Market Data Report Requirements For STR Loans — The Quick Read: A market data report is a third-party projection — usually built from a tool like AirDNA’s Rentalizer — that estimates a short-term rental’s annual revenue when there’s no operating history to document. Lenders need it because the standard appraisal rent form isn’t built for nightly-rate math, and most programs discount the raw projection before counting it toward DSCR. Purchases in Lendmire’s wholesale network generally run up to 75% LTV on STR files, cash-out refinances top out closer to 70%, and most programs want a 700+ credit score and roughly 12 months of host or landlord experience behind the borrower. Get the report wrong — thin comps, no occupancy adjustment, wrong forecast window — and the file stalls before it ever reaches DSCR math.
What Is a Market Data Report, Exactly?
A market data report is a modeled income projection for a specific address, built by comparing it against similar active short-term rental listings in the surrounding area. It’s not a lease. It’s not verified income. It’s an algorithm’s best guess at what the property could earn, and every lender in the DSCR space treats it that way — as evidence to be discounted, not a number to be taken at face value.
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The dominant version of this document comes from AirDNA’s Rentalizer tool, which pulls comparable properties from within a defined radius and weights their historical performance by bedroom count, guest capacity, and seasonality. Other platforms exist — Mashvisor is a common alternative — but the mechanics are similar across providers: pull comps, weight by similarity, output a 12-month revenue and occupancy forecast.
Why does this document exist at all instead of just using the appraisal? Because the standard rent schedule appraisers use for investment property — Fannie Mae’s Form 1007 — was built to estimate long-term monthly market rent, not nightly-rate revenue. Fannie Mae’s own guidance is silent on whether STR income should even count as rental income for agency purposes, which is exactly the gap the DSCR/non-QM world had to fill on its own.
Why Can’t the Appraisal Just Cover This?
It can’t, because the form is built for a different kind of lease entirely. Form 1007 (one-unit properties) and its two-to-four-unit counterpart, Form 1025, both assume a monthly tenancy. An appraiser isn’t supposed to take a nightly rate, multiply it by 30, and call that the monthly rent — that’s a misuse of the form, and appraisal-industry guidance is direct about it.
If an appraiser is asked to force STR economics into a 1007, the correct response — per policy guidance discussed by Class Valuation — is to decline the assignment rather than “corrupt or contort” the report. That’s not a minor technicality. A broker who pushes an appraiser toward STR math on a long-term-rent form can end up with a declined assignment and a stalled file. This is precisely why the market data report exists as a separate document rather than something folded into the appraisal itself — and it’s a distinction worth understanding before ordering either one. Lendmire’s related breakdown on twelve months of hosting history versus a market data report goes deeper on when actual booking history should replace the projection entirely.
How Underwriters Actually Use the Report
Step by step, this is what happens to a market data report once it lands in a DSCR file:
1. The property type triggers the requirement. A long-term rental relies on a lease or the appraiser’s rent schedule. An STR file needs nightly-rate economics the appraisal form can’t produce, so a market data report gets ordered separately.
2. The appraisal still happens — on the standard form. The appraiser produces a Form 1007 or 1025 based on long-term comparable rents, regardless of the property’s actual use. That figure typically becomes a floor or a cross-check, not the STR income source.
3. The market data report gets pulled for the specific address. For new acquisitions with no rental history, this is usually an AirDNA Rentalizer-style projection covering trailing and forward 12-month revenue, occupancy, and average daily rate.
4. Existing hosts substitute actual history where it exists. If the property already operates as an STR, trailing platform payout statements or property-management-system reports often carry more weight than a forward-looking model — because they’re actual transactions, not an estimate.
5. The underwriter applies an occupancy floor and a revenue haircut. Nobody counts the raw projection dollar-for-dollar. Programs commonly screen for a minimum occupancy assumption and discount the projected revenue before it touches the DSCR calculation, building in a margin against optimistic modeling.
6. DSCR gets calculated off the discounted number. The haircut-adjusted annual projection is divided by 12 and measured against the property’s full monthly obligation — principal, interest, taxes, insurance, and any association dues — to produce the coverage ratio the file is underwritten against.
7. Legal-operation documentation gets checked in parallel. Zoning, permits, and any local STR restrictions get verified independent of the income number. Strong projected revenue means nothing if the activity isn’t legal on that property.
