Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
The Quick Read: Yes, but only through a narrow tier of high-leverage programs that reach 85% loan-to-value (LTV) on a purchase, typically for borrowers with a score around 700 or better and rent that clears the coverage test with room to spare. Most DSCR purchases across the network land at 20%–25% down. Treat 15% as a conditional exception, not the standard, and expect it to be subject to lender guidelines.
- 85% LTV on a purchase means 15% down, and it exists only on select high-leverage programs.
- Most files land at 75%–80% LTV, which is 20%–25% down.
- Credit around 700+ unlocks the strongest leverage tiers.
- More leverage means a bigger payment, so the rent has to work harder.
- Cash-out refinances top out near 75% LTV, so the 15% tier is a purchase tool.
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Plenty of investors hear “DSCR” and assume the down payment is flexible. It isn’t. Equity is the first test. Rental coverage is the second. Here is how both work, where 15% fits, and when you should put more down anyway.
What Does 15% Down Actually Mean on a DSCR Loan?
The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
It means a purchase at 85% LTV. LTV, or loan-to-value, is the loan balance divided by the property’s value or price. Put 15% down and the loan covers the other 85%. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
A DSCR loan is a business-purpose investor loan. DSCR stands for debt service coverage ratio. It compares the property’s monthly rent to its full monthly housing obligation, known as PITIA: principal, interest, taxes, insurance, and any HOA dues. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. For the full picture, see the complete DSCR loans guide.
Across the wholesale network of lenders Lendmire works with, the pattern is consistent. The broad middle sits at 75%–80% LTV. A handful of programs stretch to 85%. Because these are non-QM loans (loans outside standard government-backed lending rules), no federal rule sets the number. Each lender or investor sets its own ceiling. That is why one lender says 15% is possible and the next says 25%. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Market surveys back up the range. TurboTenant puts general investment-property down payments at 15%–30%. That is a market-wide statistic. For the network, the figures are the ones above: 75%–80% on most purchases, 85% on select programs.
Who Gets the 15% Tier?
Borrowers with strong files. The 85% tier is not a discount for everyone. It is a reward for low-risk profiles.
Here is what the strongest 15% files tend to share:
- Credit around 700 or higher. A 620 floor exists in parts of the network, and most programs want around 660. The highest leverage tiers want 700+.
- Coverage with cushion. Many select programs start at 1.00 coverage. At 85% leverage, the property usually needs to clear that line comfortably. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
- A purchase, not a cash-out. The high-leverage tier is a purchase product. Cash-out refinances top out around 75% LTV across most of the network.
- Eligible property type. A single-family rental is the cleanest fit. More on property types below.
- Reserves in the bank. Reserves are cash left over after closing. They vary by lender, leverage, loan size, and transaction type, commonly around 6 months of PITIA. Loans above $1,500,000 typically step up to about 9 months.
Miss one of these and the lender can pull leverage back to 80% or 75%. That isn’t a rejection. It is the grid doing its job.
Why More Leverage Tightens the Rent Test
Less down means a bigger loan. A bigger loan means a bigger payment. The rent has to cover more.
Run it as a thought experiment. Take one property with one rent. At 75% LTV, the coverage ratio might land comfortably above 1.2x. Move the same property to 85% LTV and the loan grows by roughly an eighth, so coverage drops, though the exact figure depends on the loan terms. Same rent. Same house. Tighter number. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
That is why coverage, not the leverage cap, often sets your real down payment. A lender may offer 85% on paper, but if the rent only supports 1.0x at 75%, the 85% request won’t clear. Investors in high-price, low-rent markets hit this wall constantly. The reverse is also true. A larger down payment lowers the monthly payment and can lift the ratio, which is why some investors put more down to unlock better terms.
The grid works like this: maximum LTV moves with credit score, coverage band, loan size, occupancy, and transaction type. It is never one flat number. Stronger coverage opens better pricing and more leverage. Weaker coverage trims both.
One distinction matters here. Clearing 1.00 does not mean the property cash flows. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A deal can pass the lender’s test and still lose money after real-world costs. Run your own numbers before you chase a high-leverage tier.
How Does 15% Down Compare Across Property Types?
Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Leverage shrinks as the property gets harder to underwrite. A single-family rental gets the most room. Other types often get less.
| Property type | Typical leverage effect |
|---|---|
| Single-family rental | Most room for high leverage |
| 2–4 unit | Often capped lower |
| Condo | Often capped lower |
| Short-term rental purchase | Up to 75% LTV |
| Manufactured, log, barndominium | Not offered |
Short-term rentals deserve their own line. On a purchase, STR leverage tops out at 75% LTV, so 15% down is off the table. Expect a 640+ score, about 12 months of hosting history, and a 1.00 coverage floor on purchases. For refinances, STR runs around 70%, with a 1.00 floor as well. 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.
Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs at any leverage.
If you are weighing 15% down specifically on a short-term rental, Lendmire’s piece Putting 15% Down vs 25% Down on a Short-Term Rental DSCR Loan covers that decision in detail. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Does the Total Cash to Close Look Like?
The down payment is only part of the cash you need. Budget for four buckets:
1. The down payment itself. 15% of the price on the high-leverage tier, 20%–25% on most files.
2. Closing costs. Lender, title, appraisal, and related fees.
3. Prepaids and escrows. Taxes and insurance paid upfront.
4. Reserves. Cash held back after closing, commonly around 6 months of PITIA.
Lenders also want to see where the down payment came from. Funds generally need to be sourced with recent bank statements. Gift funds, where allowed, usually require a meaningful contribution from your own money, and a gift can’t cover the whole down payment.
