Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The Quick Read: For a resort or cabin short-term rental, 25% down is the structure most files should plan around, because short-term-rental purchase leverage in Lendmire’s wholesale network tops out at 75% loan-to-value (LTV), while 15% down is a higher-leverage structure that market surveys tie to unusually strong borrowers. DSCR, the debt service coverage ratio, compares a property’s rental income to its full monthly payment. Both down payments are judged on the same coverage test, and the difference is how much equity the lender sees and how much cushion the ratio gets.
- 25% down matches the top STR purchase tier (75% LTV), subject to lender guidelines.
- A 15% down STR purchase means 85% LTV, which sits above that tier and needs a specific program sheet to confirm.
- STR files typically expect a 640+ credit score, about 12 months of hosting history, and a 1.00 coverage floor on purchases.
- More down lowers the payment and can lift the ratio. It does not erase credit, reserve, or property-type rules.
- Clearing the coverage test is not the same as earning positive cash flow.
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.
Who Each Option Is Really For
Choose 25% down if you want the cleanest path on a cabin or resort unit. Rural cabins, condo-hotel units, and files with thin coverage tend to land there anyway. It costs more cash up front. In return you get a smaller loan, a better ratio, and the structure the network’s STR purchase tier is built around.
Choose 15% down only if you are a strong, well-documented borrower who has found a program that allows it for your property type. Market surveys report 15% down for well-qualified investors on some DSCR loans, with 25% or more common for STRs, per Mr. Rate’s DSCR down payment guide. In our network, STR purchase leverage tops out at 75% LTV. A 15% down file would need to sit outside that STR tier, so treat it as an exception to confirm, not a number to budget around. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Side-by-Side
The 15% column reflects published industry norms, not a fixed program. The 25% column reflects the network’s STR purchase parameters. Everything is subject to lender guidelines, credit approval, and property review.
| Factor | 15% Down (industry norms) | 25% Down (network STR purchase) |
|---|---|---|
| Leverage | About 85% LTV, exception tier | Up to 75% LTV, top STR tier |
| Review basis | Property income vs. full payment | Property income vs. full payment |
| Credit profile | Strongest borrowers, often 700+ | 640+ minimum on STR files |
| Documentation | Appraisal, rent evidence, assets | Appraisal, rent evidence, assets |
| Property types | Narrower, fewer rural or condotel | Cabins, resort homes, many condos |
| Entity vesting | LLC possible per program | LLC possible per program |
| Reserves | Often heavier at higher leverage | Vary by lender, loan size, leverage |
| Coverage cushion | Thinnest on volatile income | Smaller payment, better ratio |
The review basis is identical in both columns. A DSCR loan qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income is not the main test. The down payment changes how hard that test is to pass, not what the test is.
Key Terms Defined
PITIA is the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. The coverage ratio divides income by this number.
Non-warrantable condo is a condo project that fails standard agency project rules, often because of hotel-style features. Resort buildings with front desks or daily rental programs commonly fall here.
Rental pool is an arrangement where unit owners share rental revenue through a central operator. Whether joining is mandatory or optional can affect eligibility.
Form 1007 is the appraiser’s rent schedule for single-family investment properties. It estimates monthly market rent from comparable rentals.
How Income Gets Counted on a Cabin or Resort Unit
The ratio is only as good as the income number behind it. On a cabin or resort STR, that number takes more work than a lease.
Most DSCR files start with an appraisal that includes a rent schedule. The Fannie Mae Appraiser Update describes Form 1007 as documenting estimated monthly market rent on single-family investment properties, and it can also be used on condo investment properties. The Form 1007 itself is built to estimate market rent from comparable rentals. It was designed around leases, not nightly bookings.
So STR files usually add a second layer of evidence. That can be platform statements showing actual hosting history, or a third-party market projection. Many lenders then discount the gross figure before running coverage, since STR income swings with the season. Across the programs we place files with, history is treated as stronger evidence than a projection. A projection is a forecast, and underwriters tend to trim it harder.
That is why the network leans on about 12 months of hosting experience for STR purchases. It is also why a new buyer with no history often needs more equity or more coverage to get comfortable.
