The most common answer you will find online is “20–25% down.” That number is not wrong, but it answers the wrong question. The more useful question is how much total cash you need to close a DSCR loan and safely operate the rental afterward — and the answer is always higher than the headline down-payment percentage.
LendSure Home Loans offers DSCR financing for 1 to 10 unit investment properties with no tax returns, no W-2s, and no personal income analysis. If you have a property in mind, our team can run a scenario based on the purchase price, expected rent, and your available cash before you make an offer.
LendSure’s 2026 DSCR Down Payment Requirements
LendSure’s minimum equity contribution depends on the property type and transaction. As the CFPB notes, required down payments vary based on the loan selected and the lender’s requirements. There is no single universal standard across DSCR lenders, because DSCR loans are non-conforming products where each lender sets its own program guidelines.
For LendSure’s DSCR program:
- 1–4 unit purchase: finance up to 85% LTV — minimum 15% equity contribution
- 1–4 unit rate-and-term refinance: up to 80% LTV
- 1–4 unit cash-out refinance: up to 75% LTV
- 5–10 unit purchase: finance up to 75% LTV — minimum 25% equity contribution
- 5–10 unit rate-and-term refinance: up to 70% LTV
- 5–10 unit cash-out refinance: up to 65% LTV
Down Payment vs. LTV: How the Terms Connect
When a lender says “maximum LTV 80%,” that translates directly to a minimum 20% equity contribution. The two are inverses of each other.
Quick Reference: Down Payment to LTV
| Down Payment | Corresponding LTV |
| 15% | 85% |
| 20% | 80% |
| 25% | 75% |
| 30% | 70% |
One important nuance: LTV is calculated against the property’s appraised value or purchase price, whichever the lender uses for the specific transaction. For a purchase, most lenders use the lesser of the appraised value or purchase price. This matters if the property appraises below the contract price, as the LTV calculation and resulting equity requirement are based on the lower number.
Why DSCR Down Payments Differ From Owner-Occupied Loans
A first-time investor often asks why rental financing requires so much more equity than the 3% to 5% they put down on their primary home. The short answer is that investment properties carry fundamentally different underwriting risk than owner-occupied homes.
Fannie Mae’s Eligibility Matrix illustrates that even conventional investment-property financing carries materially higher LTV restrictions than owner-occupied financing. DSCR loans are a separate non-conforming product category, so their exact requirements come from each individual lender’s program rather than Fannie Mae’s conforming matrix. The principle is the same: investment property = more equity required.
Down Payment Is Not the Same as Cash to Close
This distinction catches more DSCR borrowers off guard than any other. The CFPB’s Loan Estimate guidance explains that Estimated Cash to Close includes more than the down payment — it incorporates closing costs, prepaids, escrow deposits, and adjustments for any credits.
The Three Numbers You Actually Need
Down payment. The equity contribution toward the purchase price.
Cash to close. Down payment plus closing costs, prepaids, and escrow deposits, minus any seller credits or deposits already paid.
Post-closing reserves. Liquid assets the lender requires the borrower to retain after closing — not spent at closing, but verified as available.
These three numbers are not interchangeable. An investor with exactly enough cash for the down payment is rarely ready to close.
What Closing Costs Add to the Total
The CFPB estimates that mortgage closing costs, separate from the down payment, typically run 2% to 5% of the purchase price, though actual costs vary by property, location, lender, and loan. On a $400,000 DSCR purchase with 20% down, the down payment is $80,000. Add estimated closing costs of $8,000 to $20,000 and the cash-to-close figure is meaningfully higher before reserves are even considered.
How Down Payment Affects DSCR
This is one of the most valuable things to understand before you structure a deal: a larger down payment can directly improve your DSCR ratio, because it reduces the loan amount, which reduces the monthly principal and interest payment, which lowers the qualifying housing expense.
Worked Example
A property rents for $3,000 per month. Taxes are $500, insurance is $150, and HOA is $0.
At 20% down ($80,000 on a $400,000 property): P&I on $320,000 loan: approximately $2,000 Total PITIA: $2,650 DSCR: $3,000 / $2,650 = 1.13
At 25% down ($100,000 on a $400,000 property): P&I on $300,000 loan: approximately $1,875 Total PITIA: $2,525 DSCR: $3,000 / $2,525 = 1.19
The higher down payment does not just reduce the loan — it improves the qualifying ratio. For a property that misses the lender’s minimum DSCR at the minimum down payment, increasing the equity contribution is one of the levers available to make the deal work.
