The Quick Read: Most DSCR purchase loans through select lenders in Lendmire’s wholesale network call for roughly 20% to 25% down, which maps to 75% to 80% loan-to-value (LTV) on a purchase. Weaker credit, short-term rental collateral, or coverage below 1.00 pushes the number higher. Subject to lender guidelines, here is how the pieces stack:
- Standard purchase leverage typically runs 75%–80% LTV, so 20%–25% down.
- Select high-leverage programs can reach 85% LTV (15% down), generally with a score near 700 or higher.
- A 620 score is the floor in parts of the network; most programs want around 660.
- Short-term rental purchases top out at 75% LTV.
- Reserves of about 6 months of PITIA sit on top of the down payment.
No regulator sets a DSCR down payment. Each lender sets its own LTV cap, and the down payment is whatever is left after it. That is why the answer moves with the property and the borrower.
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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.
What Actually Sets the Down Payment?
The down payment equals the purchase price times one minus the maximum LTV. If a program caps a purchase at 75% LTV, the investor brings 25% of the price. At 80%, it is 20%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Lenders build that cap from a grid. The grid weighs credit score, the DSCR, property type, loan size, and whether the deal is a purchase, rate-and-term refinance, or cash-out. Across the network, the strongest leverage shows up only when several of those inputs are strong at once.
One detail catches buyers off guard. Lenders generally lend against the lesser of the price or the appraised value. If the appraisal comes in low, the down payment rises to cover the gap.
The Matrix: Property Type by Credit Tier
Credit moves the cap within each property type, and the property type can set its own ceiling. Typical ranges across the select lenders in the network look like this. Qualification is subject to lender guidelines, and every file is reviewed individually.
| Scenario | Typical max LTV (purchase) | Typical down |
|---|---|---|
| Single-family, 700+ score, 1.00+ coverage | 80% (up to 85% in select programs) | 20% (15%–20%) |
| Single-family, around 660 score | 75%–80% | 20%–25% |
| Single-family, 620–659 score | Lower tier, program-specific | 25% or more |
| Short-term rental, 640+ score | Up to 75% | 25% or more |
| Coverage below 1.00 | Leverage adjusted down | Typically above 20% |
Two columns of reasoning sit behind that table. Credit tells a lender how likely the borrower is to perform. Property type tells it how easily the asset resells and how stable the income is. When the two conflict, the tighter one wins. An investor with a 740 score buying a short-term rental still faces the 75% purchase ceiling.
How Credit Tiers Change the Number
Credit is the lever investors can actually pull before they apply. Here is how the tiers generally behave across the network:
- 620–659: A 620 floor exists in parts of the network. Expect lower leverage, tighter reserves rules, and fewer program choices.
- 660–699: Most programs start around 660. Standard 75%–80% purchase leverage is typically available here, depending on coverage and property type.
- 700 and above: This tier unlocks the strongest leverage, including the select 85% LTV purchase programs.
A better score does not always shrink the down payment. Sometimes it only improves pricing and widens the program menu. The 15% down tier is reserved for top-credit files with strong coverage and a plain single-family property. Plan around 20% to 25% and treat anything lower as a bonus. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Property Type: Why the Collateral Changes the Math
Single-family homes carry the most favorable leverage. They have the deepest buyer pool, so lenders are most comfortable with them.
Two- to four-unit properties and condos commonly sit at the higher end of the down payment range, around 25%. Condos add a project review on top of the unit review. Non-warrantable condo projects generally get less leverage, and some are not eligible at all.
Short-term rentals are reviewed on hosting history and income stability. Across the network, a purchase tops out at 75% LTV, while refinances run around 70% and cash-out at 70%. Expect a 640 or higher score and about 12 months of hosting history. Coverage floors are 1.00 on purchases and 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. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Not offered: manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs. No down payment size changes that.
Purchase Versus Refinance: Different Equity Questions
On a refinance, the question flips from “how much do I put down” to “how much equity must stay in the property.” Cash-out refinances on standard rentals top out around 75% LTV across most of the network, with roughly 6 months of seasoning commonly expected. Short-term rental collateral is more conservative, with a 70% cash-out ceiling. Rate-and-term refinances can reach somewhat higher leverage on standard rentals.
The practical effect: an investor who bought at 75% LTV and wants to recycle capital must usually wait out seasoning and rely on the property’s value having held or risen.
When a Bigger Down Payment Rescues Coverage
DSCR compares monthly rent to the full monthly housing obligation: principal, interest, taxes, insurance, and any association dues. More cash down means a smaller loan, which lowers the obligation and lifts the ratio.
That makes equity a real tool. Say an investor’s rent clears only about 0.95x at 75% LTV. Putting more down can pull the ratio up toward or above 1.00, which is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted, so the choice is often between more cash now or less leverage by structure.