When 15% Down Is the Better Fit
Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Run the higher-leverage structure only when several things line up.
You need the cash elsewhere. A cabin or resort unit takes more than a down payment. Furnishing, permits, entity costs, and operating reserves all draw on the same pile. Keeping equity liquid can matter more than a smaller loan, especially if you are buying a second property.
Your file is strong across the board. Think 700+ credit, documented hosting history, and coverage well above 1.00 even after the lender discounts the income. A thin file at the highest leverage is where deals fall apart.
The property is plain-vanilla. A single-family cabin in an area with plenty of comparable STRs gives the appraiser and underwriter an easy read. Rural, remote, or hotel-style properties push the other way.
You have confirmed the program. This is the biggest catch. Before you plan around 85% LTV, a broker needs to check a specific program sheet for your property type. Without that confirmation, a 15% down plan can fall apart late in the process. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Also know the downside. The thinnest equity cushion sits under the most volatile income stream. If an off-season stretch runs soft or the appraisal comes in light, a high-leverage file has the least room to absorb it.
When 25% Down Is the Better Fit
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
This is the structure that fits most cabin and resort purchases, for four reasons.
It matches the top STR purchase tier. Up to 75% LTV on an STR purchase is where the network’s strongest STR files land. Planning to that number means your budget and the program agree. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
It helps the ratio. A larger down payment shrinks the loan, which shrinks the payment, which lifts coverage. On a resort unit with high HOA dues, that can be the difference between a file that clears 1.00 and one that does not. Taxes, insurance, and HOA dues do not shrink with your down payment, so the improvement is real but smaller than people expect.
It suits the property types that attract extra scrutiny. Rural cabins, condo-hotel units, and files with ratios near or below 1.00 are the ones lenders tend to hold to tighter leverage. If your property has one of those flags, 25% down is often the realistic starting point rather than a conservative choice.
It leaves room when the numbers move. A smaller loan gives the file more room if the appraisal lands light, the income projection gets trimmed, or an off-season dip shows up in the trailing history.
Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A Modeled Resort Condo, Both Ways
Take a resort condo unit with meaningful HOA dues. These are modeled assumptions, not market data, and no dollar amounts are used.
Say the structure at 85% LTV produces a coverage ratio around 0.95x after the lender discounts the STR income. The payment is a bit too big for the income. Now move to 75% LTV on the same unit. The loan shrinks, but the dues, taxes, and insurance stay put. Coverage might move to roughly 1.03x. That is a small improvement in absolute terms, yet it crosses the 1.00 line that many select programs use as a floor. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Here is why that matters in practice. Coverage below 1.00 is a separate path. Select lenders in the network offer it, with leverage and terms adjusted. 1.00 is where many select programs start, and sub-1.00 coverage is a different route with its own trade-offs. The higher down payment lets the file stay on the more standard route instead of the adjusted one.
Flip the scenario. Suppose a single-family cabin with no HOA clears 1.25x at either structure. Then the higher leverage costs you little on the ratio, and cash preservation becomes the main argument for it, if a program allows it.
Here is the stress test to run on either structure: cut the income estimate by what an off-season slump might take, then recheck coverage. If the file only works at the optimistic number, it is not a strong file at either down payment.
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.
Ratio Is Not Cash Flow
A DSCR compares rent to PITIA and nothing else. Repairs, vacancy, management fees, utilities, furnishing refreshes, and capital expenses all sit outside the calculation. A cabin can clear 1.00x on paper and still lose money in a slow quarter.
That is the real danger of chasing the lowest down payment. The ratio might pass while the operating budget is thin. Size your cash reserve for the property’s actual costs, not just the lender’s test.
Property Types That Shift the Answer
Resort condos and condotels. Hotel features make a project non-warrantable. A condo-financing explainer notes that front desks, daily rental programs, mandatory rental pools, and resort operations push a project out of agency financing. DSCR programs fill that gap, but the project’s rental-pool terms matter. Mandatory versus optional participation, and how revenue is split, can both affect eligibility. Expect these files to be reviewed more closely, and expect equity to matter.
