DSCR Loan Down Payment

Last updated: July 24, 2026

OfferMarket Capital LLC now offers DSCR loan terms with down payment as low as 15% (85% LTV).

The down payment is the first question almost every investor asks about a DSCR loan, and it is the right question, because it determines how much capital each deal consumes and therefore how fast you can grow. The answer, though, is not a single number. The down payment on a DSCR loan moves based on your credit, your loan size, your property, your leasing strategy, and even your residency. And once you know your number, there are two legitimate ways to reduce the cash you personally bring to closing. Understanding all of it lets you anticipate your cash requirement before you make an offer instead of discovering it during underwriting. Here is how DSCR loan down payments actually work.

Start With the Standard: 20% Down

The baseline for a DSCR loan purchase is 20% down, which corresponds to 80% loan-to-value. On a $300,000 purchase, that is $60,000 down and a $240,000 loan.

That 80% LTV figure is the anchor for everything else in this article. Some scenarios let you put less down, and a number of factors push the requirement higher. Think of 80% as the starting point from which adjustments are made in either direction based on the specifics of your deal.

Why the Number Varies: The Note Buyer Framework

Before getting into specific adjustments, it helps to understand why DSCR down payment requirements are not fixed the way conventional loan requirements often are.

OfferMarket's DSCR loan program works by underwriting your specific scenario and then selling the loan to the institutional credit investor, the note buyer, who is the best fit. Different note buyers maintain different guidelines, so the maximum LTV available on your loan depends in part on which note buyer's box your scenario fits. This is why a blanket answer to "what is the down payment on a DSCR loan" is impossible, and also why your particular circumstances have real influence on the outcome. Guidelines vary by note buyer, and your scenario determines which guidelines apply.

Factor One: Credit Score

Credit is the most important single input. Generally, a 700 FICO is the cutoff to qualify for maximum LTV, meaning the lowest available down payment. At or above 700, you are eligible for the program's best leverage. Below 700, expect a reduction in maximum LTV, which translates directly into a larger down payment.

At the other end, stronger credit can unlock more. Our 85% LTV DSCR loan tier, which lets you put just 15% down on a purchase, requires a 720 or higher guarantor FICO along with a DSCR of at least 1.0. If preserving capital is your priority and your credit supports it, our guide to the 15% down DSCR loan walks through how that option works and what it costs.

Factor Two: Loan Amount

Smaller loans carry proportionally higher risk and fixed costs for lenders, so they often price and structure less favorably. Loans below $100,000 may face a 5% to 10% reduction in maximum LTV, which means a 5% to 10% higher down payment.

Practically, an investor buying a $100,000 property might find the maximum LTV drops from 80% to somewhere between 70% and 75%, raising the down payment from 20% to 25% or 30%. If you invest in lower-priced markets, build this into your acquisition math from the start rather than assuming standard leverage.

Factor Three: Leasing Strategy

How you plan to rent the property matters. If your leasing strategy is short-term rental, or STR, rather than long-term rental, or LTR, a 5% reduction in LTV may apply. Short-term rental income is more variable and seasonal than a signed 12-month lease, so lenders build in additional cushion.

If you are buying a property to run as a vacation or short-term rental, plan on roughly 25% down rather than 20% as your baseline expectation.

Factor Four: Borrower Residency

Foreign national borrowers may face a 5% to 10% reduction in LTV, meaning a higher down payment than a domestic borrower with an otherwise identical scenario.

Worth noting alongside this: the broader path for foreign national investors is more accessible than most expect. No US visa and no US credit score are required, just a valid passport from your home country. The higher down payment and a longer reserve requirement are the primary additional conditions.

Factor Five: Property Type

Here is some good news for multifamily investors. Across 1-4 unit properties, LTV is generally treated the same. A duplex, triplex, or fourplex does not typically face a lower maximum LTV than a single-family rental, so you are not penalized on down payment for buying small multifamily.

One property-type exception does apply. Non-warrantable condos may face a 5% lower LTV. If you are financing a unit in a building that does not meet Fannie Mae and Freddie Mac guidelines, our guide to the non-warrantable condo explains why buildings fall into that category and how these deals get financed.

Refinances: Down Payment's Equivalent

On a refinance there is no down payment, but the same LTV logic governs how much you can borrow, which determines your equity requirement and how much cash you can pull out.

For a rate-and-term refinance, the maximum LTV is typically 80%, matching the purchase standard. For a cash-out refinance, the maximum typically runs from 80% down to 75% depending on the scenario, since pulling equity out increases risk. And as with purchases, loans below $100,000 may face a 5% reduction from maximum LTV.

Down Payment Factors at a Glance

Down Payment Is Not the Same as Cash to Close

A critical distinction that catches investors off guard. Your down payment is only one component of the cash you actually need at the closing table.

Cash to close equals your down payment plus closing costs. Closing costs include lender fees, title fees, and the other transaction expenses that accompany any financed purchase. So on a $300,000 purchase with 20% down, your $60,000 down payment is the largest piece of your cash to close, but not the whole figure.

