DSCR loans have no PMI option and no low-down-payment programs. The minimum down payment is set by the lender's LTV cap, which ranges from 75% to 85% LTV depending on property type, FICO, and whether it is a purchase or refinance. Borrowers need to bring real equity on day one.
Standard LTV Caps by Transaction Type
- ✦SFR purchase: max 80% LTV (20% down) at most lenders for mid-tier FICO
- ✦SFR cash-out refinance: max 75% LTV (25% equity required)
- ✦2-4 unit purchase: max 75% to 80% LTV (20-25% down)
- ✦Condo: max 70% to 75% LTV (25-30% down)
- ✦Short-term rental: some lenders cap at 70% LTV due to income volatility risk
How FICO Affects LTV Access
Most DSCR lenders tier their LTV caps by credit score. A borrower with a 720+ FICO may access 80% LTV at the best rate tier. A borrower at 640 FICO may be capped at 70% to 75% LTV with a rate add-on. Some lenders offer 80% LTV down to 620 FICO but at significantly higher pricing.
Reserve Requirements
Most DSCR lenders require 3 to 12 months of PITIA reserves after closing. Reserves must be verified liquid assets in the borrower's name. Some lenders accept 401(k) or IRA balances at 60% to 70% of value toward the reserve requirement. The reserve calculation is typically based on the subject property PITIA, not the borrower's entire portfolio. For investors with multiple DSCR loans, confirm whether the reserve requirement stacks across properties.
Aria can compare DSCR down payment and reserve requirements across multiple non-QM lenders and flag LTV differences by FICO tier for any scenario. Ask at vicariointel.com.
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