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What's the Minimum Down Payment for an STR DSCR Loan?

There's no single minimum — down payment on a DSCR loan is typically expressed as a maximum loan-to-value (LTV), and that ceiling moves based on your DSCR ratio, credit profile, property type, and the specific lender. Stronger deals on paper generally unlock lower down payment requirements; weaker ones push it higher.

NE

NightYield Editorial

STR-DSCR research & underwriting desk

Published 2026-07-11

What actually moves the down payment number

Instead of a flat percentage, think of down payment as the flip side of maximum LTV — if a lender caps a loan at a given LTV, your down payment is whatever gets you under that ceiling. That ceiling isn't fixed; it flexes based on several factors together.

  • DSCR ratio: a property that comfortably clears the lender's minimum DSCR (often with room to spare) tends to qualify for a lower down payment than one that barely clears it.
  • Credit score: stronger personal credit from the guarantor generally supports a lower down payment requirement, all else equal.
  • Property type: a warrantable single-family home usually has more favorable terms than a condotel, rural property, or unusual construction type.
  • Loan purpose: purchase vs. cash-out refinance can have different maximum LTV structures.
  • First-time STR vs. experienced host: some lenders adjust terms based on whether you have documented STR operating history.
Don't anchor to a number you saw quoted somewhere else — DSCR down payment requirements vary meaningfully by lender and by deal. Check current terms at /str-dscr-rates/ rather than assuming a fixed figure applies to you.

How to actually find your number

Because the down payment requirement is really a function of several variables interacting, the only reliable way to know your number is to run your specific deal — your credit, the property, and its income projection — against current lender terms.

Key takeaways

  • Down payment is really an LTV cap, and that cap shifts with DSCR strength, credit, and property type — there's no universal minimum to quote.
  • A stronger DSCR (more cushion above the lender's floor) generally supports a lower down payment.
  • Run your actual numbers through /str-feasibility-check/ rather than budgeting off a number you saw elsewhere.

FAQ

Is the down payment higher for STR properties than long-term rentals?
It can be, since STR income is often viewed as less predictable than a signed long-term lease, but this isn't universal — a well-documented STR projection in a strong market can perform comparably to LTR underwriting at some lenders.
Can I use a lower down payment if my DSCR is well above 1.0?
Often yes — a DSCR with meaningful cushion above the lender's minimum is one of the strongest levers for better terms, including potentially a lower down payment requirement, though this isn't guaranteed at every lender.
Does down payment size affect my interest rate too?
Generally yes — a larger down payment (lower LTV) typically supports a better rate as well as easier qualification, since it reduces the lender's exposure on the loan.

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