Your down payment on a DSCR (Debt Service Coverage Ratio) loan depends on several factors — including your credit score, property type, and cash flow strength (DSCR ratio).
Since these loans are designed for real estate investors, lenders focus more on the deal than your personal finances.
💰 Typical Down Payment Ranges
Property Type | Minimum Down Payment | Max LTV | Notes |
Single-Family (Long-Term Rental) | 20% – 25% | Up to 80% | Standard DSCR program |
2–4 Unit Property | 25% – 30% | Up to 75% | More units = more risk |
Short-Term Rental (Airbnb/VRBO) | 20% – 25% | Up to 80% | Based on market or projected rent |
Cash-Out Refinance | 25% equity | Up to 75% LTV | Depends on appraised value |
Portfolio / Multiple Properties | 25%+ | Varies | Based on combined DSCR performance |
Most DSCR lenders cap loan-to-value (LTV) at 80%, meaning a 20% down payment is usually the minimum required.
🧮 How Your DSCR Affects Down Payment
The stronger your property’s cash flow, the less you’ll need to put down.
Here’s how DSCR ratio impacts leverage:
DSCR Ratio | Typical Max LTV | Down Payment Range |
1.25+ | 80% | 20% |
1.10 – 1.24 | 75% | 25% |
1.00 – 1.09 | 70% | 30% |
Below 1.00 | Case-by-case | 30%+ or not eligible |
Improving your DSCR (by raising rent or reducing expenses) can directly lower your required down payment.
🧾 What Counts Toward Your Down Payment
Cash savings or seasoned bank funds
Proceeds from another property sale
Gift funds (in some cases)
Business capital if purchasing under an LLC
Lenders typically require proof that funds have been in your account for at least 60 days (“seasoned funds”) before closing.
🧠 Factors That Influence Down Payment Size
Credit Score: Higher scores often allow lower down payments.
Property Type: Multifamily or STR properties require more equity.
Experience Level: Experienced investors can get more favorable LTVs.
Loan Type: Purchase vs. refinance affects leverage limits.
Market Conditions: Rates and risk appetite change over time.
💬 Key Takeaway
Expect a 20–25% down payment for most DSCR loans, with some flexibility depending on your credit, DSCR ratio, and property type.
Strong deals with good cash flow almost always unlock better leverage — meaning you keep more capital free for your next investment.