The Quick Read: Re-running the number means swapping in the lower income figure, applying the lender’s income factor, and dividing by the same PITIA. Only the numerator moves. Then you test the new ratio against the program floor and the pricing tiers. A lower projection can change leverage, program choice, or whether the deal fits at all.
- Replace the income input only. Principal, interest, taxes, insurance, and HOA dues stay as quoted.
- The lender’s income factor is a program choice, not an AirDNA output.
- 1.00 is where select programs start. A separate select-lender path goes below 1.00, with leverage and terms adjusted.
- Clearing 1.00 is not the same as positive cash flow.
- Real operating history can replace a projection that dropped.
A projection that falls after you are under contract feels like a crisis. On the file, it is arithmetic. Here is the arithmetic, the levers, and the edge cases where the general rule breaks. For the full program picture, see the complete DSCR loans guide.
DSCR Calculator
Run the numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
What Actually Changes When the Projection Drops
The formula does not change. DSCR is income divided by PITIA: principal, interest, taxes, insurance, and any HOA dues.
| Input | Changes? | Why |
|---|---|---|
| Projected annual income | Yes | New report, new comps |
| Lender income factor | No | Set by the program |
| Taxes, insurance, HOA | No | Same file quotes |
| Loan amount | Only if you change it | Down payment is a lever |
| Program floor | No | Fixed by the program |
Most of the confusion comes from treating the AirDNA number as the qualifying income. It is an input. The lender decides how much of it counts.
What the AirDNA Number Represents
AirDNA’s help center says its revenue figures are nightly rates plus cleaning fees, minus host discounts and OTA service fees. Host fees and other additional fees are not in the data. Operating costs are not netted out either.
That matters in two ways. First, the figure is gross revenue, so it is not net income. Second, a DSCR ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation. Clearing 1.00 does not mean the property cash flows.
Projections also move because the comp set moves. AirDNA’s Rentalizer weights comparable listings, gives more weight to similar properties, and refreshes market data weekly. Pull the report on a different day with different comps and the number can come in lower.
Re-Run It in Five Steps
1. Record the new report. Note the date, the gross annual figure, ADR, occupancy, and the comps behind it. Programs that accept projections generally want a recent report.
2. Apply the lender’s income factor. Rent used for lender review equals the projection times the factor, divided by 12. Across a wholesale network, factors differ by program, which is why two lenders can show different coverage on the same property.
3. Rebuild PITIA with current file figures. Use the quoted loan amount, the tax and insurance quotes, and any HOA dues. Do not carry old quotes forward.
4. Divide. Rent used for lender review divided by PITIA gives the new ratio.
5. Compare to the floor and the pricing tiers. Short-term rental files on most programs we place expect 1.00 on purchases and refinances. Stronger ratios generally open better pricing and leverage.
Worked Example: Before and After
Run the numbers on a hypothetical short-term rental purchase. These ratios are modeled assumptions, not market data.
- Original run: after the lender’s income factor, coverage lands near 1.25x.
- Dropped run: the projection falls about 15%, so coverage lands near 1.06x.
- Partial drop: the projection falls about 8%, so coverage lands near 1.15x.
Same PITIA in every case. Income fell, the denominator did not.
The 1.06x file still clears a 1.00 floor, but it sits close to it. A small change in the insurance quote or the lender’s factor can push it under. Treat a thin cushion as a risk to size, not a pass.
Sensitivity: How Much Does Coverage Move?
Coverage moves in proportion to income. A 10% drop in qualifying income cuts the ratio by 10%. Start at 1.20x and a 10% drop gives 1.08x. A 20% drop gives 0.96x. Apply a lower income factor on top and the two cuts multiply.
| Projection change | Starting 1.30x | Starting 1.15x |
|---|---|---|
| Down 10% | 1.17x | 1.04x |
| Down 20% | 1.04x | 0.92x |
| Down 30% | 0.91x | 0.81x |
Multiplying is all it takes. Build the same table for your own file before you talk to anyone.
Back-Solve: What Gets You Back to the Floor
Work the formula in reverse. Required rent used for lender review equals the floor times PITIA.
Or flip it: the maximum PITIA at the new income equals rent used for eligibility review divided by the floor. The loan amount that produces that PITIA is your ceiling. Your lender can run that back-solve on the file; the calculator on this site gives an illustrative estimate only.