That haircut step is where a lot of investor confusion lives. Clearing 1.00 on the discounted market-data projection is not the same thing as the property producing positive cash flow. DSCR only measures rent against the mortgage payment — it says nothing about repairs, vacancy gaps between bookings, cleaning and management fees, utilities, or capital expense reserves. A file can clear coverage on paper and still run thin in practice once operating costs are layered on.
What Leverage and Terms Actually Look Like on STR Files
STR purchase files in Lendmire’s wholesale network generally reach up to 75% LTV on the strongest borrowers — those with a 700-plus score, roughly 12 months of host or landlord experience, and clean documentation. Refinance and cash-out transactions run tighter, typically capping closer to 70% LTV, reflecting the added uncertainty in projected (versus leased) income.
Most programs across the network want a minimum coverage ratio of 1.00 on both STR purchases and STR refinances, though that floor is a starting point for qualification, not a target — stronger coverage generally opens better leverage and pricing tiers. Loan amounts on standard STR programs run up to roughly $3,000,000, with smaller-balance deals routing through select lenders that focus on that end of the market. None of these figures are guarantees; every file gets weighed individually against credit, reserves, and the specific market data report the appraiser and underwriter are looking at. Lendmire’s breakdown of DSCR loan requirements for investment properties covers the broader qualification picture beyond the STR-specific pieces.
A larger down payment lowers the monthly obligation and can lift the coverage ratio — but it doesn’t override a leverage cap, a credit floor, or a documentation gap. The strongest STR files clear two separate tests at once: enough equity in the deal, and rental income (verified or projected) that actually covers the payment. A file with 30% down and a thin, unsupported market data report can still get stuck. For cash-out scenarios specifically, seasoning and documentation expectations differ from a purchase file — Lendmire’s guide to DSCR cash-out refinance requirements walks through what that looks like in more detail. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Where the General Rule Breaks — Named Edge Cases
Local bans and registration regimes override the income number entirely. A market data report showing strong projected revenue is irrelevant if the property can’t legally operate as a short-term rental. New York City is the clearest live example: the city’s Office of Special Enforcement confirms that Local Law 18 requires host registration and prohibits renting an entire apartment for fewer than 30 days unless the host resides there and limits guests to two at a time. A file built around STR income on a property caught by that kind of rule doesn’t get saved by a strong Rentalizer number — the underwriting gate is legal operation, checked separately from the revenue math. Short-term rental rules can vary meaningfully by city, county, HOA, and even individual property, so investors should confirm local rules before assuming projected income will be usable at all.
Thin-comp markets weaken the report itself. The Rentalizer methodology depends on finding enough comparable listings within its search radius. In markets with few active short-term rentals, the comp pool shrinks and the projection’s reliability drops with it. Independent reviews of these tools note that individual address-level projections can run 15% to 30% off in either direction — and tend to skew optimistic rather than conservative. A report pulled from a data-thin ZIP code carries a lot less weight in underwriting than the identical tool run in a dense, established vacation-rental corridor, even though the algorithm is the same in both cases.
Ineligible property types don’t get a workaround. Manufactured homes — single- or double-wide — along with log homes and barndominiums fall outside DSCR programs in Lendmire’s network entirely, regardless of what a market data report says about their earning potential. This isn’t a documentation problem the report can fix. It’s a property-eligibility line.
Sub-1.00 coverage isn’t automatically dead. If a discounted market-data projection lands the file below a 1.00 coverage ratio, that’s not necessarily the end of the deal — select lenders in the network still work with sub-1.00 coverage, generally with adjusted leverage and terms to compensate for the weaker ratio. Separately, no-ratio qualification is also available through select lenders, generally reserved for borrowers who already own a primary residence — it isn’t tied to a specific coverage number, and it’s not a fit for every borrower profile. Both paths exist, but they’re not standard-shelf products; they depend on the specific lender and the rest of the file.
From the file side, deals with heavy STR concentration tend to come in with two different income stories attached — a conservative long-term-rent number from the appraisal and a much stronger discounted STR projection or trailing payout history. The stronger files run both numbers rather than leaning on just one, because a lender reviewing the file will usually want to see that the deal holds up even under the more conservative comparison.
