The Quick Read: Getting one means running the planned address, bedroom count, bathroom count, and guest capacity through a third-party short-term-rental revenue tool, most often AirDNA’s Rentalizer, then handing the result to your broker so a lender can turn it into qualifying income. A new build has no booking history, so the report relies entirely on nearby comparable listings. Whether it counts depends on the program.
- A projection report is an estimate built from comps, not a promise of revenue.
- Lenders usually discount the projected number before dividing it by the full monthly housing obligation.
- A DSCR loan is take-out financing for a finished home, not a construction loan.
- On short-term-rental files, purchase leverage tops out at 75% LTV and refinance or cash-out at 70%, subject to lender guidelines.
- Legal short-term-rental use has to be confirmed first, because it can override every other input.
Key Terms Defined
DSCR is the debt service coverage ratio: the property’s rent used for lender review divided by its monthly housing obligation.
PITIA is principal, interest, taxes, insurance, and association dues. It is the payment side of the ratio.
Projection report is a third-party estimate of a rental’s revenue, nightly rate, and occupancy, built from comparable listings.
Comp set is the group of nearby, similar listings the tool uses to estimate your property’s performance.
Form 1007 is the appraiser’s rent schedule. It estimates what a single-family home would rent for on a traditional lease.
Certificate of occupancy is the local sign-off that a new home is complete and fit to be lived in.
Short-Term Rental Calculator
Run the STR 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 nightly rate, occupancy, taxes, and insurance for a more accurate picture.
Short-term rental income is documented with a 12-month history or a market data report. Program parameters update from Lendmire’s centralized guideline source.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Nightly rate, occupancy, taxes, and insurance are editable estimates. 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 Does the Report Actually Model for a House That Doesn’t Exist Yet?
The report models a planned property as if it were already listed. You supply the address, bedrooms, bathrooms, and guest capacity. The tool finds similar active listings nearby and averages their results. It cannot see your build, only the neighborhood’s proven performance.
AirDNA’s Rentalizer documentation says the tool estimates revenue, average daily rate, and occupancy from similar nearby active listings. It searches within a 10-mile radius, picks comps by proximity and matching bedroom, bathroom, and guest configuration, then takes a weighted average of their performance.
That has a practical consequence. Every spec you enter changes the comps. Add a bedroom or a sleeping-capacity number the floor plan can’t legally support, and you pull in bigger, higher-earning listings. The number looks better. The lender’s review will not.
AirDNA also attaches a Comp Set Strength score of Low, Medium, or High to each projection, according to its calculator page. The score reflects how consistent revenue is across the comps. A thin or erratic comp set gets a weaker score, and that is the main weakness of a new-build report.
How Do You Get the Report? Step by Step
Start with the legal question, then run the tool, then reconcile the result with the appraisal. Here is the sequence that works on most files.
1. Confirm the home is eligible and short-term-rental legal. 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. New communities often carry builder or HOA rental restrictions. Check before you pay for anything.
2. Lock the planned specs. Use the floor plan as designed: real bedroom count, real bathrooms, honest guest capacity. Note amenities such as a hot tub or pool, but do not let them inflate the base case.
3. Run the projection. A free AirDNA account can run Rentalizer on any address, and paid plans add customization. Before paying for a report, ask your broker which vendor and format the target program accepts. Many programs specify or order the report themselves.
4. Read the Comp Set Strength score and the comps. Look at which listings the tool chose. If the whole block is new, comps may sit a few miles away in a different type of neighborhood.
5. Reconcile it with the appraisal. The appraiser still sets value and LTV. For a new build with few resales, value evidence leans on builder sales and competing new communities.
6. Package the file. Send your broker the report, the plans, the builder contract, and your insurance and HOA estimates.
Across the wholesale network, the pattern on new-build files is consistent. The projection rarely sinks the deal. Weak comps, an unconfirmed rental permission, or a missing completion document does. Files that arrive with all three settled move through lender review far more smoothly.
When in the Build Timeline Do You Order It?
Order a draft projection early to test the deal, and a final one near completion for the lender. A DSCR loan is take-out financing for a finished, rentable asset. It is not a construction loan, so the build is typically carried first by a builder or construction loan.
| Phase | What to do | What to watch |
|---|---|---|
| Pre-build | Run a draft projection | Does the number work at all? |
| Under construction | Confirm rental rules and HOA terms | Builder restrictions |
| At completion | Order the lender’s report and appraisal | Certificate of occupancy |
| At permanent financing | Submit the full package | Comps, haircut, leverage tier |
Permanent financing usually waits for the certificate of occupancy or equivalent completion proof. If completion slips, your construction financing needs room to absorb it. Lendmire’s piece New Build vs Existing Rental: DSCR for a Trust Buyer walks through the same gating issue from the entity side.
Which Income Figure Does the Underwriter Use?
It depends on the program. Across the network, short-term-rental qualifying income comes from one of three places: documented platform history, a third-party projection, or the appraiser’s long-term market rent as a fallback. Programs differ on which a no-history property may use, and some do not accept projections at all.
| Income source | Best for | How conservative |
|---|---|---|
| Documented host history | Existing STRs | Most grounded |
| Projection report | New builds, no history | Moderate, then discounted |
| Appraiser rent schedule | Fallback | Often understates STR income |
The fallback is the Form 1007 rent schedule, or its 2-4 unit counterpart, Form 1025. Fannie Mae’s appraiser update describes the 1007 as the way an appraiser documents estimated monthly market rent on a single-family investment property. DSCR loans are not agency products, but lenders borrow the form. It reflects a traditional lease, which is why it tends to come in below what a well-run Airbnb earns.
