Use an investment-property quote
Do not apply an owner-occupied FHA or first-time-buyer down-payment example to a property you will hold entirely for rent. Ask for the loan category, occupancy rules, down payment and reserve requirements for the specific property. Unit count and borrower experience can change the analysis.
Compare the source of funds
Document gifts, asset sales, cash savings or borrowed funds under the actual loan program’s rules. If funds come from another secured loan, include the repayment and disclose the obligation. Ask whether business assets can be used without impairing the business.
Budget beyond acquisition
Cash to close can include points, prepaids and escrow deposits in addition to the down payment. Reserves are funds kept after closing, not another fee paid to the seller. Keep a separate repair and vacancy buffer so a lender’s minimum does not become your entire operating plan.
A question worth asking
Are lender reserves the same as closing costs?
No. Reserves generally refer to funds remaining after closing, while closing costs are transaction expenses. Confirm the lender’s definitions.
Check the source
Primary references checked October 28, 2026. Rules and product availability can change; confirm the requirements for your actual transaction.