A Practical Way to Think About the Report
Run a scenario: an investor is buying a property listed near $410,000 in an established beach-town STR corridor with dense comparable-listing coverage. A published report comes back with a strong 12-month revenue forecast. The underwriter applies an occupancy floor and discounts the top-line revenue before counting it, then compares that adjusted monthly figure against the full housing obligation at a modeled 75% LTV. If the discounted number still clears comfortably above 1.00x coverage, the file has room. If it lands right at the edge, the borrower’s leverage, credit tier, and reserve position start doing more of the qualifying work than the market data report alone. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Now flip the location: the same purchase price, but in a market with a handful of active STR listings and no established comp density. The same tool, the same methodology — but a much wider margin of error on the output. That’s the scenario where a lender is more likely to lean on operating history (if any exists), request a more conservative comp set, or simply apply a heavier haircut before letting the number touch DSCR.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
Key Terms Defined
Market data report — a third-party projection of a short-term rental’s expected annual revenue and occupancy, typically built from comparable-listing analysis rather than actual booking history.
Rentalizer — AirDNA’s address-level revenue estimation tool, which selects comparable STR listings within a defined radius and weights their historical performance to produce a 12-month forecast.
Occupancy floor — a minimum booked-nights assumption a lender applies before counting projected STR revenue, meant to guard against overly optimistic modeling.
Revenue haircut — the percentage discount a lender applies to a raw market-data projection before using it in DSCR calculations, reflecting the gap between modeled and actual income.
Form 1007 / Form 1025 — the standard appraisal rent schedules for one-unit and two-to-four-unit investment properties, respectively, built for long-term monthly rent rather than nightly STR economics.
For the end-to-end picture of how these loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Does a market data report replace the appraisal on an STR purchase? No. The appraiser still completes a standard rent schedule (Form 1007 or 1025) based on long-term comparable rents, and the market data report is ordered separately to capture nightly-rate economics the appraisal form isn’t built to handle. Underwriters often look at both figures rather than relying on just one.
What if my target market doesn’t have enough STR comps for a reliable report? Expect more underwriting friction and likely a heavier discount applied to whatever projection the tool produces. Thin comp density widens the margin of error on address-level projections, and lenders know it — data-thin markets carry a documentation penalty compared to established, comp-dense vacation-rental corridors.
Can I use my existing Airbnb income instead of a market data report? Yes, if the property already has an operating history — trailing platform payout statements or property-management-system reports typically carry more weight than a forward-looking projection because they reflect actual transactions rather than a model. Lendmire’s comparison of twelve months of hosting history versus a market data report breaks down when each documentation path applies.
Does clearing a 1.00 DSCR on the projected STR income mean the deal is profitable? Not by itself. DSCR only compares rent (or projected STR revenue) against the property’s full monthly payment — it doesn’t account for cleaning fees, management costs, vacancy between bookings, utilities, or maintenance reserves, which all sit outside the ratio.
What happens if my STR isn’t legally permitted in its jurisdiction? The income number stops mattering. Lenders treat legal operating status as a separate underwriting gate from the revenue projection — if the property can’t legally run as a short-term rental where it’s located, a strong market data report won’t get the file approved. Confirming zoning, permits, and any HOA restrictions before writing an offer is now effectively part of the financing checklist, not an afterthought for after closing.
Is a bigger down payment enough to offset a weak market data report? No. More equity can improve the DSCR ratio and open leverage flexibility, but it doesn’t override a documentation gap, a credit floor, or an ineligible property type. Lendmire’s overview of DSCR loan down payment requirements covers how leverage and coverage interact across different program tiers.
If you’re buying or refinancing a short-term rental and want to see how a market data report or existing hosting history would actually pencil against a lender’s DSCR math, Lendmire can help compare loan options based on the property’s projected or actual income, credit profile, leverage, and overall investor goals.
Program availability, loan terms, and eligibility are subject to lender guidelines, credit approval, property review, and full underwriting. This article is educational and is not a loan offer or commitment to lend.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker, not a direct lender — it arranges DSCR financing through select lenders across a wholesale network spanning 40 markets, including Washington, D.C. Loan approval is never guaranteed, and nothing here is a commitment to lend. Every scenario described here is subject to lender approval and to the specific borrower, property, and program guidelines in place at the time of application. This article is general information, not financial, legal, or tax advice — investors should speak with a qualified professional about their specific situation. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae – Appraiser Update, June 2024
2. Class Valuation – Understanding the 1007 Appraisal and Short-Term Rentals
3. NYC Office of Special Enforcement – Short-Term Rental Enforcement
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