Levers That Restore Coverage
| Lever | Effect on the ratio | Trade-off |
|---|---|---|
| Larger down payment | Smaller loan, lower PITIA | More cash in the deal |
| Lower price | Same effect, plus lower taxes | Seller must agree |
| Interest-only period | Lowers the monthly obligation | Available through select lenders |
| Extended term (40-year) | Lowers the monthly obligation | Available through select lenders |
| Better insurance or tax quotes | Lowers PITIA | Limited room |
| Different income path | Changes the numerator | Needs history or a lease |
A bigger down payment can lift coverage, but it never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Purchase leverage on most files lands at 75%-80% LTV. Short-term rental purchases top out at 75% LTV. Cash-out on short-term rental collateral tops out at 70%, against 75% on standard rentals. Subject to lender guidelines, those caps hold even when the ratio improves.
Is the Lower Projection Legitimate?
Sometimes the drop is a correction. VaultSTR, an STR operator, says independent tests put Rentalizer estimates off from actual performance, usually on the high side, and recommends underwriting year one well below the projection. Treat the lower figure as the planning case, because the lender’s factor applies on top of it.
Check the report before you argue with it:
- Are the comps the right bedroom count, tier, and amenity level?
- Is the report date current?
- Does the comp set have enough listings behind it?
AirDNA’s Rentalizer shows a Comp Set Strength score, and custom comps similar to your property can raise it. Fixing a bad comp set is legitimate. Swapping comps until the number rises is not. Lenders can see the difference.
Switching Income Paths
A projection matters most when there is no operating history. Three paths exist:
- Trailing history. If the property already operates, about 12 months of hosting history on platform statements can replace the projection. Short-term rental programs generally expect about that much history.
- Projection report. Used when history does not exist.
- Long-term rent schedule. The appraiser’s 1007 (single unit) or 1025 (2-4 units) supplies market rent.
If the appraiser’s figure and the projection disagree, expect the lender to lean toward the lower one. On a dropped projection, the long-term schedule may beat a short-term figure that has been marked down twice. It may also come in lower. Run both before choosing.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Where the General Rule Breaks
Coverage under 1.00. 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Expect lower leverage and different pricing.
No-ratio files. These are available only through select lenders, generally for borrowers who already own a primary residence.
Other vendors. Rabbu’s guide notes that some lenders accept projections from other data tools. Whether a given program accepts a given vendor is program-specific.
Credit and reserves. Most programs want around a 660 score. Short-term rental files expect 640+. Reserves commonly run about 6 months of PITIA, and about 9 months on loans above $1,500,000. Conservative rate-term files at modest leverage can see reserves waived.
Ineligible property types. Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs, no matter what the projection says.
Decide: Proceed, Restructure, Renegotiate, or Walk
| Result of the re-run | Likely move |
|---|---|
| Ratio clears the floor with cushion | Proceed |
| Ratio clears, but only barely | Add equity or restructure |
| Ratio falls just short | Renegotiate price or add down payment |
| Ratio falls well short | Consider a sub-1.00 path, or walk |
A dropped projection can mean the property is a poor fit for this loan, not a poor investment. Separate those questions. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Talking to Your Broker
Bring the new report with its date and comp set, the old report, the current tax and insurance quotes, any operating statements, and your target price and down payment. If the file is a refinance, bring the lease or platform history.
Ask which income factor each candidate program applies. Ask whether it takes a projection report or wants history. If the number is falling, Lendmire’s piece What Happens If Your DSCR Drops After Closing? covers the post-closing side. For vacation-rental specifics, see how lenders run the coverage test on a vacation rental loan.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals.
Key Terms Defined
DSCR: Qualifying rental income divided by the monthly PITIA.
PITIA: Principal, interest, taxes, insurance, and association dues.
Income factor: The share of projected income a program counts toward qualification.
1007 / 1025: Appraisal forms for the rent schedule on one unit and on 2-4 units.
Frequently Asked Questions
Does a lower AirDNA projection change my PITIA?
No. PITIA depends on the loan amount, taxes, insurance, and HOA dues. Only the income side moves, unless you change the loan to restore coverage.
Can I still qualify below 1.00?
Possibly. Programs below 1.00 are available through select lenders in the network, with leverage and terms adjusted. Qualification is subject to lender guidelines, credit approval, and property review.
Should I pull a new report to get a higher number?
Only to correct a poor comp set. Rerunning until the figure rises is not a repair, and the lender will see the report date and comps.
Is the AirDNA number my qualifying income?
No. It is an input. The program applies its own income factor, and the same property can produce different ratios at different programs.
Does clearing 1.00 mean the rental cash flows?
No. DSCR compares income to PITIA only. Repairs, vacancy, management, utilities, and capex are outside the calculation.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. AirDNA Help Center: How does AirDNA calculate revenue?
2. VaultSTR: AirDNA Rentalizer accuracy
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a 40-Year DSCR Loan on a 2-4 Unit Property · How to Scale From 5 to 20 Rentals Using DSCR Loans · How to Calculate DSCR for a Rental Property in Five Minutes
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.