Not on a straight purchase. Every DSCR loan caps how much of the value it will lend, so a buyer brings the rest. But there are honest ways to bring far less than the full 20 percent in cash, and one of them can come close to nothing new out of pocket. This page works through the numbers on each, and flags the "no money down" schemes that end with a borrower in federal court.
There is no mainstream DSCR loan that finances 100 percent of a purchase price. That is not one lender being cautious. The loan is sized on the property alone, with no look at your income to fall back on, so the lender needs a cushion of equity between what it lends and what the house would fetch in a forced sale. That cushion is your down payment.
On our lending partners' DSCR program the cap is 80 percent of value on a purchase or a rate-and-term refinance, and 75 percent on a cash-out refinance, according to the lender's rental program sheet. So on a straight purchase the floor is 20 percent down. Lenders who advertise 10 or 15 percent down exist, and they usually charge for it in rate, points and a tighter credit score requirement.
So the useful question is not "who does zero down" but "how do I get this rental without writing a check for a fifth of the price." That has real answers. They all work by using equity that already exists somewhere, either in a property you own or in a property you are about to make worth more.
Start with the baseline the other routes have to beat. Take a $220,000 single-family rental bought with a DSCR loan at 80 percent of value:
Down payment: $44,000. Loan: $176,000. Origination points: between about $2,640 and $5,260, depending on where the file prices between 1.5 and 2.99 points. Title, appraisal, insurance and prepaid taxes come on top.
At an illustrative 7.25 percent over thirty years, principal and interest run about $1,201 a month. Add an assumed $350 a month for taxes and insurance and the full payment is roughly $1,551. On a single property the lender's sheet has called for a coverage ratio of about 1.20, which means the house needs to rent for about $1,861 a month or more.
That is somewhere near $50,000 of your own money into one house, before reserves. Everything below is about shrinking that number without breaking a rule.
This is the path most investors mean when they say "no money down," and it is usually called BRRRR: buy, rehab, rent, refinance, repeat. The down payment is not avoided. It is financed on the way in by a short-term renovation loan and recovered on the way out by the DSCR refinance.
Here is how it works on our lending partners' published terms. Say you find a house needing work for $130,000 and budget $38,000 to renovate it, for a total cost of $168,000. A comparable finished house nearby supports an after-repair value of $240,000.
The way in. The fix-and-flip program lends up to 100 percent of cost where the deal qualifies, but never more than 70 percent of the after-repair value. Seventy percent of $240,000 is $168,000, exactly the total cost, so this deal can be financed in full. Standard pricing under the lender's underwriting guidelines is 12.99 percent interest and 2.99 points; the lower rate on the program page is reserved for borrowers who have already paid off two loans with that lender. On $168,000 that is about $5,020 in points and about $1,819 a month in interest-only payments. Six months of renovation and leasing is roughly $10,900 of interest.
The way out. Once the house is finished and rented, it is appraised again. A cash-out DSCR refinance at 75 percent of $240,000 is a $180,000 loan. It pays off the $168,000 renovation loan and hands back about $12,000, less the new loan's points of roughly $2,700 to $5,380. At 7.25 percent the new payment, with the same $350 of taxes and insurance, is about $1,578, so the house needs to rent for around $1,894 to clear a 1.20 ratio.
The honest total. Add the points on both loans and the renovation interest, subtract the $12,000 that comes back, and something in the region of $7,000 to $10,000 stays in the deal, plus title and appraisal fees. You also have to show reserves: the lender's guidelines call for $15,000 in the bank on its renovation loans. Shown, not spent. Compare all of that with the $44,000 down on the straight purchase above.
The appraisal comes in low. Every number above hangs on the $240,000. At $225,000 the renovation loan's 70 percent cap drops to $157,500, so you bring about $10,500 more on the way in, and the refinance at 75 percent is only $168,750, barely enough to pay off what you owe.
The renovation runs over. For borrowers with one or no completed deals, the lender's guidelines cap the rehab budget at $40,000. A $38,000 plan leaves almost no room. Overruns come out of your pocket, not the loan.
The rent comes in short. The DSCR refinance is sized on the appraiser's market rent. If the house rents for $1,700 instead of $1,900, the ratio fails at that loan amount and the refinance shrinks.
The clock. Many DSCR lenders will lend on the new appraised value only after you have owned the property for a set time; before that they lend against what you paid. Ask for that seasoning rule in writing before you buy, because it decides when your money comes back.
The bar on the house. The lender's guidelines set a minimum after-repair value of $100,000, so the cheapest houses in a market do not qualify for this route at all.
If you already own a rental with real equity in it, this is the route that comes closest to genuinely no new money. Our lending partners' DSCR program allows cross-collateral loans on two or more properties: one loan secured by both the house you own and the house you are buying.
Say you own a rental worth $200,000 with $60,000 still owed on it, and you want to buy a $180,000 house. Together the two are worth $380,000. A single loan of $240,000 pays off the old mortgage and buys the new house outright, and $240,000 is only about 63 percent of the combined value, comfortably inside a 75 percent cash-out cap. Your down payment on the new house is equity you have already built.
