The Quick Read: Usually the down payment is 20% to 25% on a purchase, with reserves commonly around 6 months of the full monthly housing payment and about 9 months once the loan passes $1,500,000, though select programs reach 85% leverage and conservative refinances can see reserves waived. Reserves are cash that stays in your account after closing, so they are separate from the down payment. No federal rule sets either number. Individual lenders do, and a DSCR loan is subject to lender guidelines on both.
- Most purchase files in the network land at 75%–80% loan-to-value, which means 20%–25% down.
- Select high-leverage purchase programs reach 85% loan-to-value (15% down), generally with a score near 700 or better.
- Reserves are commonly about 6 months of PITIA, stepping up to about 9 months above $1,500,000.
- Your true cash need is the down payment, plus closing costs, plus reserves. Budgeting for only the first piece is the classic mistake.
- A bigger down payment helps the coverage ratio, but it never erases leverage caps, credit floors, or reserve rules.
Key Terms Defined
Jumbo loan: A loan whose balance is above the conforming limit for the county and unit count.
LTV (loan-to-value): The loan amount divided by the property’s value or price. A 75% LTV means 25% down. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
PITIA: Principal, interest, taxes, insurance, and any HOA dues. It is the full monthly housing obligation.
Reserves: Verified cash or liquid assets left after closing, measured in months of PITIA.
DSCR (debt service coverage ratio): Monthly rent divided by PITIA. This loan type qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Seasoning: The waiting period a program wants before a refinance, or before funds count as yours.
DSCR Calculator
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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.
How Much Down Does a Jumbo Investment Loan Need?
Plan on 20% to 25% down for a purchase on most files. Across the wholesale network Lendmire places files with, purchase leverage typically lands at 75%–80% LTV. Select high-leverage programs reach 85% LTV, which is 15% down, but they usually want a score near 700 or better.
Credit sets how much leverage you can actually use. A 620 floor exists in parts of the network. Most programs want around 660. A 700-plus score unlocks the strongest leverage tiers.
Loan size matters too. Standard programs run up to $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Leverage often tightens as the balance grows, so a large loan can ask for more cash than the headline tiers suggest.
Investment occupancy is why these numbers sit above what a primary-residence buyer sees. Lenders know a rental can lose its tenant while the payment keeps coming. That risk is why they want more of your own money in the deal.
For a closer look at percentages by tier, see Lendmire’s piece How Much Down a Jumbo Loan Requires on an Investment Property.
How Many Months of Reserves Will You Need?
Reserves vary by lender, leverage, loan size, and transaction type. Commonly it is about 6 months of PITIA. A conservative rate-and-term refinance at modest leverage under $1,500,000 can see reserves waived. Loans above $1,500,000 typically step up to about 9 months.
The math is plain. Take your monthly PITIA and multiply by the required months. That total must sit in verified accounts after the down payment and closing costs have already come out.
Outside surveys paint a similar picture for conventional, full-documentation jumbos. Corporate Finance Institute reports 6 to 12 months of reserves and notes that some lenders count only part of retirement balances. On the network’s DSCR programs, the working figure is about 6 months, rising to about 9 above $1,500,000, and each lender reviews the file on its own terms.
Interest-only structures add one question. Some lenders size reserves on the fully amortized payment even when the loan is interest-only. Ask early which payment the lender uses.
What Makes a Loan Jumbo in the First Place?
The loan amount decides it, not the price. Compare the loan against the conforming limit for your county and unit count. The Federal Housing Finance Agency sets the one-unit baseline limit at $832,750, up $26,250 from the prior year. HousingWire puts that increase at 3.25%. The high-cost ceiling for one-unit properties is $1,249,125, which is 150% of the baseline.
Limits rise with unit count. The four-unit baseline is $1,601,750, per Calculated Risk’s reproduction of the FHFA data. The same balance can be jumbo on a one-unit and conforming on a four-unit. It can also be jumbo in a baseline county and conforming in a high-cost one.
Here is the one line you need on agency loans. Agency-backed buyers do not purchase loans above the limit, so their rules do not set jumbo cash requirements. DSCR loans are not agency products anyway. A DSCR loan above the line follows the program guidelines of the lender reviewing the file.
A larger down payment can pull a loan back under the limit. That trade-off is real, but it costs liquidity, and liquidity is what you need for reserves.
What Counts as Reserves, and What Doesn’t
Cash in a checking or savings account counts cleanly. Retirement and brokerage balances are treated lender by lender, and some programs count only a portion. Expect to document two to three months of statements and explain any large deposit.
Several things typically do not count:
- Borrowed funds, including money borrowed against another asset.