The encouraging news is that both components can be reduced. Two tools, gift funds and seller concessions, let you bring less of your own capital to closing without changing your loan terms.

Reducing the Down Payment: Gift Funds

Down payment assistance is no longer limited to owner-occupied homebuyer programs. OfferMarket's DSCR loan program allows a borrower to contribute a minimum of 5% of the down payment from their own funds, with the remainder coming from gift funds.

Critically, maximum LTV is still permitted with that 5% minimum contribution. Gift funds do not push you into a more conservative loan. If your scenario qualifies for the 85% LTV tier requiring 15% down, you can reach it with 5% of your own money and 10% gifted. Gift funds are available on both purchases and refinances across 1-4 unit properties, and they can be applied to the down payment, closing costs, and paying off or reducing debt.

Two limits matter most. Gift funds generally cannot be used to satisfy reserve requirements, with a narrow exception for Foreign National loans. And eligible donors are restricted to relatives and non-relatives sharing a familial relationship, never a builder, developer, agent, or other interested party to the transaction. Every gift also requires a signed letter stating no repayment is expected, plus documentation verifying the donor's funds and the transfer.

Our full guide to DSCR loan down payment assistance covers donor eligibility, the documentation checklist, and the Foreign National provisions in detail.

Reducing Closing Costs: Seller Concessions

The other side of your cash to close, the closing costs, can be reduced by the seller. On purchase transactions, borrowers can receive a seller concession of up to 3% to 6%, calculated on the lower of the property's sales price or its appraised value. Where you land in that range depends on the note buyer that ultimately purchases your loan.

A concession may be applied toward closing costs, prepaid expenses, discount points, and other financing concessions. Using leftover concession dollars on discount points is often the highest-value move on a long-term hold, since buying down your rate lowers your payment permanently and improves your DSCR.

Two boundaries to understand. A seller concession cannot be applied toward your down payment, which represents equity you must contribute yourself. And because of that, a concession does not count toward the 5% minimum borrower contribution when using gift funds. The two tools are complementary rather than overlapping: gift funds reduce your down payment burden, concessions reduce your closing costs.

Concessions are purchase-only and are negotiated into your purchase agreement rather than granted by the lender, which means the leverage is yours to create. Our guide to the DSCR loan seller concession covers the rules and how to actually get one agreed to.

Assistance Options at a Glance

Reserves Are a Separate Requirement Entirely

Beyond cash to close, DSCR guidelines require a reserve verification, and this trips people up because it sounds like more money you have to produce.

Reserves are a liquidity verification. DSCR guidelines require confirmation that, on top of your cash to close, you hold 3 to 9 months of PITIA in reserve, or 12 months for foreign national borrowers. The important nuance is that reserves are generally verified, not surrendered. You typically satisfy the requirement by providing recent bank, brokerage, or retirement account statements showing the funds exist. You keep the money.

Note that neither gift funds nor seller concessions change this requirement. Both tools reduce your cash to close, but reserves must still be verified from your own funds, with the single exception of Foreign National loans where gift funds may count.

Our guide to DSCR loan reserve requirements covers this in full, including scenarios where a portion of cash-out proceeds can count toward the verification and the one structure where payment reserves are escrowed.

So a complete picture of what you need for a DSCR purchase looks like this: down payment, plus closing costs, equals cash to close, potentially reduced by gift funds and a seller concession, and separately, verified reserves of 3 to 9 months of PITIA.

How to Find Out Your Actual Number

Because so many variables interact, the only way to know your real down payment is to price your specific scenario. A 720 FICO investor buying a $350,000 long-term rental single-family home and a 690 FICO investor buying an $100,000 short-term rental condo are looking at very different requirements, even though both are DSCR loans on 1-4 unit residential property.

The efficient move is to submit your loan request for an instant quote, followed by an expert loan review from an OfferMarket team member. The instant quote gives you a fast read on where your scenario lands, and the expert review confirms the details and identifies which note buyer guidelines best fit your deal, which is what ultimately determines your maximum LTV, your concession limit, and therefore your down payment.

Closing Thoughts

The standard DSCR loan down payment is 20%, or 80% LTV, but the actual requirement on your deal depends on several factors. A 700 FICO is generally the cutoff for maximum LTV, and 720 or higher with a DSCR of at least 1.0 can unlock 15% down on a purchase. Loans under $100,000 may see a 5% to 10% LTV reduction, short-term rental strategies may see 5%, foreign nationals 5% to 10%, and non-warrantable condos 5%, while 2-4 unit properties are generally treated the same as single-family. On refinances, rate-and-term typically maxes at 80% and cash-out at 80% to 75%.

From there, two tools reduce what you personally bring. Gift funds can cover everything above a 5% minimum borrower contribution while preserving maximum LTV, and on purchases a seller concession of 3% to 6% can offset closing costs, prepaids, and discount points. Remember that your down payment plus closing costs equals cash to close, and that reserves of 3 to 9 months of PITIA, or 12 for foreign nationals, are a separate liquidity verification rather than money you hand over. Submit your scenario for an instant quote and an expert review, and you will know your real number before you make an offer.

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