DSCR Loan Down Payment Requirements

How Much Do You Need to Put Down on a DSCR Loan?

DSCR loans typically require a down payment between 20% and 25% of the purchase price. The exact amount depends on the property’s DSCR ratio, the loan amount, and the lender’s program guidelines.

Unlike FHA or VA loans, DSCR loans are business-purpose investment products, so there are no low-down-payment government programs available.

Typical Down Payment Tiers

Most DSCR lenders structure their down payment requirements based on DSCR strength:

DSCR 1.25 or higher: 20-25% down payment. Best rates and terms available.

DSCR 1.10 to 1.24: 25% down payment typical. Slightly higher rates to offset the thinner cash flow margin.

DSCR below 1.0: 25-30% down payment required, if the lender allows sub-1.0 DSCR at all. Limited program availability.

Some lenders also adjust down payment requirements based on property type. Single-family rentals may qualify for lower down payments than multi-unit or commercial properties.

Example: Down Payment on a DSCR Purchase

An investor buys a rental property for $400,000. The property has a DSCR of 1.20.

At 25% down: $100,000 down payment, $300,000 loan amount.
At 20% down: $80,000 down payment, $320,000 loan amount.

The higher DSCR (1.20) may qualify for the 20% option depending on the lender, saving $20,000 in upfront capital.

How to Reduce Your Down Payment

The strongest lever is improving the property’s DSCR. Higher rent, lower expenses, or a lower interest rate all push DSCR higher, which can unlock lower down payment tiers.

Use our calculator to model different scenarios and find the sweet spot.