DSCR down payment at a glance
You are pricing a rental and need to know how much cash to line up. The table shows what lenders in the market typically ask today. Each lender writes its own guidelines, so treat these as the normal range.
| Situation | What lenders typically ask |
|---|---|
| Purchase, all borrowers | 20% to 30% down, a maximum LTV of 70% to 80% |
| Strong credit and rent | Closer to 20% down with a score above 700 and a ratio of 1.0 or better |
| Middle of the range | About 25% down with a score in the 660 to 700 area |
| Lower credit, or rent that barely covers the payment | 25% to 30% down, with fewer lenders to choose from below 640 |
| Ratio under 1.0 | Maximum LTV often 70% to 75%, so 25% to 30% down |
| First time investor | Often 25% to 30% down, plus more months of reserves |
| Short term rental | Often 20% to 25%, more at some lenders or for a new host |
| Cash out refinance | No down payment. Lenders leave 25% to 30% equity (LTV 70% to 75%). |
| Reserves after closing | 3 to 12 months of the full monthly payment |
Market ranges as of October 2026, drawn from published lender guidelines and industry guides. Advanced Funding Solutions is a broker and does not set these numbers. The lender that funds your loan sets your actual terms.
LTV means loan to value: the loan as a share of the price. An 80% LTV loan means you put 20% down. Every point of LTV the lender gives up is a point of cash you bring.
What moves your down payment up or down
Two investors can buy the same house and put down different amounts. Three things decide where you land in the range: your credit score, how well the rent covers the payment, and the type of property.
A score above 700 and a rent ratio of 1.0 or better tend to open the highest LTVs, which means the lowest down payment. A ratio close to 1.0 or a score near the minimum can move you toward 30% down. You can test your own ratio in our DSCR calculator.
Property type matters too. Short term rentals and condos in projects the lender dislikes usually get a lower maximum LTV than a single family rental. For the full list of credit, reserve and rent rules, see our guide to DSCR loan requirements in California.
Why no money down does not work
Every investor hopes to buy a rental without writing a big check, so the offers for a DSCR loan with no money down show up often. A DSCR lender decides on the property and not on your income, so the cash you put in is the main thing standing between the lender and a loss.
That is why purchase loans stop near 80% of the price. A 15% down payment would mean 85% financing, which sits above the range lenders publish. When you see an offer for 100% financing, the rest of the money usually comes from a second loan, seller financing or a partner. It is worth asking where that money comes from and what it costs.
If the goal is a low cash outlay, there are honest routes. A conventional, FHA or VA loan allows a much smaller down payment, but those loans are for homes you live in. You can also buy with a partner, or build equity in a property you own and use a cash out refinance to fund the next purchase.
Cash you need beyond the down payment
The down payment is only the first check you write. At closing you also pay the costs of the loan, and afterward the lender wants to see cash left in your account.
- Closing costs: the lender fee, the appraisal, title and escrow charges, and recording fees.
- Prepaid items: the first months of property tax and insurance, which the lender collects up front.
- Reserves: 3 to 12 months of the full payment (principal, interest, taxes, insurance and HOA dues) that stay in your account after closing.
- Earnest money: the deposit you put down with your offer, which counts toward your down payment.
Reserves are not spent at closing. They only have to be there, and the lender checks. Plan for them as part of the cash you need to qualify, not as money you can use for repairs.
A worked example with round numbers
Say you want to buy an $800,000 rental and you expect it to rent for $5,400 a month. The numbers below are round figures for teaching, not a quote and not a real deal.
| Item | Amount |
|---|---|
| Down payment at 25% | $200,000 |
| Loan amount | $600,000 |
| Closing costs (assumed for this example) | $20,000 |
| Reserves: 6 months of a $4,500 payment | $27,000 |
| Cash you need to have | $247,000 |
The rent of $5,400 against a payment of $4,500 gives a ratio of 1.2, which clears the usual 1.0 floor. Your total cash lands near 31% of the price, well above the 25% on the headline. Your actual closing costs follow the loan size and the fees of the lender and title company you use.
Where the down payment can come from
You may have the cash in more than one place, and lenders care about where it came from. Bank and brokerage statements usually prove it. Proceeds from selling another property are common, and a large new deposit needs a written explanation.
Borrowed money is where deals get stuck. Cash you borrowed against another property, or a gift from a relative, is a question for the lender before you write an offer, because many lenders restrict both on investment loans. Ask us first and we will check which lenders allow it.
California prices and your down payment
California prices turn a percentage into a large check. At 25% down, a $1,000,000 rental takes $250,000 before closing costs and reserves. That is why many investors here compare a lower priced rental, a partner or a cash out refinance on a home they already own.
The price also drives the ratio. California resets the property tax base when a home sells, so the tax line in your payment is figured on your purchase price. A higher price raises the payment, which can pull a ratio under 1.0 and push your down payment toward 30%.
When a DSCR loan is the wrong fit
If you plan to live in the home, a DSCR loan is not available, and a conventional, FHA or VA loan will ask for far less cash down. If your tax returns show steady income, a conventional loan usually costs less than a DSCR loan, so take it.
If you cannot reach the full cash to close, do not stretch the reserves to make the down payment. A smaller purchase or a partner is a safer path than a loan you cannot carry through a vacancy.
Talk through your numbers with us
You do not need to guess how much cash you will need. Advanced Funding Solutions is a California mortgage brokerage that works with 100+ wholesale lenders. We check which of them fit your credit, your rent and the cash you have, and the lender you choose approves and funds the loan.
The first call is a handful of questions about the property, the rent and what you plan to put down. Call (818) 478-2555, or request a quote online.
For the full picture on investor financing here, see our main page on DSCR loans in California. Our guide to 2026 DSCR loan rates in California explains how your down payment affects pricing.
Frequently Asked Questions
Can I get a DSCR loan with 15% down?
Rarely. A 15% down payment means an 85% loan to value, and most DSCR lenders stop at 70% to 80%. If you find a lender that goes higher, expect a top credit score, a ratio well above 1.0 and a price that costs more every month.
Is there a DSCR loan with no money down?
No, not on a purchase from a legitimate lender. DSCR lenders do not check your pay, so the cash you put in is their main protection. A pitch that promises no money down usually moves the cost somewhere else, such as a second loan or seller financing.
Does a bigger down payment lower my rate?
Often, yes. A lower loan to value is less risk for the lender, and pricing usually improves as the loan shrinks relative to the price. Credit score and the rent ratio matter just as much. Our guide to DSCR loan rates in California covers what moves the price.
Do I need the down payment saved before I make an offer?
Yes, in practice. Your earnest money comes out of your own account, and the lender asks for statements that show where the rest of the cash came from. A large deposit that appeared last week needs a written explanation.
What do I put down on a cash out refinance?
Nothing, because your equity plays that role. Most lenders leave 25% to 30% equity in the home, which matches a maximum loan to value of 70% to 75%. The lender then looks at the rent against the new payment, as on a purchase.
Advanced Funding Solutions Inc. is a licensed mortgage brokerage, not a lender. NMLS #1277693. CA DRE #01973518. Consumer mortgage loans are licensed in California and Florida; DSCR loans are business purpose loans. All loans are subject to credit, income, asset, property, and underwriting approval. The funding lender sets rates, terms and conditions, which can change without notice. Market ranges on this page are typical industry figures as of October 2026, not an offer or a commitment to lend. Equal Housing Opportunity.