The Quick Read: Usually 20% to 25% down on a purchase, which matches the 75% to 80% loan-to-value caps that most programs in our wholesale network use, because your down payment is the price minus whatever the program lets you borrow. Washington investors face the same tiers as everyone else.
- Typical purchase: 75% to 80% loan-to-value, so 20% to 25% down, subject to lender guidelines.
- Lower down payment: select high-leverage programs reach 85% loan-to-value (15% down), generally with a score around 700 or higher.
- Cash-out refinance: tops out around 75% loan-to-value on standard rentals, so you leave about 25% equity in the property.
- Zero down: not a standard DSCR product.
- Cash needed: the down payment plus closing costs plus documented reserves.
Key Terms Defined
DSCR (debt service coverage ratio): the property’s monthly rent divided by its monthly housing obligation. A result of 1.00 means rent equals the obligation.
LTV (loan-to-value): the loan amount as a percentage of the property’s price or appraised value, whichever is lower.
PITIA: principal, interest, taxes, insurance, and any HOA dues. It is the full monthly obligation the rent is measured against.
Reserves: liquid savings you document after closing, usually counted in months of PITIA.
Seasoning: the waiting period a lender wants after you buy a property before it will lend against your new equity.
Non-QM: loans that fall outside the standard agency mortgage box. DSCR loans are non-QM investment-property loans.
DSCR Calculator
Run the numbers in Washington
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.
Is There a Washington-Specific Down Payment Rule?
No. No government body sets a DSCR down payment, and Washington has no state rule that changes it. 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.
What sets your number is the program tier, not the state line. Across our network, no state-specific leverage overlay is in force, so a Washington State purchase takes the same tiers described below. Some outside commentary does list a few states with tighter caps, according to Statements Ready, a practitioner blog. That is a market claim. In the programs we place files with, the standard purchase tiers apply in every state.
One more note: search results for this topic mix Washington State with Washington, D.C. The mechanics here apply to both.
How Does the Lender Land on Your Number?
The lender picks a maximum LTV from your credit score, the property’s DSCR, the property type, the loan size, and whether you are buying or doing a cash-out refinance. Your minimum down payment is 100% minus that maximum. Five inputs move it.
Credit score. A 620 floor exists in parts of our network. Most programs want around 660. A score of 700 or higher unlocks the strongest leverage tiers.
Coverage. Many select programs start at a 1.00 DSCR. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and more leverage.
Property type. Single-family rentals get the best tiers. Two-to-four unit properties and condos are commonly treated one step more conservatively, so plan on the lower end of the 75% to 80% purchase range. The Statements Ready blog reports a 75% cap for those property types. Across our network, the purchase range of 75% to 80% is your planning figure.
Loan size. Standard programs run up to $3,000,000 (smaller balances available through select lenders). Above $2,500,000 the network generally holds to 30-year fixed structures.
Transaction type. A purchase and a cash-out refinance use different ceilings, covered below.
The lender also lends against the lower of the price or the appraised value. If the appraisal comes in low, your cash goes up. For the rent side, appraisers use Form 1007 on single-family and Form 1025 on two-to-four unit properties.
The Tiers at a Glance
| Scenario | Typical max LTV | Typical down |
|---|---|---|
| Standard purchase | 75%–80% | 20%–25% |
| High-leverage select program | 85% | 15% |
| Short-term rental purchase | up to 75% | 25% or more |
| Cash-out, standard rental | about 75% | 25% equity left |
| Cash-out, short-term rental | 70% | 30% equity left |
These are typical ranges from select lenders in our wholesale network. They are not guarantees. Every file is underwritten individually, and programs change.
The 85% tier is the narrow exception. It generally wants a score around 700 or higher and a strong file. Treat it as something to confirm, not something to plan around.
Why Does More Down Payment Help the DSCR?
A bigger down payment means a smaller loan, which means a smaller monthly obligation, which means a higher coverage ratio. That is the same mechanism that sets the tiers.
Run the numbers on a rental that covers its PITIA at roughly 1.04x with 20% down. Move to 25% down and the loan shrinks by about 6% of the original amount. Coverage improves, though by slightly less than that, because taxes and insurance do not shrink. You land in the low 1.1s. That is modeled math, not a market figure, but it shows the direction. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
This matters when you sit near the edge of a tier. A property that barely clears 1.00 at 80% LTV may carry more room at 75% LTV, and some investors choose the higher down payment on purpose. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Here is the part that gets misread. A DSCR above 1.00 is not positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside it. A deal can clear 1.00 and still lose money in a bad month.
What If Your Coverage Is Below 1.00?
Then the path changes, but it does not close. Sub-1.00 coverage is available through select lenders in the network, with leverage and terms adjusted. In practice that means a lower LTV ceiling, so a bigger down payment, and often stronger reserve expectations.
A separate path exists for no-ratio structures. These are available only through select lenders, generally for borrowers who already own a primary residence. They are not a shortcut. Expect the same trade: less leverage and different terms.
