The Quick Read: Usually 20% to 25% down on a standard one-to-four-unit rental, because most programs in Lendmire’s wholesale network cap a purchase at 75% to 80% loan-to-value, and select high-leverage programs reach 85% loan-to-value (15% down) for borrowers with roughly a 700 score or better.
- No DSCR purchase program offers zero down. Your minimum down payment is 100% minus the maximum loan-to-value your file earns.
- Single-family and small multifamily sit in the 20%–25% band on most files.
- Short-term rentals top out at 75% loan-to-value on a purchase, so plan for at least 25% down.
- Condos with project problems, 5–8 unit buildings and mixed-use properties generally need more equity, and the number varies by lender.
- Manufactured homes, log homes and barndominiums are not offered in these programs.
What “Minimum Down Payment” Really Means Here
The minimum down payment is the purchase price (or the appraised value, if lower) times 100% minus the maximum loan-to-value. If a program caps leverage at 75%, you bring at least 25%. That is the whole formula. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
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.
The cap is not one national number. DSCR loans are not agency products, so no regulator sets the minimum. Each lender in the wholesale network sets its own limits. Because Lendmire places files across many lenders, you can see the pattern: the same property can carry a different cap depending on who reviews it.
Two tests run side by side, and the stricter one controls:
1. The leverage cap. This is the highest loan-to-value the program allows for your property type, credit score and loan size.
2. The coverage test. The lender compares the property’s rent to its full monthly obligation. Per Stessa’s DSCR walkthrough, lenders use that ratio to size how much a property can carry.
In expensive markets the second test often binds first. Rent may not cover the payment on a high-leverage loan. A larger down payment then becomes the lever that makes the deal work.
Key Terms Defined
DSCR (debt service coverage ratio): monthly rent divided by the full monthly housing obligation on the property. A 1.00 means rent equals that obligation.
LTV (loan-to-value): the loan amount as a percentage of the price or appraised value, whichever is lower.
PITIA: principal, interest, taxes, insurance and association dues. It is the payment the rent is measured against.
Reserves: liquid savings, usually counted in months of PITIA, that you hold after closing.
Warrantable condo: a condo project that meets standard project-eligibility tests, such as limits on how many units investors own.
Seasoned funds: money that has sat in your accounts long enough to be documented as yours.
The Property-Type Table
Here is how the minimum shakes out across the network on a purchase. Treat these as typical ranges from select lenders, subject to lender guidelines, credit approval and property review.
| Property type | Typical minimum down | What moves it |
|---|---|---|
| Single-family (1 unit) | 20%–25%; select programs 15% | Credit near 700+, strong coverage |
| 2–4 units | 20%–25%; select programs 15% | Coverage, credit, loan size |
| Warrantable condo | Usually the 1–4 unit band | Project reserves, investor concentration |
| Non-warrantable condo or condotel | More than standard; lender-specific | Project failures, hotel-style rules |
| Short-term rental | At least 25% on a purchase | Hosting history, 640+ score |
| 5–8 units, mixed-use | More equity; lender-specific | Commercial share, loan size |
| Manufactured, log, barndominium | Not offered | Ineligible in these programs |
Notice that “15% down” appears in the table only as a select-program exception. It needs a stronger file, so do not build your budget around it. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
One-to-Four Units: Where Most Deals Live
Single-family homes, duplexes, triplexes and fourplexes share the most common leverage band. Most files land at 75% to 80% loan-to-value on a purchase, which means 20% to 25% down.
Credit is the first dial. A 620 floor exists in parts of the network, most programs want around 660, and 700 or higher opens the strongest leverage tiers. Coverage is the second dial. Stronger ratios open better pricing and leverage.
Does a duplex cost more down than a single-family home? Not always. Some lenders treat them almost the same. Others step the cap down a notch as unit count rises. Since lenders differ, the honest answer is to check the specific property against several programs.
Moving from 75% to 80% loan-to-value also changes pricing on many programs. More leverage buys you cash retention, and it usually costs you somewhere else in the terms.
Condos: The Project Matters as Much as the Unit
A lender reviewing a condo is also reviewing the building. A warrantable project generally keeps you in the standard band. A non-warrantable project tends to push you toward the conservative end or beyond it.
Lenders in the network borrow their project tests from the agency world. Freddie Mac’s project eligibility rules list ineligible projects and cap how much of a building one investor can own. Heavy investor concentration, thin association reserves, pending litigation and short-term rental allowances are the usual triggers.
Condotels, the hotel-style condos, form their own category with their own rules. Get the project’s budget, reserve and litigation details before you write an offer. A building that fails review can change your required cash after you are already under contract.
Short-Term Rentals Need More Equity and More Proof
Short-term rental purchases run up to 75% loan-to-value, so the minimum down is 25%. Expect a 640+ score and about 12 months of hosting history. The coverage floor on a purchase is 1.00.
The reason is income volatility. AirDNA’s DSCR guide explains why variable rental income draws extra lender scrutiny, and that matches what the network does in practice. Rules for short-term rentals can vary by city, county, HOA and property type, so confirm local rules before you rely on projected rental income.