Two conditions. The rents have to carry the combined payment: on two to four properties the lender's sheet has called for a coverage ratio of 1.00, so the two rents together must at least equal the full payment on both. And closing costs are still yours; on a $240,000 loan the points alone start around $3,600. Portfolio and cross-collateral loans are reviewed case by case, so treat this as a structure to ask about, not a promise.
The same idea works in two steps if you prefer separate loans: a cash-out refinance on the rental you own, then that cash as the down payment on the next one. Either way, the money is real equity, traceable, and disclosed, which is exactly what the lender needs to see.
If you have the deal and the time but not the cash, a partner who has the cash can supply the down payment in exchange for a share of the property. This is ordinary and legal when it is done in the open: the partner becomes a member of the LLC that takes title, the operating agreement says who put in what and who gets what, and the lender sees both. What the lender will not accept is a "partner" who is really a lender in disguise, paid back monthly off the books.
Expect the DSCR lender to ask about everyone who owns a meaningful share of the borrowing entity. Under our lending partners' guidelines, every owner of 30 percent or more personally guarantees the loan, so a money partner above that line is signing too.
Search for "DSCR loan no money down" and you will find confident, contradictory answers about these three. The contradiction is real: DSCR loans are not standardized the way conventional mortgages are, and each lender writes its own rules. So here is what varies, and what to ask.
Gift funds. Some DSCR lenders accept a documented gift from a relative toward the down payment, often only if you also put in some of your own money. Others refuse gifts on DSCR loans altogether. If a gift is your plan, ask before you sign a contract, not after.
A HELOC on your home. Borrowing against your own house to fund a rental's down payment is accepted by some lenders when it is disclosed as the source of funds, and refused by others. The line on your application has to say where the money came from.
Seller credits. A seller can often contribute toward your closing costs and prepaid taxes and insurance, up to a cap the lender sets. Published caps range from about 2 to 6 percent of the price. A seller credit does not reduce the down payment itself, but on a $220,000 house a 3 percent credit is $6,600 you do not bring to closing.
Some zero-down pitches work by hiding something from the lender: a seller who secretly carries the down payment as a second loan, a purchase price inflated so the "down payment" is fictional, a personal loan passed through a friend's account so it looks like savings, or a bank statement edited to show money that is not there.
These are not gray areas. Knowingly making a false statement to influence a mortgage lending business is a federal crime under 18 U.S.C. § 1014, and the lender can call the loan due when it finds out. The borrower signs the application, so the borrower carries the risk, not the person who suggested the scheme. If a route requires anyone to keep something from the lender, walk away from it.
DSCR rental loans: $75,000 to $2 million, up to 80 percent of value, rates from 5.99 percent and origination points from 1.5 percent on the lender's program page, with cross-collateral allowed on two or more properties. The rental program sheet lists up to 75 percent of value on cash-outs and a full appraisal on every loan.
Fix-and-flip and bridge loans: up to 100 percent of cost, capped at 70 percent of value, from a $50,000 minimum and a 600 minimum credit score. The 10.99 percent starting rate is available after two loans have been paid off in good standing with our lending partner; a first-time borrower should expect to start above it and earn the way down.
All of it is for non-owner-occupied investment property held in an entity, and program details change, so we confirm the current terms for your property and your state before you commit to a purchase.
Not on a straight purchase. DSCR programs lend up to a set share of the property's value, commonly 75 to 80 percent, and the borrower covers the rest. What investors can do is change where that money comes from: equity in a rental they already own, or a renovation loan that is refinanced into a DSCR loan once the property is finished and rented.
Usually 20 percent of the purchase price, because most programs top out at 80 percent of value. Some lenders advertise 15 or even 10 percent down, generally with a higher rate, stricter credit and a stronger coverage ratio. Our lending partners' DSCR program lends up to 80 percent of value on purchases.
Some DSCR lenders accept a disclosed home equity line as the source of the down payment and some do not. The draw must be documented and shown on the application. Ask before you draw on it, and never move borrowed money through another account to make it look like savings.
It depends entirely on the lender. Some allow a documented gift from a relative, often with a minimum contribution from the borrower's own funds; others do not accept gifts on DSCR loans at all. A signed gift letter and the donor's bank statement are the usual paperwork.
No. Seller credits can usually go toward closing costs and prepaid items, within a cap the lender sets, but not toward the down payment itself. A seller who agrees to quietly carry the down payment as a second loan the lender is not told about is taking part in mortgage fraud.
It can come close, but it is better described as getting most of your cash back. You buy and renovate with a short-term loan, then refinance into a DSCR loan on the new value. Points, interest during the renovation and closing costs usually leave a few thousand dollars in the deal, and the refinance only works if the appraisal and the rent both come in.
Before you count on a rent to carry the payment, our two free landlord books walk through what holding a rental actually costs, state by state.
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Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.