Investment Property Down Payments: Every Loan Type, One Table

The minimum down payment on a rental is set by two questions: will you live in the property, and who is taking the risk on the loan. Answer those and the range narrows from "anywhere between 0% and 30%" to one or two real options.

The minimum is also rarely the right amount. On the example $200,000 rental worked below, going from 25% down to 15% down raises the annual debt cost by $3,312 to borrow an extra $20,000. That is a 16.6% payment rate on the last slice of debt. Low down payments are available. Whether the deal can afford one is a separate question.

The one table: minimum down by loan type in 2026

These are program minimums under long-standing rules. Individual lenders add their own stricter requirements, and guidelines get revised, so confirm each figure with a loan officer before you plan around it.

Two patterns explain the whole table. Living in the property cuts the down payment by 10 to 25 points, because owner occupants default less and government programs exist to serve them. Leaving the agency system for DSCR or portfolio money does not reduce the down payment. It buys easier qualifying, and you pay for that in rate and fees.

Conventional investment loans: the 15 to 25 percent tiers

Conventional loans are the ones sold to Fannie Mae and Freddie Mac. For a rental you will not live in, the tiers are simple: commonly 15% down on a single unit and 25% down on a duplex, triplex or fourplex.

The 15% option comes with strings that push most investors to 20% or 25% anyway.

• Mortgage insurance. Any conventional loan above 80% loan-to-value carries private mortgage insurance, and it costs more on an investment property than on a residence.
• Pricing tiers. Conventional rates are built from a grid of adjustments by loan-to-value, credit score and occupancy. Investment property at 85% loan-to-value sits in an expensive corner of that grid. The rate usually improves at 80% and again at 75%.
• Reserves. Expect to show liquid reserves after closing, commonly six months of the property's full payment, with more required as your count of financed properties grows.
• No gifts. Conventional rules do not allow gift funds toward an investment property purchase. The down payment has to be your own money or funds borrowed against an asset you own.

Rental income helps you qualify. Lenders usually credit 75% of the lease or market rent against the new payment in your debt-to-income ratio, so a property with solid rent does not sink your ratios the way its full payment would.

The down payment is only part of the cash you need. Closing costs, prepaid taxes and insurance, initial repairs and reserves sit on top of it, and the full cash requirement for a first rental works through the total.

Owner-occupied routes: FHA, VA, and 5 percent conventional

If you are willing to live in one unit of a small multifamily building, the down payment drops to single digits. This is the house hack, and it is the only legitimate way to buy up to four units with very little down.

The three routes, briefly:

• FHA at 3.5% down. Available on one to four units. It carries an upfront and an annual mortgage insurance premium, and three and four unit properties must pass a self-sufficiency test in which rent credited at 75% covers the full payment.
• VA with often nothing down. For eligible borrowers, on one to four units, with a funding fee in most cases. For those who have the benefit it is the strongest purchase loan available.
• Conventional at 5% down on two to four units. No self-sufficiency test and no upfront insurance premium, with private mortgage insurance that can come off later. The 5% down conventional route for house hackers covers the details and how it compares with FHA.

All three require real occupancy. You are generally expected to move in within about 60 days and live there for at least a year. Claiming occupancy on a property you intend to rent from day one is fraud, and lenders do check.

The trade is that your housing and your investment become one asset for a year. The right way to evaluate it is on both sides: what the building earns as a rental after you move out, and what your net housing cost is while you live there. The house hack calculator runs both views from one set of inputs.

DSCR and portfolio: what the flexibility costs upfront

DSCR and portfolio loans solve qualifying problems. They do not solve cash problems. Expect 20% to 25% down on a DSCR loan, more if the rent barely covers the payment, and whatever the bank's credit policy says on a portfolio loan. On top of the down payment, these loans commonly add points at closing, prepayment penalties, and their own reserve requirements.

Here is the cash to close on an example $300,000 purchase, using an example 3% for closing costs and example points where they are typical. Reserves are extra in every row.

The rows are not interchangeable: the 15% investment row applies to a single unit, and the 5% owner-occupied row applies to two to four units. The spread from top to bottom is $66,750 at the same price. The top two rows require you to live there. Among the investor routes, the gap between 15% conventional and 25% conventional is $30,000, and the next section shows, on a smaller example, what a gap like that does to returns.

How down payment size moves your returns both directions

A smaller down payment spreads your cash across more property. It also raises the payment on each one. Whether that helps depends on the deal's yield compared with the cost of the extra debt, and the effect runs in both directions.

Example: a $200,000 single family rental with $6,000 of closing costs. At 25% down the loan is $150,000 at an example 7.00%. At 15% down the loan is $170,000 at an example 7.375%, because of the pricing tiers, plus an example $100 a month of mortgage insurance.

The extra $20,000 of borrowing adds $3,312 a year to the payment. That is 16.6% of the amount borrowed, because the higher rate and the insurance apply to the whole loan, not only the last slice.

Now run three levels of net operating income through both structures.

At the high yield, less money down wins by a little: 18.6% against 17.9%. At the base case it loses badly, 4.8% against 9.0%. In the weak year the 15% buyer is writing checks while the 25% buyer still clears $1,024. The crossover sits at $21,250 of NOI, a 10.6% cap rate on this price. Below that yield, the smaller down payment lowers your cash-on-cash return at these example terms.

Borrowing more amplifies value changes in the same two-sided way.

This is the real argument for small down payments: more property per dollar, and so more exposure to appreciation and to rent growth over time. It is a fair argument in a rising market and a painful one in a falling market, and the buyer with thin cash flow has less ability to wait out the bad years. High debt pays when the property's yield is above the cost of the debt or when values rise. It costs you when neither happens.

Matching the loan to your cash and your deal

Work through it in this order.

1. Decide whether you will live there. If yes, you are choosing among FHA, VA and 5% conventional, and the cash needed falls by tens of thousands of dollars.
2. If not, start with conventional. Get quotes at 15%, 20% and 25% down on the same day. The rate and insurance differences between the tiers tell you what the extra borrowing costs.
3. Go to DSCR or portfolio only when a wall forces you. Tax returns that do not qualify, too many financed properties, or title in an LLC are reasons. A wish to put less down is not, because these loans do not offer that.
4. Size the down payment to the deal's yield. Compute the payment rate on the extra debt, as in the 16.6% example. If the property's cap rate is well below it, the larger down payment earns more per dollar, and the cash you keep back needs a better use than sitting idle.
5. Protect reserves first. A 15% down payment with six months of reserves beats a 25% down payment that empties your accounts. The first bad month decides which buyer keeps the property.

The fastest way to see all of this for a specific property is to change one input. In the single family calculator, enter the deal, then move the down payment percentage from 25 to 20 to 15 and adjust the rate and mortgage insurance to match your quotes. Watch cash-on-cash and monthly cash flow move with each step. The best loan is the one the deal can afford, and the calculator will show you where that line sits before a lender does.