The down payment for a Debt Service Coverage Ratio (DSCR) loan can vary widely depending on the lender’s requirements and the specific property being financed. DSCR loans, primarily used for investment properties, focus on the property’s ability to generate income rather than the borrower’s personal income.
Typically, lenders may require a down payment ranging from 20% to 30% for a DSCR loan. However, this can vary based on factors such as the property type, the borrower’s credit history, the property’s location, and the lender’s specific policies. Some lenders might require a higher down payment for properties with lower DSCRs, as a lower DSCR indicates higher risk.
It’s important to shop around and speak with multiple lenders to understand their specific requirements for DSCR loans, as terms and conditions can differ significantly.