How Much Down Payment Do You Need for an Apartment Building in Texas?
Terrydale Capital
Aug 19, 2026 9 Min read
Ask five brokers this question and you'll probably get five different answers. That's not because anyone's lying to you. It's because the number genuinely depends on which loan program you end up using, how many units the property has, and honestly, a few other details that most articles skip right past.
Here's what it actually looks like once you break it down by program.
Why There Isn't One Answer
Multifamily has more financing paths than almost any other commercial property type. A retail buyer or an industrial buyer is usually choosing between a bank loan and maybe a bridge loan. An apartment buyer is choosing between agency debt, bank financing, DSCR loans, bridge loans, and sometimes life company money, and each one plays by different rules on leverage.
Unit count changes things too. Four units or fewer, you're in residential financing territory. Five units or more, you're in commercial multifamily, and that's a completely different set of lenders and requirements.
What Each Loan Type Actually Requires
Fannie Mae and Freddie Mac agency loans give you the most leverage of any multifamily option, assuming the property is stabilized and well located. Depending on the deal, you're looking at loans up to around 75% to 80% LTV, which puts your down payment somewhere in the 20% to 25% range. It's usually the cheapest path to ownership on paper. The tradeoff is documentation. Agency underwriting wants full financials, and the process takes longer than most of the alternatives.
DSCR loans qualify the property on its own rental income rather than your personal tax returns, and down payments generally land in that same 20% to 25% window. Smaller apartment buildings and short-term rental conversions tend to sit closer to 25%, especially if the DSCR itself is thinner or your overall risk profile is a little higher. One thing worth knowing: putting more money down can offset a weaker DSCR number. If your ratio is borderline, a bigger down payment sometimes gets you across the finish line.
Conventional bank loans run in a similar range, usually 25% to 30% down, but the number moves around based on your relationship with the bank, the property's condition, and how the local market looks. Community and regional banks in Texas will sometimes work with a strong local borrower on the lower end of that range, particularly if you've closed deals with them before.
Bridge loans for value-add deals ask for more skin in the game, typically 25% to 35% or higher. Makes sense when you think about it. These loans are financing a business plan, not a finished product, so the lender wants a bigger equity cushion in case leasing takes longer than expected or renovation costs run over.
Small multifamily, the 2 to 4 unit range financed through residential-style DSCR programs, tends to be the least flexible on leverage. Most of these cap out around 75% LTV on a purchase, so you're putting down 25% no matter how good your DSCR looks or how strong your credit is. Refinances on these smaller properties are even tighter, often capped closer to 70% LTV.
Let's Run Real Numbers
Say you're looking at a 24-unit stabilized property in Fort Worth listed at $3.2 million. Go the agency route at 75% LTV and you need $800,000 down before closing costs. A DSCR loan at similar leverage lands you in roughly the same place, though the pricing and paperwork differ. Go conventional bank financing at 70% LTV instead, and now you need closer to $960,000.
That's a $160,000 swing on one deal. If you're an investor working with a limited amount of equity across multiple acquisitions, that difference decides which properties you can actually chase.
What Moves the Number Within Each Range
A few things push your specific requirement up or down inside these ranges. How stabilized the property is matters a lot. Fully leased with no deferred maintenance gets you better leverage than something with vacancy or a punch list of repairs. Experience helps too, especially on bigger deals. A sponsor who's done this before can often negotiate better terms than a first-time buyer looking at the exact same property.
Most lenders using DSCR underwriting want to see a ratio somewhere between 1.1 and 1.5, and the stronger that number, the more leverage you tend to get and the less you have to put down.
Why It's Worth Knowing This Before You Start Looking
Buyers who figure this out ahead of time save themselves a lot of grief. It's a lot easier to walk away from a deal analysis than to fall in love with a property and then discover your capital doesn't actually match the loan program you assumed you'd use. Twenty percent down works fine on a clean, stabilized agency deal. It doesn't work the same way on a value-add property with real upside, because that upside is exactly what makes the lender want more equity in the deal.
If you're weighing whether a DSCR loan makes sense for your situation, we wrote about qualifying for one in Texas here. And our multi-family loan programs page covers the full lineup, from agency and DSCR through bridge financing, for buyers anywhere in Texas.
We help apartment buyers across Texas figure out which loan program actually fits their capital and their goals, then negotiate terms across banks, agency lenders, and DSCR programs to land the best deal available. If you're trying to figure out what you actually need to put down on your next building, get in touch with our team.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
