How Much Down Payment for an Investment Property?

Last updated 07/23/2026 by

Andrew Latham

Edited by

Andrew Latham

Summary:

The down payment on an investment property is the upfront share of the purchase price you pay in cash, with the rest covered by a mortgage.

How much you need depends on the loan type, the number of units, and whether you plan to live in one of them.

Single-unit rental: Conventional lenders ask for the largest down payment of any residence type.
Two to four units: Expect a higher requirement unless you live in one of the units yourself.
House hacking: Occupying one unit can unlock far smaller down payments.
DSCR loans: Qualify on the property’s rental income rather than your personal income.

Financing a rental works differently from buying a home to live in, and the down payment is where the gap shows up first.

Lenders treat investment properties as higher risk, so the cash you bring to closing is larger than most first-time investors expect. Here is what each path actually requires.

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How much down payment do you need for an investment property?

Most investment properties require a down payment between 15% and 25% of the purchase price.

For a single-unit rental with a conventional loan, Fannie Mae sets the floor at 15% down. Two-to-four-unit properties that you will not live in require 25%.

The exact figure moves with the loan type and how many units the property has. On a $300,000 rental, 15% is $45,000 and 25% is $75,000.

Property scenario	Typical down payment	Loan type
Single-unit rental, not owner-occupied	15% to 25%	Conventional
2-4 units, not owner-occupied	25%	Conventional
2-4 units, you live in one unit	As low as 5%	Conventional (owner-occupied)
Rental qualified on its own income	20% to 25%	DSCR

What is the minimum down payment for an investment property?

The minimum down payment for a single-unit investment property is 15% with a conventional loan, according to Fannie Mae guidelines.

You can go lower if you live in the property. Fannie Mae now allows owner-occupied two-to-four-unit homes with as little as 5% down, a change that took effect after November 18, 2025.

That owner-occupied route is why buying your first rental property often starts with a multi-unit building you live in, then convert fully to rental later.

Why investment properties require more down than a primary home

Lenders require larger down payments on rentals because they carry more default risk than a home you live in.

When money is tight, borrowers tend to protect their own home first and let a rental payment slip. A bigger down payment gives the lender more cushion if that happens.

That same risk shows up in the interest rate. Investment property rates typically run 0.5 to 1.5 percentage points higher than rates on a comparable primary residence, whether the loan is conventional or DSCR.

How to lower your investment property down payment

Several strategies can shrink the upfront cash an investment property demands.

Live in one unit of a two-to-four-unit property to qualify for the 5% owner-occupied down payment.
Tap the equity in your current home through a home equity line of credit to fund the down payment.
Use a DSCR loan if the rental income covers the mortgage, since approval leans on the property rather than your paycheck.
Partner with another investor and split the down payment and the returns.
Buy below your maximum budget so the required percentage is a smaller dollar figure.

Pro Tip: Before you commit, check whether the numbers on a property actually work. A larger down payment lowers your monthly payment, but a property that does not cash flow is a problem no down payment can fix.

Down payment and requirements by loan type

Conventional and DSCR loans are the two main paths for financing a rental, and their requirements differ beyond the down payment.

Conventional investment loans generally want a credit score around 680, a debt-to-income ratio no higher than 45%, and roughly six months of cash reserves. DSCR loans skip personal income verification and qualify the loan on the property’s rental income instead.

FHA and VA loans are not available for pure investment properties, since both require you to occupy the home. The owner-occupied multi-unit exception is the only way to use them for a property that also generates rent.

Loan type	Down payment	Key requirement
Conventional, 1 unit	15% to 25%	Around 680 credit, 6 months reserves
Conventional, 2-4 units	25%	Higher reserves for multi-unit
DSCR	20% to 25%	Rental income covers the mortgage
Owner-occupied 2-4 units	As low as 5%	You live in one unit

Mistakes to avoid with an investment property down payment

The most common mistake is assuming the 3% to 5% down you used on your own home applies to a rental. Pure investment properties start at 15% and often need more.

Another is putting down the bare minimum and leaving no reserves. Lenders want to see several months of payments in the bank, and a vacancy or repair can drain a thin cushion fast.

A third is ignoring the rate premium. A smaller down payment on an investment loan compounds with the higher interest rate, raising the monthly payment more than many first-time investors plan for.

Key takeaways

Most investment properties require 15% to 25% down, per Fannie Mae guidelines.
The minimum for a single-unit conventional rental is 15%, with 25% for non-owner-occupied 2-4 units.
Living in one unit of a 2-4 unit property can drop the down payment to as low as 5%.
DSCR loans typically require 20% to 25% down and qualify on rental income, not your salary.
Investment property rates run about 0.5 to 1.5 percentage points above primary-residence rates.

Frequently asked questions

Can you put 10% down on an investment property?

Not on a standard non-owner-occupied rental, where conventional loans start at 15%. You can go below 10% only by living in one unit of a two-to-four-unit property, which allows as little as 5% down.

What is the minimum credit score for an investment property loan?

Conventional investment loans generally require a credit score around 680. DSCR lenders may accept lower scores but usually offset the risk with a larger down payment.

Can you buy an investment property with no money down?

True zero-down financing is rare for rentals. Investors typically reach a low or no cash outlay by tapping equity in another property or partnering with someone who supplies the down payment.

Do you need 20% down on a rental property?

Not always, since conventional single-unit loans allow 15%. Putting down 20% to 25% usually earns a better interest rate and helps the property cash flow.

Can you use an FHA loan for an investment property?

Only if you live in the property, because FHA loans require owner occupancy. Buying a two-to-four-unit building and living in one unit is the common workaround.

Running the down payment and rate side by side shows you which loan type a given property can actually support. Comparing investment property mortgage options before you make an offer keeps the deal grounded in real numbers.