Minimum Down Payment vs. Optimal Down Payment
The minimum down payment gets you in the door. The optimal down payment balances leverage, DSCR, rate, and remaining liquidity.
As the CFPB notes, a larger down payment can result in a lower interest rate and improve approval likelihood. For DSCR loans specifically, moving into a better LTV tier can affect both pricing and the qualifying ratio.
The Liquidity Trade-Off
Consider an investor with $150,000 available. Putting $140,000 down leaves $10,000 in reserve: the loan is smaller, the payment is lower, and the DSCR is stronger. But the investor is nearly cash-depleted. Putting $100,000 down leaves $50,000 in reserve for vacancies, repairs, and future acquisitions. IRS Publication 527 lists common rental-property expenses, including maintenance, management fees, repairs, taxes, insurance, and utilities. All of those continue after closing.
The goal is not to maximize the down payment. It is to find the balance between financing structure, qualifying DSCR, and sufficient post-closing liquidity.
Buying Power by Down Payment Amount
The table below illustrates how available cash translates to purchase price at different equity levels. These figures are for illustration only and do not account for closing costs, reserves, or other program requirements.
| Available Down Payment | At 15% Down | At 20% Down | At 25% Down |
| $75,000 | $500,000 | $375,000 | $300,000 |
| $100,000 | $667,000 | $500,000 | $400,000 |
| $150,000 | $1,000,000 | $750,000 | $600,000 |
| $200,000 | $1,333,000 | $1,000,000 | $800,000 |
Actual buying power depends on DSCR, credit profile, loan amount limits, property type, appraisal, and other program requirements.
Ready to Run the Numbers on Your Property?
For investment transactions, you can share the property details with LendSure’s team before submitting a full application.. Bring us the purchase price, expected rent, and your available cash.
Frequently Asked Questions
What is the minimum down payment for a DSCR loan in 2026?
LendSure finances up to 85% LTV on 1 to 4 unit DSCR purchases, meaning the minimum equity contribution is 15%. For 5 to 10 unit properties, the maximum purchase LTV is 75%, requiring at least 25% down. DSCR loans are non-conforming products and minimum requirements vary by lender. These figures reflect LendSure’s current 2026 program guidelines.
Is the down payment the same as cash to close?
No. Cash to close includes the down payment plus closing costs, prepaids, and escrow deposits, minus any seller credits or deposits already paid. On a $400,000 purchase with 20% down, the down payment is $80,000, but closing costs and prepaids will add to the total cash required at closing. Post-closing reserves required by the lender are separate and must remain available after closing.
Can putting more down help me qualify for a DSCR loan?
Yes. A larger down payment reduces the loan amount, which lowers the monthly principal and interest payment, which reduces the qualifying housing expense used in the DSCR calculation. If a property misses the minimum DSCR at the minimum down payment, increasing the equity contribution is one of the available levers to improve the ratio.
Do DSCR loans require mortgage insurance?
LendSure’s DSCR program does not follow conventional PMI mechanics. Mortgage insurance requirements depend on the specific loan program, not on the general rule that conventional borrowers putting less than 20% down typically pay PMI. Confirm the program’s specific structure with your lender rather than applying conventional mortgage rules to a non-conforming DSCR product.
How much should I keep in reserve after closing?
LendSure requires verified liquid or near-liquid reserves after closing. Retirement accounts are acceptable. Beyond the lender’s reserve requirement, investors should retain their own operational cushion for vacancy, repairs, property management, and other ongoing expenses identified in IRS Publication 527. Depleting all available cash at closing, even if it meets the lender’s minimum, leaves no margin for the property’s first unexpected expense.
What down payment do I need for a cash-out DSCR refinance?
LendSure’s cash-out refinance LTV maximums are 75% for 1 to 4 unit properties and 65% for 5 to 10 unit properties. This means at least 25% equity must remain in the property after the cash-out on a 1 to 4 unit, and at least 35% on a 5 to 10 unit. Cash-out is available up to $500,000, with exceptions considered to $3,000,000.
