually Set?
The matrix sets it, not your income. Across the wholesale network, each program publishes a maximum LTV by occupancy, transaction type, loan size and credit score. Price minus the maximum loan is the cash you bring. Strong deposits prove you can carry the payment. They do not buy more leverage.
Two things move the number most: loan size and credit. A second-home purchase at $300,000 to $1,000,000 tops out at 85% with a 700 score. Between $1,000,000 and $1,500,000 the cap drops to 80%, and the credit score for that cell is 680. From $2,500,000 to $3,000,000 it is 75% with a 720 score. From $3,000,000 to $4,000,000 it is 65% with a 760 score. Those are ceilings, not promises. Underwriting can land below them.
Leverage on these files is credit policy set by each investor, which is why programs differ and why a broker who sees many ladders can find a better fit than any single lender’s page.
What Does the Second-Home Ladder Look Like by Loan Size?
Second-home leverage falls as the loan grows. These are purchase ceilings through select wholesale programs, subject to underwriting.
| Loan size | Max purchase LTV | Credit for this leverage | Down at the best tier |
|---|---|---|---|
| $300K–$1M | 85% | 700+ | 15% |
| $1M–$2.5M | 80% | 680–720+ | 20% |
| $2.5M–$3M | 75% | 720+ | 25% |
| $3M–$4M | 65% | 760+ | 35% |
| $4M–$5M | 65% (on review) | 760+ | 35% |
| $5M–$10M | 55% (on review) | 680+ | 45% |
| $10M–$30M | 50% (on review) | 680+ | 50% |
Read the table as a floor on cash, not a quote. Every band above $4,000,000 is reviewed case by case before submission, so no figure in those rows is a flat ceiling.
Rate-and-term refinances run a touch lower in a few bands, and cash-out runs lower again. On a second home, cash-out tops out at 75% on loans to $2,000,000.
The ladder sits five points below a primary residence at most sizes. A primary purchase to $1,000,000 can reach 90%. A second home stops at 85%. The gap is the price of the occupancy class.
Above $3,000,000 on a second home, extra overlays apply: a 700 credit floor, a 0x30x24 housing history, 48 months of seasoning after any credit event, U.S. citizens and permanent residents only, no non-occupant co-borrowers, and no rural property. Cash-out proceeds cannot count toward reserves.
Second Home vs. Investment Property: Where Does the Line Sit?
Occupancy decides which ladder applies. At smaller sizes the second-home and investment ladders match: 85% on a purchase to $1,000,000. They split as the loan grows. Between $3,000,000 and $4,000,000 a second home purchase tops out at 65% with a 760 score, while an investment purchase tops out at 60% with a 680 score. The second home gets slightly more leverage but demands stronger credit.
The label is not a choice you make for convenience. A second home is one unit, held for your own use. If you plan to rent it, the file may belong on the investment ladder.
Lenders apply their own occupancy definitions, such as personal use and exclusive control. The IRS tax test for a dwelling used as a home, which turns on 14 days or 10% of days rented, is a different test for a different purpose. Passing one does not satisfy the other. Misstating occupancy to win a lower down payment is a material misrepresentation risk on the file. Don’t do it.
Rental income on a second home generally can’t be used to qualify under a bank statement program. The file runs on your deposits alone. If the property will really be a rental, compare it against a DSCR structure, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide lays out that path.
Worked Examples: Cash Needed at Three Price Points
Run the percentages, then price the cash buckets separately. These are modeled assumptions at the best credit tier, through select wholesale programs, subject to underwriting.
- $900,000 second home, purchase. The cap is 85%. You bring 15% down at the best tier.
- $1,800,000 second home, purchase. The cap is 80% with a 700 score. You bring 20% down.
- $3,500,000 second home, purchase. The cap is 65% with a 760 score. You bring 35% down, and the super-jumbo overlays apply. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Now a low appraisal. The accepted value is the lesser of price or appraised value. If the $1,800,000 house appraises light, the loan is 80% of the lower figure, and you cover the gap in cash. A single-family second home gets a standard appraisal.
What Else Counts as Cash to Close?
Four buckets, and the down payment is only one. Closing costs are the second. Prepaids and escrow funding are the third. Reserves are the fourth. Every bucket has to come from verified funds. Reserves run 3 months on loans to $500,000, 6 months to $1,500,000, and 9 months above, plus 2 months for each additional financed property, to a 12-month maximum. First-time investors hold 12 months. Reserves sit on top of the down payment.