If your numbers land under 1.00, you have three levers. Put more down, which shrinks the payment and lifts the ratio. Pick a property with stronger rent relative to price. Or ask about structures that may ease the monthly obligation, such as an interest-only period, which is available through select lenders. The right answer depends on the property, the program, and current lender guidelines.
What Counts Toward Total Cash to Close?
Budgeting only for the percentage down can leave a buyer short at the closing table. Plan for three buckets:
1. The down payment. Price minus the loan, at your tier.
2. Closing costs. These are separate from the down payment.
3. Reserves. Commonly around 6 months of PITIA, though they vary by lender, leverage, loan size, and transaction type.
On reserves, conservative rate-and-term files at modest leverage under $1,500,000 can see them waived. Loans above that size typically step up to about 9 months. Reserves also tend to rise on weaker-coverage files. Reserves are not the down payment, and the lender wants them documented on top of it.
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?
From your own documented funds. The lender wants to see where the money came from and that it is yours to use. Whether a given source is accepted is program-specific, so ask before you contract.
One rule is close to universal. Programs generally do not allow seller financing or a second lien on the property you are buying to fund the down payment. A buyer cannot borrow the 20% against the same house.
Many investors fund the next down payment from a different deal. A cash-out refinance on a seasoned rental is the usual route. Across most of the network, cash-out tops out around 75% LTV on standard rentals, and about 6 months of seasoning is the common expectation. The refinance pulls equity out of one property so you can put it down on the next. 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. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
You can buy in an LLC, subject to program eligibility. The lender will ask for entity documents and will still want the liquid funds documented.
Can You Do a DSCR Loan With No Money Down?
Not through a standard program. No mainstream DSCR product is zero-down.
Investors who reach very low out-of-pocket numbers do it by combining strategies. They buy at a discount to value, rehab, and refinance, an approach often called BRRRR. They are not skipping the down payment. They are recovering it afterward. For a closer look, see Lendmire’s explanation of what no-down-payment DSCR options really look like.
Advertised 15% programs exist, but they are the select high-leverage tier described above. Treat them as exceptions.
Short-Term Rentals and Other Property Types
For short-term rentals, the structure shifts. Purchase leverage goes up to 75% LTV, refinance runs around 70%, and cash-out is 70%. Expect a score of 640 or higher and about 12 months of hosting history. The coverage floor is 1.00 on purchases and refinances. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
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.
Some property types are not offered at all through the network’s DSCR programs. Manufactured homes (single- and double-wide), log homes, and barndominiums fall outside these programs, so no down payment amount fixes that.
DSCR Versus Agency-Style Financing on the Down Payment
The trade is straightforward. Conventional investment loans are underwritten on your personal income. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. In exchange, the down payment is often on the higher side.
Do not borrow numbers from owner-occupied programs. NerdWallet reports that 20% is mainly the threshold for avoiding mortgage insurance on conventional loans, and that VA loans are for eligible service members. FHA and VA low-down options require you to live in the home. They do not describe DSCR loans. For the full comparison, see Lendmire’s complete DSCR loans guide.
Practical Ways to Plan Your Cash
- Underwrite at the higher down payment. If 20% works, run it at 25%. You gain room for a low appraisal or softer rent.
- Raise your score before you apply. Score affects the tier more than most buyers expect.
- Document funds early. Move money to the accounts you will use, and keep records.
- Pick coverage over leverage when close. A stronger ratio can open better terms than shaving the down payment.
- Budget the full stack. Down payment, closing costs, and reserves together.
For investors who think about scaling, the real limit is usually capital rather than qualification. Putting 20% to 25% down on every deal adds up. That is why many investors recycle equity through cash-out refinances.
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. As a broker, Lendmire arranges DSCR financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. This is not a commitment to lend.
Frequently Asked Questions
What is the minimum down payment on a DSCR loan?
Typically 20% to 25% on a purchase, which reflects 75% to 80% LTV. A select high-leverage tier reaches 85% LTV, or 15% down, generally with a score around 700 or higher. Every file is subject to lender guidelines, property review, and underwriting.
Can I put less down if my credit is excellent?
Sometimes, but not automatically. A strong score earns better leverage tiers and pricing, yet coverage, property type, and loan size also move the tier. A 700-plus score helps. It does not override a weak DSCR or an ineligible property.
Does a bigger down payment fix a DSCR below 1.00?
It can help, because a smaller loan lowers the monthly obligation and lifts the ratio. Sub-1.00 coverage is also available through select lenders in the network, with leverage and terms adjusted. A larger down payment never erases credit floors, reserve rules, or property eligibility.
How does the down payment work on a cash-out refinance?
There is no down payment, only the equity you leave behind. On standard rentals, cash-out generally tops out around 75% LTV, so you leave about 25% in the property. Short-term rental collateral caps at 70%. Lenders also commonly expect about 6 months of seasoning.
Are reserves part of the down payment?
No. Reserves are separate documented savings held after closing, commonly around 6 months of PITIA. They can be waived on conservative rate-and-term files under $1,500,000 and step up to about 9 months above that size.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Statements Ready – DSCR Loan Down Payment
2. NerdWallet – How Much Down Payment for a House
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 Washington
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.