Two programs can look at the same projection and apply different discounts, so the same property produces two different coverage numbers. This is why a broker who sees many programs can matter more than the report itself.
How Does the Math Run?
The lender takes the projected gross, applies a discount, and divides the result by PITIA. The discount is program-specific, so it is best treated as a range you stress-test rather than a fixed figure.
Run the numbers on a modeled new build this way. Say the projection comes back strong, and a lender haircuts it so that qualifying income lands at a ratio of roughly 1.25x against the full monthly obligation. Now tighten the discount. The same property drops to around 1.05x. Tighten it again and it slips below 1.00x. Same house, same report, three outcomes. Those are modeled assumptions, not market data.
For short-term rentals, the floor is 1.00 on both purchases and refinances on the programs in the network, subject to lender guidelines. Stronger ratios open better pricing and leverage. Coverage below 1.00 is a separate path, available through select lenders in the network, with leverage and terms adjusted.
New construction adds a wrinkle on the payment side. Taxes may be assessed on land only at first, and HOA dues can be set by the builder. Use conservative estimates for both so the ratio doesn’t move after the file is submitted.
Where Does the Projection Break Down?
Projections break down in thin markets, on unusual amenities, and when optimism creeps in. Know the edge cases before you rely on the number.
Optimism. One independent analytics review, VaultSTR, reports that Rentalizer runs 15-30% off actual performance, usually high, and points to survivorship bias because failed listings drop out of the comp pool. That is one reviewer’s view, not a test result. It is still a reasonable argument for underwriting year one well below the projection.
Small markets. RentalRecon’s review says the tool works best in data-rich markets and that unusual amenities or small markets need a custom comp set, which is a paid-plan feature.
New-build comp scarcity. When a whole block is new, nearby comps are thin. Some files come back needing a lower leverage tier as a result.
Legality. A property without legal short-term use may not be able to count that income at all, whatever the discount.
Programs that skip projections. Some lenders do not accept projections for a property with no host history. Ask your broker before ordering anything.
Experience. Short-term-rental programs usually expect about 12 months of landlord or host experience, and a 640 minimum score is typical. A first-time host with a new build should raise that early.
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.
What If the Number Comes Up Short?
Adjust the deal, not the report. Inflating inputs to reach a ratio is the fastest way to lose credibility with a lender.
- Put more down. A larger down payment lowers the monthly obligation and can lift the ratio. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
- Lower the price or change the configuration. A different bedroom count can move you into a stronger comp set.
- Try a different structure. Interest-only periods and 40-year terms are available through select lenders in the network, and they can improve coverage.
- Look at the sub-1.00 path. It exists through select lenders, with leverage and terms adjusted.
- Switch markets. A data-rich market gives the tool better comps.
Remember what the ratio measures. DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow. Cleaning, management, utilities, repairs, vacancy, and capex all sit outside the calculation, so size those separately before you commit to a build.
For a broader look at how these loans fit together, see the complete DSCR loans guide.
Red Flags That Make a Projection Less Credible
- A Low Comp Set Strength score.
- Comps that are all larger than your planned home.
- Guest capacity above what the bedrooms realistically support.
- Occupancy far above what nearby listings show.
- No confirmation that short-term rental is allowed.
- A report that ignores seasonality.
Any one of these can push a lender toward a lower leverage tier or a bigger discount.
What to Hand Your Broker
A clean package shortens the back-and-forth. Bring the following:
- The projection report and comp list
- Floor plans and the builder contract
- Proof of the planned completion date
- HOA documents and any rental restrictions
- Insurance and tax estimates
- Your credit profile and host or landlord experience
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.
Frequently Asked Questions
Can I get a DSCR loan on an Airbnb that hasn’t been built or rented yet?
Often yes, but only after construction is complete. Permanent financing is take-out financing for a finished home. Some programs accept a projection report for a no-history property, while others fall back on appraiser market rent. Acceptance varies by program, so ask first.
Who orders the projection report, me or the lender?
It depends on the program. Many lenders order or specify the vendor themselves. Running your own free report is still useful for testing the deal, but confirm what the target program accepts before paying for anything.
Is the projection a guarantee of what I’ll earn?
No. It is a comp-based estimate, and the Comp Set Strength score exists to show how reliable it is. Independent reviewers report that it can skew high, so stress-test it.
Does a 1.00 coverage ratio mean the Airbnb is profitable?
No. The ratio compares rent to the full monthly housing obligation only. Operating costs and vacancy sit outside it.
Can I use a DSCR loan to fund the construction itself?
Generally no. The build is typically carried by a builder or construction loan, then refinanced or replaced by permanent financing once the certificate of occupancy is issued.
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. Lendmire is a broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 2026).
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References
1. AirDNA Help Center – Rentalizer Revenue Calculator
3. Fannie Mae – Appraiser Update June 2024
4. VaultSTR – Rentalizer accuracy
5. RentalRecon – Rentalizer review
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a DSCR Loan in Massachusetts · How to Qualify for a DSCR Loan in New Hampshire · Does a DSCR Loan Report to the Credit Bureaus Every Month?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.