The Quick Read: Sometimes, and only when credit, rental coverage, and property type all line up. Most purchase files across Lendmire’s wholesale network land at 75%-80% LTV, and select high-leverage programs reach 85% LTV on a purchase with roughly a 700+ credit score, subject to lender guidelines.
- Purchase loans on investment property typically run 75%-80% LTV, with 85% available only through select programs.
- Cash-out refinances top out around 75% LTV on standard rentals, and rate-and-term refinances can reach 85% on select programs.
- Two tests apply at once: enough equity and enough rent to cover the payment.
- A bigger loan raises the payment, so the coverage ratio falls as leverage climbs.
- Credit score, loan size, and property type can all pull the ceiling down from the headline number.
Investors usually ask this question after seeing a 15% down option advertised somewhere. The honest answer has layers. Higher leverage exists, but no law sets it. Each lender’s program grid does, and those grids reward specific profiles.
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 22, 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 22, 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 LTV Actually Measures
LTV is the loan amount divided by the property’s value. The down payment is its mirror image: the more you put down, the lower the LTV. The Consumer Financial Protection Bureau explains that a larger down payment lowers LTV and that LTV influences how much you can borrow and what the loan costs.
Which value counts matters. On a purchase, the cap applies to the lower of the price or the appraisal, a convention the Fannie Mae Selling Guide describes for conventional loans and that DSCR programs generally follow. A low appraisal shrinks the loan even when the price is firm. Paying above appraised value means covering the gap in cash.
What Sets the Ceiling on a DSCR Loan?
Five inputs decide the ceiling: transaction type, credit score, rental coverage, property type, and loan size. A strong file on one input can’t fully rescue a weak file on another. Across the network, the grids work like this:
| Factor | How it moves the cap |
|---|---|
| Transaction | Purchase highest; cash-out lowest |
| Credit score | 700+ unlocks the strongest tiers |
| Coverage ratio | Stronger ratios open better leverage |
| Property type | Simple 1-4 unit homes get the best terms |
| Loan size | Leverage steps down as balances grow |
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. That is why program grids, not agency caps, set the limits here. Government-backed owner-occupant products can reach far higher leverage, but they aren’t available for investment rentals.
The Two Tests: Equity and Coverage
This is the part most investors miss. A DSCR file has to pass an equity test (the LTV cap) and a coverage test (rent against the full monthly obligation). Coverage is monthly rent divided by PITIA: principal, interest, taxes, insurance, and association dues. The debt service coverage ratio breaks even at 1.0, meaning income just covers debt service.
Here’s the catch. Raising LTV means a larger loan, which means a larger payment, which lowers the ratio on the same rent. Picture a rental that clears roughly 1.25x at 70% LTV. Push the same property to 80% and the ratio slides toward the low 1.1s. Push to 85% and it may land near 1.0 or below. These are modeled ratios to show direction, not a quote. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
So the two goals pull against each other. Chasing the highest LTV on a property with thin rent often fails the coverage test before it ever hits the equity cap. In higher-priced markets, where rent is low relative to value, coverage is usually what binds first.
One more distinction. Clearing 1.00 is not the same as positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation, so a file can qualify and still run tight in real life.
Ways to Get a Higher LTV
Some levers raise the cap itself. Others only help the file pass the coverage test at the leverage you want. Knowing which is which saves effort.
- Credit score. A 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers. The 85% purchase programs generally sit at roughly 700+.
- Transaction type. A purchase gets the highest leverage. A rate-and-term refinance, where no cash comes back, can reach up to 85% on select programs.
- Property type. Straightforward 1-4 unit residential properties get the best terms. Unusual collateral narrows options.
- Loan size. Staying under the size breakpoints keeps leverage from stepping down.
- Stronger rent support. Market rent documented on the appraisal and a signed lease both strengthen the file.
- Interest-only structure. Available through select lenders in the network, it lowers the payment tested and can lift coverage on a large balance. The tradeoff is slower principal paydown.
- Longer amortization. Extended terms, such as 40-year, are also available through select lenders and spread the payment out.
- A larger down payment. It lowers the payment and can lift the ratio, which is the opposite of the leverage goal but sometimes the only way to clear coverage.
Each lever has a cost. Interest-only trades equity buildup for coverage. A bigger down payment trades cash for qualification. Neither erases credit floors, reserve rules, or property eligibility.
Purchase vs Cash-Out vs Rate-and-Term
Cash-out is almost always capped below purchase leverage because the lender is handing money back. Across most of the network it tops out around 75% LTV on standard rentals, and about 6 months of seasoning is the common expectation. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
| Transaction | Typical ceiling | Notes |
|---|---|---|
| Purchase | 75%-80%; 85% select | Lower of price or appraisal |
| Rate-and-term | Up to 85% select | No cash back to borrower |
| Cash-out | Around 75% | Seasoning clock applies |
| STR purchase | Up to 75% | 640+ score, 12 months hosting history |
| STR cash-out | Around 70% | Short-term rental collateral only |
Short-term rentals sit lower. On short-term rental collateral, a purchase tops out at 75%, and a refinance, including cash-out, runs around 70%. Expect a 640+ score and about 12 months of hosting history. Coverage floors for these files start at 1.00 on both purchases and refinances, subject to lender guidelines. 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.