Equity recycling is the cleaner route for many investors. Cash-out proceeds from another property can fund a new down payment. The cash-out refinance tops out around 75% LTV, with about 6 months of seasoning as the common expectation. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Is 15% Down Worth It?
Program terms are subject to lender guidelines and a full review of property, leverage, and credit.
Sometimes. It depends on what you value more: cash preserved or cushion in the coverage ratio.
Choose 15% down when:
- Your credit sits comfortably in the 700+ range.
- The rent clears the coverage test with room to spare, not by a hair.
- Keeping capital free lets you buy a second property you’d otherwise miss.
- You have reserves beyond the minimum.
Choose more down when:
- Coverage lands right at 1.00 at 85% LTV.
- Your score sits near the 660 range, where leverage tiers tighten.
- The market has thin rent-to-price ratios, so each point of leverage squeezes the ratio.
- You want a bigger buffer against vacancy and repairs, which the DSCR test ignores.
Preserving capital is the real appeal. Lower down payments let you spread cash across more purchases. But that stacks more fixed payments onto your portfolio, and each one has to be fed whether the unit is full or empty. This one is a genuine tradeoff. Some investors would rather own two properties at 85% leverage. Others would rather own one at 75% and sleep better. Neither is wrong, but the second has more margin when a roof fails.
Pricing also tends to move with leverage and coverage. Higher leverage generally comes with tighter terms. Weigh that cost against the cash you keep.
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.
What If the Numbers Don’t Work at 15%?
You have options. Work through them in this order.
Put more down. Moving from 85% to 80% or 75% LTV shrinks the loan and lifts coverage. Often this alone fixes the file.
Look for stronger rent support. The lender determines acceptable rent from an appraiser’s market rent schedule or a lease, based on program rules. A property with a better rent profile changes the math.
Change the structure. Select lenders in the network offer interest-only periods and extended terms such as 40-year amortization. These can lift coverage because the payment shrinks. The standard spine is the 30-year fixed, and ARM structures exist for investors who prefer them. Availability varies by lender.
Consider a sub-1.00 path. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Don’t count on 85% LTV here. Expect lower leverage.
Pick a different property. Sometimes the cleanest fix is a house with a better rent-to-price relationship.
Look at owner-occupied options if you’ll live there. Low-down-payment programs for primary residences require owner occupancy, so they don’t apply to a pure rental. Nav notes that house-hacking strategies, where you live in one unit, can go lower than true investor loans. Once you move out, a pure rental purchase usually shifts to DSCR financing.
Common Misconceptions
“DSCR means no money down.” No. DSCR loans require real equity. Even the high-leverage tier asks for 15% in cash, plus closing costs and reserves.
“15% is the standard.” It isn’t. Most purchases land at 20%–25% down. The 15% tier is conditional on credit, coverage, and property type.
“Credit doesn’t matter since there’s no personal income check.” Credit and coverage are the two main qualifiers. A 620 floor exists in parts of the network, but the best leverage wants 700+.
“Rent equals qualifying income.” The lender decides the acceptable rent. And rent covering PITIA is not the same as cash flow.
“Every lender offers 85%.” Far from it. Many programs cap at 75%–80%, which is why a wholesale network matters. A broker can compare many lenders’ grids instead of one.
Key Terms Defined
DSCR (debt service coverage ratio): Monthly rent divided by the full monthly payment on the property.
LTV (loan-to-value): The loan amount as a percentage of the property’s price or value.
PITIA: Principal, interest, taxes, insurance, and any HOA dues, the full monthly housing obligation.
Non-QM: A loan that falls outside standard government-backed lending rules, so each lender sets its own guidelines.
Reserves: Liquid cash you keep after closing, measured in months of PITIA.
Seasoning: The waiting period a lender wants between buying a property and refinancing it.
Frequently Asked Questions
Can I use a DSCR loan to buy a rental with less than 15% down?
Not through the standard network programs. Fifteen percent is the practical floor on a purchase. DSCR loans require real equity, and a lower figure isn’t part of the typical grid. 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.
Does 15% down work on a cash-out refinance?
No. Cash-out refinances top out around 75% LTV across most of the network, with about 6 months of seasoning as the common expectation. The 15% tier is a purchase product. If you already own the property and want cash out, plan around the lower ceiling.
What credit score do I need for 15% down?
Roughly 700 or higher on the strongest high-leverage programs. A 620 floor exists in parts of the network, and most programs want around 660, but those scores generally land at lower leverage. Every file is underwritten individually, subject to lender guidelines.
Will 15% down hurt my coverage ratio?
Yes. A bigger loan means a bigger payment, so the same rent produces a lower ratio. Many select programs start at 1.00, so a thin property can fail at 85% LTV and pass at 75%. Run the rent against the full payment before you pick a leverage target.
Can I buy in an LLC with 15% down?
Often yes, subject to lender program eligibility. Many investors buy through an entity, and the 15% tier follows the same credit, coverage, and reserve tests. Confirm the entity structure with the lender before you contract.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire, a mortgage broker arranging DSCR financing through select lenders across 41 markets including Washington, D.C., 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. Programs change and every file is underwritten individually. This is not a commitment to lend.
The investors who get the most from a thin down payment are the ones who tested the rent first and the leverage second.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. TurboTenant: Down Payment for Investment Property
2. Nav: Investment Property Loans With Low Down Payments
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Down Payment a DSCR Loan Requires at Purchase · How to Buy a Distressed Short-Term Rental Out of State With DSCR · How to Switch a Cabin Rental DSCR Loan to Long-Term Rent
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.