- Unvested compensation.
- Gift funds, on many programs.
- Deposits you cannot trace to a source.
- Dollars already used for the down payment or closing costs. Money cannot be counted twice.
On a cash-out refinance, proceeds from the loan itself often cannot be counted toward reserves at larger loan sizes. Confirm that before you plan around them.
Three Scenarios, in Percentages
Here are three modeled files. They use percentages and months rather than dollar amounts, so you can drop in your own price and payment.
| Scenario | Leverage | Cash down | Typical reserves |
|---|---|---|---|
| Purchase, loan under $1,500,000 | 75%–80% LTV | 20%–25% | About 6 months |
| Purchase, loan above $1,500,000 | Often lower, per lender | 20%–25% or more | About 9 months |
| High-leverage purchase, 700+ score | Up to 85% LTV | About 15% | Per lender, often near 6 months |
Run the first row with rent clearing roughly 1.2x. The investor needs 20%–25% of the price, plus closing costs, plus six times the monthly PITIA left over. If the cash for the third piece is missing, the file stalls, however strong the rent looks.
A cash-out refinance is its own picture. It tops out around 75% LTV on a standard rental and 70% on short-term-rental collateral, and about 6 months of seasoning is the common expectation. Reserves are set per file. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does Strong Rental Coverage Reduce the Cash You Need?
Not by itself. A full-documentation jumbo looks at your personal income, debt-to-income ratio, and traditional personal-income documentation. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Cash requirements apply either way. Reserves still apply, and so does the down payment.
Here is where the two connect. Putting more down lowers the monthly payment, which lifts the coverage ratio. Coverage of 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage. The best files clear both tests: enough equity and enough rental coverage.
Clearing 1.00 is not the same as positive cash flow. The calculation compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside it. Budget for them separately.
Property type can also end the conversation. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs. At appraisal, a rent schedule (form 1007) or a small-income-property report (form 1025) supports the rent figure, and larger loans may draw a second appraisal.
Short-term rentals run on tighter terms. Purchase leverage goes to 75% LTV, and expect a 640-plus score, about 12 months of hosting history, and a 1.00 coverage floor on a purchase. Refinance leverage sits lower, around 70%. 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. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Does Owning Other Properties Raise the Reserve Bar?
Often, yes. Some programs count financed properties beyond the subject, and some ask more of first-time investors. Each new purchase can raise the cash bar on the next one, which limits how fast a portfolio can grow. This is a genuine toss-up for fast scalers: lower leverage on property one may leave you better positioned for property two. Ask any lender up front how reserves are counted across your holdings.
If You’re Short on Cash
Work through these levers in order:
1. Shrink the loan. A lower price or a bigger down payment cuts the balance, and a smaller balance can drop you into a lower reserve tier.
2. Add equity, not debt. Borrowed money will not count toward reserves.
3. Raise your credit tier. A higher score can unlock more leverage, which means less cash down.
4. Rebalance the split. A larger down payment helps coverage but drains reserves. Find the mix that leaves both intact.
5. Stage and document funds. Keep money in verified accounts, and avoid moving it around right before applying.
6. Wait. If you are one tier short, a few more months of saving often beats a thinner file.
Frequently Asked Questions
Do reserves count toward the down payment?
No. The down payment and closing costs come out of your verified funds first. Reserves are what remains, and they must stay in your accounts after closing.
Can gift funds be used as reserves?
Often not. Many programs exclude gift funds from reserves, along with borrowed money. If a family member is helping, ask the lender how those funds are treated before you count on them.
Do retirement accounts count?
Sometimes, and treatment is lender-specific. Some programs count only a portion of retirement and brokerage balances. Cash is the cleanest reserve asset.
Do reserves apply per property?
On some programs they do. Certain lenders count every financed property you own, so a growing portfolio raises the requirement on each new purchase. Ask how your lender counts them.
Does an interest-only loan lower my reserves?
Not necessarily. Interest-only periods are available through select lenders in the network, but some lenders size reserves on the fully amortized payment. Confirm which payment drives the number.
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 broker arranging financing through select lenders in its wholesale network, covering 41 markets, including Washington, D.C. For the full picture of how these loans fit together, start with the complete DSCR loans guide.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Corporate Finance Institute: jumbo loan
2. FHFA conforming loan limit announcement
3. HousingWire: conforming loan limit increase
4. Calculated Risk: FHFA multi-unit limits
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 Qualify for a Super Jumbo DSCR Loan in Washington · How to Qualify for a Super Jumbo DSCR Loan in South Carolina · Full-Doc Jumbo vs Super Jumbo DSCR on an Investment Property
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.