Seasoning changes the math on refinances. Before the seasoning period passes, lenders often size the loan from cost basis instead of the new appraisal. That matters for investors who bought with short-term money, renovated, and want to refinance out. The practical LTV against the new value can land well below the headline cap, because the lender is working from what you paid and spent, not what the property is now worth.
Size, Coverage Floors, and Sub-1.00 Paths
Loan sizes run up to $3,000,000 on standard programs, with smaller balances routing through select lenders. Leverage steps down as balances grow, and cash-out steps down faster than purchase. Above $2,500,000, the network generally holds to 30-year fixed structures.
Reserves move with leverage and size. They commonly run around 6 months of PITIA, conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived, and loans above that size typically step up to about 9 months. Treat that as a pattern, not a promise.
On coverage, 1.00 is where many select programs start. A separate path takes coverage below 1.00 through select lenders in the network, with leverage and terms adjusted. No-ratio structures exist only through select lenders, generally for borrowers who already own a primary residence. In both cases the tradeoff is the same: less leverage, not more.
One Practitioner Observation
Across the many lender grids a broker sees, the file that gets denied at the top leverage tier is rarely short on equity. It’s short on rent. An investor targets 85% on a property whose rent only supports a thin ratio, the payment on the larger loan drags coverage under the program floor, and the file drops a tier. The investors who get the leverage they want usually shop the property first, looking for a rent-to-price relationship that supports the larger loan, and then pick the lender. Lendmire’s complete DSCR loans guide walks through how those pieces fit together.
When a Higher LTV Is the Wrong Move
Maximum leverage preserves cash, and that has real value if you’re recycling capital into the next deal. It’s the right call for an investor with strong credit, solid reserves, and a property whose rent clears coverage with room to spare.
It’s the wrong call in a few situations. If the ratio lands right at the floor, one insurance increase or a vacancy can push the property into negative territory in practice. If the higher tier needs a premium you wouldn’t otherwise pay, the extra cash preserved may not be worth the added carrying cost. And if the only way to hit your target LTV is to reach on credit or property type, the better move may be a lower-leverage loan on a stronger property.
Here’s a useful test. Ask whether the deal still works at 75% LTV. If it only works at the maximum, the margin is too thin to trust. Deals that hold up at modest leverage and get better at higher leverage are the ones worth stretching. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the property’s value, expressed as a percentage.
DSCR (debt service coverage ratio): Monthly rent divided by the full monthly housing obligation, including taxes, insurance, and dues.
PITIA: Principal, interest, taxes, insurance, and association dues, the full payment used in the coverage test.
Seasoning: The period a borrower has owned the property before a refinance can use appraised value instead of cost basis.
Rate-and-term refinance: A refinance that replaces the existing loan without taking cash out.
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 Pre-Application Checklist
1. Run coverage at 75% LTV first, then at the leverage you want. Note where it breaks.
2. Pull your credit and see which tier you’re in. A few points can move a tier.
3. Confirm the property type is eligible. Manufactured homes, log homes, and barndominiums are not offered through these programs.
4. Line up reserves for the leverage tier you’re targeting.
5. For a refinance, check the title date. The seasoning clock starts there.
6. Gather the appraisal rent estimate, lease, and entity documents if you’re closing in an LLC. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
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 DSCR investor loans through select lenders in its wholesale network across 41 markets, including Washington, D.C. Call 828-256-2183 or request a quote. Program details change, every file is reviewed individually, and nothing here is a commitment to lend.
Frequently Asked Questions
Can I put 15% down on a DSCR rental purchase?
Sometimes. Select high-leverage programs reach 85% LTV on a purchase, which means 15% down, and they generally want a score around 700 or higher. They also tend to limit property types and carry extra coverage requirements, subject to lender guidelines.
Is the LTV the same on a cash-out refinance?
Usually not. Cash-out tops out around 75% LTV on standard rentals across most of the network, and 70% on short-term rental collateral. About 6 months of seasoning is the common expectation, and before that the lender may size from cost basis.
Will a higher down payment fix weak credit?
No. A larger down payment lowers the payment and can lift the coverage ratio, but it doesn’t remove credit floors, reserve rules, or property eligibility. A 620 floor exists in parts of the network, and most programs want around 660.
Can I borrow the down payment?
Generally not. Lenders want the down payment to be the investor’s own funds, and sourcing is reviewed during underwriting. Gift or borrowed-funds treatment varies by program.
Do DSCR loans go to 90% or 100% LTV like government loans?
No. FHA, VA, and USDA programs are owner-occupant products with much higher leverage, and they don’t apply to investment rentals. DSCR purchase leverage typically runs 75%-80%, with 85% on select programs.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. CFPB: What Is a Loan to Value Ratio and How Does It Relate to My Costs
2. Fannie Mae Selling Guide: Loan-to-Value Ratios
3. Debt Service Coverage Ratio
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR Loan Requirements When Your Rental Has a 1.25 DSCR · How to Prove Rental Income on a DSCR Loan Application · How to Close a Blanket DSCR Loan Across Five Rental Properties
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
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.