15% Down DSCR Loan

Last updated: July 21, 2026

The down payment is the single biggest barrier between most investors and their next rental property. You can find the deal, underwrite it, and line up the financing, and still be stopped cold by the cash required to close. For years, DSCR loans have generally required 20% down on a purchase, and often 25% for the best terms. That standard has now moved. OfferMarket's DSCR loan program for 1-4 unit properties offers purchases with just 15% down. This piece is about what that lower down payment does for you as an investor, how the cash math works, and how to decide whether to use it.

Why the Down Payment Matters So Much

For a rental investor, cash is the true constraint on growth. Interest rates matter, deal flow matters, but the amount of capital you must sink into each acquisition is what ultimately caps how many properties you can own. Every dollar tied up as a down payment on one property is a dollar unavailable for the next.

This is why lowering the down payment from 20% to 15% is more significant than it first appears. It is not just a smaller number on one closing statement. It is a structural change in how far your capital stretches across a portfolio. Consider the difference on a few price points.

On a single 400,000 dollar purchase, 15% down keeps 20,000 dollars in your account. Over three or four acquisitions, that saved capital can be the difference between stopping and buying one more property.

How 15% Down Works on a DSCR Loan

A DSCR loan qualifies based on the rental property's cash flow rather than your personal income. The debt service coverage ratio measures whether the property's rent covers its full monthly payment, its PITIA, which is principal, interest, taxes, insurance, and any association dues. If the rent covers the payment, the deal qualifies, regardless of your W-2 income or tax returns.

Putting 15% down instead of 20% means you are borrowing more of the purchase price, 85% instead of 80%. That is a larger loan, so your monthly payment is higher and your down payment is lower. The tradeoff is straightforward: less cash out of pocket today in exchange for a slightly larger loan to service. For an investor focused on deploying capital efficiently, that is often a trade worth making.

How This Compares to Conventional Financing

It is worth putting the 15% down DSCR option in context, because investor financing has historically demanded a lot of cash. Conventional financing for a non-owner-occupied investment property typically requires 20% to 25% down, and it also qualifies you on your personal debt-to-income ratio, which limits how many properties you can finance before your personal income caps you out.

The 15% down DSCR loan improves on both fronts. It requires less cash than the conventional investor standard, and because it qualifies on the property's income rather than yours, it does not tie your ability to scale to your personal DTI. For an investor building a portfolio, that combination, less cash per deal and no personal income ceiling, is exactly what enables continued acquisition.

What It Takes to Qualify

Because a lower down payment means a larger loan and more risk to the lender, the 15% down option is reserved for stronger scenarios. Three conditions apply.

Strong credit. The guarantor needs a FICO score of 720 or higher. This is the main personal qualification, and it reflects that the lower-down-payment tier is built for well-qualified borrowers.

A property that covers its payment. The deal needs a DSCR of at least 1.0, meaning the property's rent must at least cover its full monthly payment. Since a lower down payment produces a larger loan and therefore a higher payment, confirm the property still clears this bar at the higher loan amount, not just at the standard one.

A purchase, not a refinance. The 15% down option applies to purchase transactions. Refinances of properties you already own use the standard down-payment-equivalent terms rather than this purchase-specific tier.

The Structure and the Cost

Two practical points round out the picture.

First, the loan structure. The 15% down option is available only as a 30-year fixed-rate, fully amortizing loan. That is the classic, stable rental loan: a fixed rate for the full term and a payment that steadily pays the loan down. The tradeoff is that interest-only and 40-year payment structures, which some investors use to lower their monthly payment, are not available with 15% down. If those structures matter to your strategy, they come with the standard 20% down instead.

Second, the cost. A lower down payment means more leverage, and more leverage carries a modestly higher interest rate, approximately half a percent higher than the standard 20%-down pricing, though the exact figure depends on market pricing at the time your loan is quoted. You are trading a slightly higher rate for keeping more cash at closing. Whether that is worthwhile depends on what you can do with the cash you save.

Deciding Whether to Put 15% Down

The choice between 15% and 20% down is really a question about your capital. Put 15% down when cash is your binding constraint and you have productive uses for the money you keep, such as another down payment, a renovation budget, or reserves that let you weather a vacancy. If the capital you preserve can go to work earning a return, keeping it usually beats sinking it into a larger down payment to shave a little off your rate.

Lean toward 20% down when your DSCR is tight or when you plan to hold for the very long term and want the lowest possible rate and payment. A larger down payment produces a smaller loan, a lower payment, and a stronger coverage ratio, which can matter on a deal with slim cash flow. If a property barely clears 1.0 DSCR, the extra cushion from putting more down may be worth more than the cash you would otherwise keep.

The disciplined move is to run the deal both ways. Compare your total cash to close and monthly payment at 15% down against 20% down, check that the 15% version still cash flows and clears your DSCR target, and weigh the capital you preserve against the additional interest over your expected hold. The right answer is the one that fits your capital position and your growth plans.

The Bottom Line

A 15% down DSCR loan lowers the cash required to buy a 1-4 unit rental from the traditional 20% to just 15%, preserving thousands of dollars per deal and letting your capital reach further across a portfolio. It qualifies on the property's rental income rather than your personal income, requires a 720 or higher guarantor FICO and a DSCR of at least 1.0, applies to purchases, and comes as a 30-year fixed fully amortizing loan in exchange for a slightly higher rate, roughly a half percent above standard pricing. For an investor whose growth is limited by cash rather than deal flow, that is a meaningful edge. Run the numbers both ways, make sure the deal still cash flows, and put your capital where it does the most work.

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