Here is the catch. A larger down payment never erases a credit floor, a reserve rule, or a property eligibility limit. The strongest files clear both tests: enough equity and enough rental coverage. And clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
The Cash You Need Beyond the Down Payment
The down payment is one line of the cash needed at closing. Add closing costs, the appraisal, prepaid items, and reserves.
Reserves vary by lender, leverage, loan size, and transaction type. Many files call for around 6 months of PITIA. Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived, while loans above that size typically step up to about 9 months. Loan sizes run up to $3,000,000 on standard programs (smaller balances available through select lenders), and above $2,500,000 the network generally holds to 30-year fixed structures.
Loan size can also break the math at the low end. A low-priced property at 20% down might produce a balance below a program’s minimum, in which case the file routes to a select lender that handles smaller balances. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Zero Down? No. Here Is What Is Real
Sub-20% programs are rare, conditional, and tied to top credit.
What investors can legitimately do is reduce the cash they leave in a deal. Recycling equity through a cash-out refinance after seasoning returns capital for the next purchase. Comparing cash-on-cash return at 20% versus 25% down is smarter than assuming the minimum is always best, because a larger down payment can improve coverage and widen options. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Funds for the down payment also need a clear source, and lenders review where the cash came from.
Why DSCR Asks for More Equity Than Conventional
Conventional investor loans lean on personal income and debt-to-income ratios. 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.
For contrast only, the agency matrix allows higher leverage on a one-unit investment purchase than on a two- to four-unit purchase (Fannie Mae eligibility matrix). The pattern is the same one DSCR lenders follow: more units, less leverage. The tradeoff is simple. Conventional can cost less up front but needs personal income documentation and limits how many properties an investor can finance. A DSCR loan trades a larger down payment for qualification that rests primarily on property-level rental income covering the payment, subject to lender guidelines.
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.
A Practical Checklist to Lower the Requirement
Work through these in order:
1. Raise the score toward 700. It is a more affordable way to open the strongest leverage tiers.
2. Check coverage before you offer. Rent supported by an appraisal rent schedule drives the ratio. Single-family uses Form 1007; two- to four-unit properties use Form 1025 (Fannie Mae appraisal forms).
3. Choose collateral deliberately. Single-family usually earns the best leverage. Condos and multi-unit properties usually do not.
4. Size the loan inside program limits. Very small or very large balances change which lenders apply.
5. Line up reserves and funds sourcing early.
An honest flip point: if the only way a deal works is at the highest leverage tier, the deal is thin. Tight coverage plus minimum equity leaves little room for a vacancy or a repair bill.
Key Terms Defined
LTV (loan-to-value): The loan balance divided by the lesser of the price or appraised value.
DSCR (debt service coverage ratio): Monthly rent divided by the monthly PITIA obligation; a measure of whether the property’s income covers its payment.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly housing obligation.
Seasoning: The length of time an owner has held a property before a cash-out refinance is considered.
Reserves: Liquid cash held after closing, separate from the down payment.
Non-QM: A loan that sits outside the qualified mortgage box, which is where DSCR loans live.
Frequently Asked Questions
Can a DSCR loan ever be done with less than 20% down?
Sometimes, but not routinely. Select high-leverage programs reach 85% LTV on a purchase, which is 15% down, generally for borrowers with scores around 700 or higher and strong coverage. Most files land at 20% to 25% down, and any lower tier is subject to lender guidelines and property review.
Does a higher credit score lower my down payment?
It can, but it often improves the program menu more than the minimum. Moving from the 660 range into 700 or higher unlocks the strongest leverage tiers. A top score does not override a property-type cap, such as the 75% ceiling on short-term rental purchases.
How much equity do I need on a cash-out refinance?
Plan to leave about 25% equity in the property, since cash-out on a standard rental tops out around 75% LTV across most of the network. Short-term rental cash-out is more conservative, at 70%. About 6 months of seasoning is the common expectation. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Is the down payment all the cash I need?
No. Reserves, closing costs, and appraisal fees come on top. Reserves commonly run around 6 months of PITIA, though they vary by lender, leverage, and loan size, and larger loans typically require more.
Can I use a DSCR loan on a manufactured home or barndominium?
No. Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs, regardless of how much is put down.
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. The complete DSCR loans guide walks through the rest of the process. Program details change, and nothing here is a commitment to lend. Tax treatment varies; consult a qualified professional.
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. 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: How to Finance a Rental Conversion to Airbnb With a DSCR Loan · How Much in Reserves Does an STR DSCR Loan Require by Loan Size and Property Count? · Does a Rural Cabin DSCR Loan Require Reserves on Each Airbnb You Own?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.