Learn typical DSCR loan down payment requirements, LTV tiers, cash-to-close breakdowns, and fund sources for real estate investors.
TL;DR: DSCR loan down payments typically range from 20% to 25% for purchases, heavily influenced by credit score, DSCR ratio, property type, and investor experience. Investors should budget for total cash-to-close, which includes closing costs, lender fees, and 3-6 months of reserves.
Down payment ranges, LTV tiers, cash-to-close math, and low-down-payment structures for DSCR loans — with the real variables that push you from 20% to 30%.
Purchase down payments run 20-25%, while credit score, DSCR ratio, and property type dictate your exact LTV limit.
First-time investors, short-term rentals, 2-4 units, and low credit scores face a typical 5% down payment haircut.
Total cash to close includes closing costs, lender fees, escrows, and 3-6 months of PITIA reserves beyond the down payment.
Down payment funds can come from personal/business accounts, HELOCs, 1031 exchanges, or documented gift funds.
Is 20% down always enough for a DSCR loan? Only when credit, DSCR, and property type all align at the top tier. Short-term rentals, 2-4 units, condos, and first-time investors typically require 25%.
Can I use 100% financing on a DSCR loan? No. The absolute floor is 65-70% LTV, requiring at least 30-35% down or equity. Products marketed as 100% DSCR are typically bridge or hard money loans, not true DSCR loans.
How much reserves do I need in addition to the down payment? You typically need 3 to 6 months of PITIA (principal, interest, taxes, insurance, HOA) on the new loan held post-close in verifiable accounts.