Rural cabins. STR income on a remote property depends on having enough comparable STR activity for a credible estimate. Some lenders hold rural leverage tighter, so lean toward 25% down here. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Log homes and similar builds. Log homes, barndominiums, and manufactured homes (single- and double-wide) are not offered through the network’s DSCR programs. A cabin that is log-built is outside these programs no matter how much you put down.
Owner use. Modest, documented owner-use blocks can sit inside an STR file. Heavy personal use can push a property out of investor financing.
Refinance versus purchase. On a short-term-rental cash-out refinance, leverage runs up to 70% LTV. That is lower than purchase leverage, so a later cash-out will not return all of your equity.
Entity and guarantee. Many programs allow vesting in an LLC, subject to lender program eligibility. Lenders commonly still expect members to personally guarantee the loan. Closing in an LLC does not change the down payment math either way.
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.
Funding the Down Payment
Funds generally need to be seasoned or documented. Some investors fund a purchase using cash-out proceeds from another property, which can make a larger down payment less painful. On any cash-out, the other property’s leverage ceiling applies: up to 75% LTV on a standard rental and up to 70% LTV on an STR. For more on funding options, Lendmire’s article on DSCR loans with no down payment walks through what counts.
If you are weighing this against a business-owner purchase on conventional terms, Lendmire’s piece STR DSCR vs Conventional Loan for a Business Owner’s Resort covers that decision.
The Verdict
Plan for 25% down. It matches the network’s top STR purchase tier, gives your coverage ratio more room, and fits the property types that cabin and resort buyers usually hold. It also keeps your plan inside the leverage that most select programs can support.
Treat 15% down as a possibility to verify, not a default. It makes sense for a strong borrower with deep hosting history, a simple single-family cabin, and coverage that holds up under a trimmed income estimate. Even then, confirm the program sheet first.
The bigger decision is not the percentage. It is whether the file clears both tests: enough equity, and enough rental coverage after the income is discounted. A cabin or resort STR that passes both at 25% down is stronger than one that scrapes through at 15%.
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. For the fuller picture of how these loans work, see the complete DSCR loans guide.
Next Step
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. As a broker, it arranges these loans through select lenders in its wholesale network, across 41 markets including Washington, D.C. Any estimate from the site’s calculator is illustrative, and approval stays with the lender.
Frequently Asked Questions
Can I get a DSCR loan for a cabin with 15% down?
It is a long shot on an STR purchase. Market surveys report 15% down for well-qualified investors on some DSCR loans, but short-term-rental purchase leverage in the network tops out at 75% LTV. A 15% down cabin file needs a specific program sheet to confirm, and it works best for single-family properties with strong credit and hosting history.
Does more down payment guarantee a resort unit qualifies?
No. More equity lowers the payment and can lift coverage, but it does not remove credit floors, reserve rules, or property eligibility. A condotel with a mandatory rental pool, or a log-built cabin, can fall outside program rules at any down payment.
What coverage ratio do I need on an STR purchase?
1.00 is the floor for STR purchases on select programs, and stronger ratios open better terms. Separately, select lenders in the network offer coverage below 1.00, with leverage and terms adjusted. These are different paths, not one program with a moving floor.
Does the appraisal’s rent schedule capture my Airbnb income?
Not by itself. The rent schedule estimates market rent from comparable rentals and was built around leases. STR files usually add platform statements or a third-party projection, and lenders may discount that income before calculating coverage.
Do I need hosting history to buy a resort or cabin STR?
Expect about 12 months of hosting or landlord experience on STR purchases. A newer investor can sometimes offset that with more equity or stronger coverage, but it depends on the lender, property, and file.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
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References
1. Mr. Rate: DSCR Loan Down Payment Requirements
2. Fannie Mae Appraiser Update
3. Form 1007 (Single-Family Comparable Rent Schedule)
4. Condo financing: warrantable vs. non-warrantable explainer
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 Missouri · Can You Get a DSCR Loan on a Condo? · How to Qualify for a DSCR Loan in Massachusetts
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.