DSCR Loan Down Payment: How Much Do You Really Need?

Published October 2026 · By the SLA Capital team

The headline number is 20% down — DSCR purchase loans go to 80% loan-to-value. But 20% is the start of the cash conversation, not the end of it: closing costs, reserves, and sometimes the DSCR ratio itself all move the real figure. Here's the full worked cash-to-close on a typical rental, what makes the number bigger or smaller, and how BRRRR investors get the down payment back out.

The worked example: a $300,000 rental

• Down payment — $60,000. 20% of purchase, the 80% LTV maximum. This is the floor case; see below for when the ratio forces more.
• Closing costs — roughly $6,500–$9,000. Origination at 1 point standard ($2,400 on the $240K loan), plus title, escrow, appraisal, and recording. See the current rate sheet.
• Reserves — typically a few months of PITIA, liquid after closing. On this deal, figure roughly $6,000–$9,000 you must show, not spend. It stays your money; the lender just wants to see the cushion.

Cash to close: about $67,000–$69,000, with roughly $75,000 of total liquidity to be comfortable. The number scales linearly — a $150K property wants about half that.

When the ratio demands more than the LTV

The quieter constraint is the DSCR ratio itself: market rent ÷ PITIA must clear 1.0 (1.2+ prices best — run your deal here). If 80% leverage produces a payment the rent can't cover at the required ratio, the loan gets sized down until it can — so in lower-rent, higher-price markets, your real maximum is often 70–75% leverage for ratio reasons even though the LTV box says 80%. This is why two investors with identical cash can afford different properties: the rent decides.

What moves the number down (or up)

• Putting 25% down on purpose. A 75% LTV loan prices better than an 80% one and clears the ratio more easily — many experienced buyers treat 25% as the default and 80% as the stretch case.
• Credit tier. A better middle score lowers the rate, which lowers the payment, which helps the same rent support more leverage.
• Interest-only structure. A 5-year I/O period drops the qualifying payment and can turn a ratio failure at 80% into a pass.
• Gift funds and partner capital are generally workable in business-purpose lending, but structure matters — bring it up before underwriting, not during.

Getting the down payment back: the BRRRR answer

On a straight purchase, the down payment stays in the deal. Investors who recycle their cash do it by creating the equity instead of buying it: purchase and renovate with a bridge loan, rent the finished property, then take a DSCR cash-out refinance at up to 75% of the new appraised value. With no seasoning period, that refinance closes as soon as the appraisal supports the number — and if the rehab created enough value, it returns most or all of the original cash for the next deal. The full playbook with numbers is in the BRRRR financing guide.

The bottom line

Plan on 20–25% down plus about 3% in costs and a reserve cushion — roughly $70–75K of liquidity per $300K of property — and let the rent, not the LTV table, tell you your true maximum leverage. We lend $100K–$3M across 42 states, close in your LLC, and the 30-year fixed starts at 7.00% (before buy down: highest credit tier, DSCR 1.20+).