Short-term rental refinances and cash-outs carry lower ceilings than a purchase, so do not carry a purchase number into a refinance conversation.
Five or More Units and Mixed-Use
Once a building passes four units, it leaves residential-style underwriting and starts to look like a commercial property. Eligibility depends on the lender, and the commercial share of a mixed-use building is usually limited.
Expect to bring more than the standard 20%–25%. How much more depends on the building, the loan size and the lender. These files also tend to want more reserves. The honest practitioner answer is that this category has the widest spread between lenders, so shopping it matters most here.
For loan sizes up to $3,000,000 on standard programs, the network generally works the same way. Above $2,500,000, it generally holds to 30-year fixed structures.
Stacking: When Two Conditions Collide
Each factor can lower your cap, and the lowest one wins. A strong score does not rescue a short-term rental from its 75% ceiling. Strong credit also cannot offset thin rent coverage on a condo with project issues.
| If this is true | The usual effect |
|---|---|
| Credit near the floor | Lower leverage tier |
| Coverage at the minimum | Less room for high leverage |
| Property type is less common | Equity requirement rises |
| Loan size grows | Reserve requirement can rise |
A larger down payment lowers the monthly payment and can lift the DSCR. It never erases leverage caps, credit floors, reserve rules or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Coverage below 1.00 deserves its own sentence. 1.00 is where many select programs start, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. No-ratio structures exist only through select lenders, generally for borrowers who already own a primary residence. Both paths usually mean more cash down, not less.
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.
Cash to Close Is Bigger Than the Down Payment
The down payment is the largest cash outlay, but it is not the whole bill. Closing costs and prepaid items come on top. Reserves sit on top of that.
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. Loans above that size typically step up to about 9 months.
Plan your total cash around the conservative case, not the best case. Tax treatment varies; consult a qualified professional.
Where the Down Payment Can Come From
Lenders want the money documented, and it should be yours. Savings, business accounts and proceeds from selling another asset are the usual sources. Gift funds and borrowed funds are program-specific, so confirm before you assume either works. Financing the down payment itself, or placing a lien against it, is generally a problem.
Expect to provide asset statements for the down payment and reserves, the purchase contract, a lease or market-rent appraisal, and entity documents if you are buying in an LLC, subject to program eligibility. 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.
Skip the Agency Math
Conventional investor loans follow different rules. The Fannie Mae eligibility matrix allows 85% loan-to-value on a purchase of a one-unit investment property and 75% on a two-to-four-unit investment property. Those caps apply only to loans sold to the agency.
DSCR loans are not agency loans, so those caps do not govern your file. For a full side-by-side, see Lendmire’s complete DSCR loans guide.
Clearing 1.00 Is Not the Same as Cash Flow
DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities and capital expenses sit outside the calculation. A deal can clear 1.00 and still lose money after those costs.
This matters for down payment planning. Putting more down can raise your coverage ratio, but it does not make a thin deal profitable. Run your own operating budget separately before you commit.
A Three-Step Self-Check Before You Make an Offer
1. Name your property type. Single-family, two-to-four units, condo, short-term rental or larger building. Confirm it is not a manufactured home, log home or barndominium.
2. Test the triggers. Check your credit tier, your expected coverage ratio, the condo project’s status and your loan size.
3. Build the cash number. Plan around the higher down payment that applies to your scenario as the safe assumption, then add closing costs and reserves. Treat anything lower as a bonus, not a plan.
For a broader walkthrough, Lendmire’s explainer How Much Down Payment a DSCR Loan Requires at Purchase covers the baseline.
Frequently Asked Questions
Is there a no-money-down DSCR purchase loan?
No. Every DSCR purchase program in the network requires equity, and the minimum is 100% minus the maximum loan-to-value. Primary-residence products with very low down payments are for owner-occupants and are a different product from a DSCR loan.
Does a short-term rental need more down than a long-term rental?
Usually yes. Short-term rental purchases top out at 75% loan-to-value, so you should plan on at least 25% down. You will also need a 640+ score and about 12 months of hosting history. Subject to lender guidelines.
Can I put down 15%?
Sometimes. Select high-leverage programs reach 85% loan-to-value on a purchase, which is 15% down, but they generally want a score around 700 or higher. Most files land at 20% to 25%.
Does a higher DSCR lower my down payment?
It can help. Stronger coverage opens better pricing and leverage tiers. It will not lift you past the cap for your property type or credit tier, though.
Does the minimum change by state?
No state-specific leverage overlay applies in the network, so every state takes the standard purchase tiers. Individual files are still underwritten one at a time.
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 mortgage broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 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. Stessa: Debt Service Coverage Ratio in Real Estate
2. Freddie Mac Seller/Servicer Guide, Section 5701.3
3. AirDNA: Debt Service Coverage Ratio in Real Estate
4. Fannie Mae Eligibility Matrix
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Second Home vs DSCR Loan for a 2-4 Unit Airbnb Property · How to Qualify for a Super Jumbo DSCR Loan in Washington · How a Luxury Rental DSCR Loan Works in Whitefish
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
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.