Reserves must come from your own verified funds. Cash-out proceeds on a super-jumbo file can’t be counted toward them.
Where Can the Down Payment Come From?
Savings, brokerage liquidations and net proceeds from a sold property work. Net proceeds count, not the sale price. Large deposits need an explanation. Gift funds and business funds carry their own rules, covered in Lendmire’s piece How to Source a Down Payment on a Second-Home Bank Statement Loan.
One interaction catches borrowers. Money pulled from a business account for the down payment can lower the deposits counted toward income. Plan the order of transfers before you move cash.
How Does Income Qualify Alongside the Down Payment?
Income and equity are two separate tests. Qualifying income comes from 12 or 24 consecutive months of personal or business bank statements, an approach HousingWire’s non-QM guide also describes, including the expense factor applied to business deposits. Business statements need at least 25% ownership. The lender takes eligible deposits, applies an expense ratio, and divides by the statement months. The expense ratio depends on the type of business and how many employees it has, with service businesses that have no employees carrying the lowest ratio and product businesses or larger staffs carrying the highest. An accountant-provided ratio is an option, and so is a profit-and-loss method that is capped.
Transfers from your own business into your personal account count at 100%. Credit starts at a 660 floor on the portfolio program, with debt-to-income up to 50%. Most files also need a higher score to reach the better leverage cells above.
Asset paths exist too. An asset allowance divides liquid assets by 36, 60 or 84 months and works on primary and second homes only. Assets-only qualification needs liquidity equal to the loan plus closing costs. Retirement accounts count at 70%, or 80% at age 59½ and up. Business funds, gifts and cryptocurrency never count toward that liquidity.
Non-QM does not mean no verification. The CFPB’s ability-to-repay and qualified mortgage compliance guide says a creditor must consider eight underwriting factors and verify the information it relies on. It also says the rule does not set comprehensive underwriting standards, so no federal rule sets a down payment here. Underwriting is individual, and none of this is a commitment to lend.
How Do You Lower the Cash You Need?
Credit is the first lever. Several leverage cells require 700, 720 or 760, so a higher score can move you into a better cell. Deposit consistency helps income hold up. A CPA-prepared expense ratio can beat a fixed one for an owner with thin overhead. Staying under a size breakpoint can raise the allowed LTV: a second-home purchase at $950,000 allows 85%, while one at $1,100,000 allows 80%.
Choose the occupancy class honestly, and shop programs. A broker sees many ladders. A few wholesale lenders will allow more leverage in one band and less in another, so the best fit changes with price and credit. 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.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the lesser of price or appraised value.
Second home: A one-unit property you occupy for part of the year and control exclusively.
Expense ratio: The share of business deposits removed before the remainder counts as income.
Seasoning: The time funds or a credit event must sit on record before they count.
Reserves: Verified liquid funds held after closing, separate from the down payment.
Common Mistakes That Derail the File
- Assuming strong deposits lower the percentage down. They don’t.
- Treating a rental plan as a second home.
- Pulling the down payment from a business account without checking the income hit.
- Forgetting reserves and closing costs when counting cash.
- Quoting the 85% cell for a loan that sits in the 80% band.
- Missing the 5-point drop from primary-residence leverage.
Frequently Asked Questions
Is 10% down possible on a second home with a bank statement loan?
Not through the wholesale programs described here. The best second-home purchase cell is 85% LTV, so 15% down, up to $1,000,000 with a 700 score. Primary residences can reach 90% in that band, so second homes sit five percentage points lower. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Does a bigger income reduce the down payment?
No. Income sets payment capacity and LTV sets the cash. A higher deposit average can help you qualify for the payment, but the leverage ceiling comes from loan size, occupancy and credit.
What happens if the appraisal comes in low?
The loan is sized off the lesser of price or appraised value, so the gap comes out of your cash. Budget a cushion above the stated percentage down if the market is moving.
Can I rent the property and still call it a second home?
Usually not. A second home is one unit held for personal use, and lenders apply their own occupancy tests. If rental is the plan, the file may fit the investment ladder or a DSCR loan instead.
Do larger loans always need more down?
Yes, on a second home. Leverage falls from 85% to 65% by $3,000,000, and above $4,000,000 each file is reviewed case by case before submission.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a broker arranging financing through select lenders in its wholesale network, and consumer lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, WA.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
2. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is a Super Jumbo Bank Statement Loan Available in California? · How Much Can Founders Borrow With a Bank Statement Loan? · How to Qualify for a Bank Statement Loan as a Contractor or Builder
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.