If you’re an investor eyeing a multifamily rental property, you’ve likely wondered how much cash you actually need to close the deal.
At Park Place Finance, we’ve helped fund over $1 billion in investment property loans—and we’re here to break down exactly what you need to bring to the table.
In this article, we’ll explain how much you should expect to put down on a DSCR multifamily loan, what factors impact that number, and how our loan structure gives you more leverage with less paperwork.
Whether you’re scaling your rental portfolio or completing a BRRRR strategy, this guide will help you plan your next move.
Start your application with Park Place FinanceWhat is a DSCR multifamily loan?
A debt service coverage ratio (DSCR) loan is a type of investment property financing that qualifies you based on property cash flow, not personal income.
“DSCR” measures the property’s ability to cover its loan payments using rental income.
DSCR formula:
DSCR = Rental Income / PITIA
PITIA = Principal + Interest + Taxes + Insurance + HOA dues (if applicable)
A DSCR of 1.0 means the rental income equals your monthly debt service. Anything above 1.0 means positive cash flow—and usually earns you better rates.
Conversely, a DSCR under 1.0 indicates negative cash flow; however, many private lenders—including Park Place Finance—will still consider loans with a DSCR as low as 0.75.
Who are DSCR loans for?
DSCR loans are especially attractive to self-employed investors, investors with multiple properties, or those who use legal entities to manage their portfolios.
Because there’s no need to verify income or provide tax returns, DSCR financing offers a faster, simpler approval process that focuses on the investment’s performance—not your personal finances.
With Park Place Finance, DSCR loans are available for single-family homes, 2–4 unit properties, condos, and 5–10 unit multifamily portfolios, offering flexibility for investors expanding across various asset types.
How much is the down payment on a DSCR multifamily loan?
In short, you’ll typically need a down payment of 15% to 20%.
Here’s why:
- Maximum (loan-to-value) LTV: Park Place Finance offers up to 85% LTV on purchases.
- Realistic LTV cap: In most cases, the practical limit is 80% LTV = 20% down payment
Typically, DSCR loans will never exceed 80% LTV. That means that the borrower needs to bring about 20% + closing costs as a down payment.
DSCR example
If you’re purchasing a $1,000,000 multifamily property:
- 85% LTV = $150,000 down (rare)
- 80% LTV = $200,000 down (most common)
Closing costs, reserves, and other fees are extra.
Keep in mind that while some lenders claim to offer higher LTVs, those offers often come with trade-offs—such as higher interest rates, tighter underwriting, or stricter reserve requirements.
Park Place Finance strikes a balance between flexibility and risk management, making their DSCR loan terms investor-friendly without exposing you to unmanageable leverage.
What affects your required down payment?
While 20% down is the baseline, your actual required equity may shift based on the following:
1. Your DSCR ratio
The debt service coverage ratio plays a major role in determining not only your rate but also your required down payment.
Park Place Finance allows DSCRs as low as 0.75, which is highly competitive. However, if your DSCR is 1.2 or higher, you may qualify for more favorable pricing or terms.
Lenders view higher DSCRs as indicators of stronger cash flow, meaning lower risk. In some cases, a high DSCR could also support a slightly higher LTV, depending on the rest of your borrower profile.
2. Loan type
Different transaction types carry different leverage limits:
- Purchase: Up to 85% LTV possible (typical: 80%)
- Cash-out refinance: Max 75% LTV
If you’re refinancing after completing a value-add project (like a BRRRR strategy), your updated property value and rental income will be reassessed to determine eligibility.
3. Credit score
- Minimum required: 660
- A credit score in the 700+ range typically opens the door to better pricing and, in some cases, reduced point requirements.
Although DSCR loans don’t rely on your debt-to-income ratio, lenders still review your credit history to evaluate payment behavior and determine final rate and terms.
4. Property type and stability
Properties with stable, documented rent rolls are generally lower risk and easier to finance with less down.
However, certain property types may trigger increased down payment requirements:
- Vacant properties: Require projected rent estimates (market rents)
- Short-term rentals (Airbnb): Must meet income history guidelines
- Unique assets (condotels, non-warrantable condos): May require more equity
Have a clean lease agreement or a trailing 12-month income statement (T12) available for underwriting. It strengthens your position.
Eligible properties for DSCR loans
You can use a DSCR loan from Park Place Finance to fund:
- Single-family rentals
- Duplex, triplex, quadplex
- Condos (warrantable and non-warrantable)
- 5–10 unit multifamily portfolios
- Airbnb/STRs
- Vacant rentals (if market rent supports DSCR)
Unlike agency or bank loans, which often limit the number of financed properties or restrict property types, Park Place Finance DSCR loans are built for scale.
This is ideal for investors looking to expand aggressively or consolidate their portfolio through a refinance.
Additionally, properties must be located in urban or suburban areas across 46 states, with no rural properties permitted. This ensures the properties are in rent-ready markets with demand and liquidity.
What is the required documentation for a DSCR multifamily loan?
Even though you don’t need tax returns or pay stubs, Park Place Finance does require:
- Purchase contract (if purchase)
- Property lease (or expected rent)
- Last 2 bank statements
- Real estate owned (REO) list
- Insurance policy
- Driver’s license
- LLC documents (if applying in an entity name)
- Payoff statement (if refinancing)
The underwriting process is fast, common-sense, and typically closes in as little as 14 days.
You’ll work with in-house capital and direct decision-makers, avoiding the bureaucracy of banks or wholesale lenders.
By preparing these documents ahead of time, you can expedite the closing timeline and present a stronger, more organized borrower file.
How PPF’s DSCR loans compare to bank financing
Here’s how Park Place Finance’s DSCR loan stacks up against conventional financing:
Income documentation:
- PPF DSCR: No tax returns or W-2s required
- Bank loans: Full income documentation required
Loan-to-value:
- PPF DSCR: Up to 85% LTV (typically 80%)
- Bank loans: Usually 75%–80% LTV
LLC vesting:
- PPF DSCR: Allowed
- Bank loans: Not allowed under Fannie/Freddie rules
Credit reporting:
- PPF DSCR: Only reported if defaulted
- Bank loans: Reported to credit bureaus
Closing speed:
- PPF DSCR: Close in as little as 14 days
- Bank loans: Typically 30–45+ days
For many investors, the ability to close quickly, qualify based on rental income, and finance under an LLC structure makes DSCR loans an ideal fit.
Add to that the fact that they’re available nationwide, and you have a scalable strategy for portfolio growth.
FAQ: DSCR multifamily loans
Can I use a DSCR loan to finance a 5–10 unit multifamily property?
Yes. Park Place Finance offers DSCR loans for multifamily portfolios with 5 to 10 units, making it an ideal option for mid-sized rental investments.
What’s the typical down payment required?
While the maximum LTV is 85%, most investors should expect to put down 20% of the purchase price plus closing costs.
Does my personal income affect the down payment?
No. Park Place Finance does not consider your W-2s, tax returns, or debt-to-income (DTI). Approval is based on property cash flow and credit profile.
Can I get 85% LTV with a lower credit score?
Possibly, but higher LTVs typically require stronger credit and a DSCR above 1.0. The minimum credit score is 660.
Is the down payment different for cash-out refinances?
Yes. For cash-out refis, the max LTV is 75%, which means you’ll need at least 25% equity in the property.
Ready to scale your multifamily portfolio?
If you’re building a rental portfolio with 5–10 unit multifamily properties, expect to bring 20% down for a DSCR loan with Park Place Finance.
With no income documentation required, LLC eligibility, and quick closings, these loans are tailor-made for savvy investors.