The Quick Read: Getting a DSCR loan on a vacant short-term rental starts with a purchase file where the lender counts projected income, because no guest has booked yet. Underwriting uses an appraiser’s STR analysis or a third-party market projection instead of booking history, and the property still has to cover its full monthly obligation on paper. Refinances work differently and usually lean on actual hosting history.
- Purchases can rest on projected STR income; refinances usually need hosting history, typically about 12 months.
- Short-term rental purchase leverage tops out at 75% LTV; refinance and cash-out run up to 70% LTV, subject to lender guidelines.
- Expect a 640+ credit score and a 1.00 coverage floor on both purchases and refinances.
- The projection gets discounted before the ratio is computed, so run a long-term-rent fallback number too.
- 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.
Why Does a Vacant STR Look Impossible to Finance?
A vacant STR has no lease and no bookings, so there is nothing to verify. That does not block a DSCR file. These loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, so the question becomes which income figure the lender will use.
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.
The ratio itself is simple. It is qualifying monthly income divided by PITIA (principal, interest, taxes, insurance, and association dues). At 1.00, income equals the full obligation. Stronger ratios open better pricing and leverage. The brokerage’s complete DSCR loans guide covers the basics. This article covers the vacant-STR wrinkle.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. No traditional personal-income documentation or W-2s drive the file. The property carries the test.
Key Terms Defined
DSCR: Qualifying rental income divided by the full monthly housing obligation on the property.
PITIA: Principal, interest, taxes, insurance, and association dues, the denominator in the ratio.
Form 1007: The appraiser’s single-family comparable rent schedule, which records estimated monthly market rent.
Form 1025: The small residential income property appraisal report, used for 2-4 unit properties.
Rentalizer-style projection: A third-party estimate of STR revenue built from nearby comparable listings.
Haircut: A discount a program applies to projected income before the ratio is computed.
What Income Paths Exist When There Are No Bookings?
Programs generally use one of three bases on a no-history purchase: an appraiser’s STR analysis, a third-party market-data projection, or the long-term market rent from the appraisal. Which one counts is a lender and program decision. Across the wholesale network, the accepted basis varies by lender, so the same property can produce different qualifying income depending on where the file lands.
| Income path | When it applies | Main risk |
|---|---|---|
| Appraiser STR analysis | Purchase, no history | Thin comp set |
| Third-party market projection | Purchase, no history | Projection runs high or low |
| Long-term market rent | Fallback or STR-blind programs | Understates STR cash flow |
| Trailing platform statements | Refinance of operating STR | Needs hosting history |
Fannie Mae’s appraiser update is useful as contrast only. It says Form 1007 was not designed for STRs and that an appraiser should not take nightly comps and multiply by 30. Agency material does not set DSCR rules. It explains why the standard rent form fits STRs poorly, which is why many files need a separate STR analysis.
Trade press makes the same point. HousingWire describes STR income as behaving like an operating business, driven by nightly pricing, seasonality, reviews, and management costs, not a lease.
Purchase vs. Refinance on a Vacant STR
A purchase can rest on a projection. A refinance usually cannot. Online advice looks contradictory because some pages describe one transaction and some the other.
| Factor | Purchase | Refinance / cash-out |
|---|---|---|
| Income evidence | Projection or appraiser analysis | Hosting history, about 12 months |
| Max LTV | Up to 75% | Up to 70% |
| Coverage floor | 1.00 | 1.00 |
| Credit | 640+ | 640+ |
Those are select-program ranges, subject to lender guidelines and the borrower’s file. A vacant STR you already own and want to refinance has no history to show, so that path generally waits until there is some. Lendmire’s piece Can You Cash-Out Refinance an STR With a DSCR Loan Before Year One? covers that side.
What “Ready” Means Before It Books
Underwriting cares about three stages, and they matter differently.
1. Unfurnished. The appraiser still values the real property. Furniture and business income are excluded from value, per McKissock’s appraiser education. A projection can still be pulled.
2. Furnished, not listed. Easier to support a projection, since the comp set can be matched to actual amenities.
3. Listed, no bookings. Some lenders want to see the listing live; others ignore it.
Ready also means legal. The STR must be permitted at that address, and the loan is business purpose. Operational items like cleaning crews and photos matter to the business, not usually to underwriting.
How Underwriting Actually Treats the Projection
Underwriting on the deal works through a fixed sequence.
1. Pick the income basis. The lender or program decides between appraiser analysis, market data, or long-term rent.
2. Order the appraisal. It sets value, which drives LTV. A vacant single-family typically gets an appraisal plus Form 1007; 2-4 units get Form 1025.
3. Pull the projection. AirDNA’s Rentalizer builds estimates from nearby comparable listings across Airbnb, Vrbo, and Booking.com. It projects over 12 months assuming the property is available all 365 days, and it scores comp strength as Low, Medium, or High.
4. Apply the haircut. Programs discount the projection or apply an expense factor. The size varies by program.
5. Compute the ratio. Qualifying income over PITIA. Taxes and insurance reduce it dollar for dollar.
6. Check credit, reserves, and entity documents. Reserves commonly run around 6 months of PITIA, though they vary by lender, leverage, and loan size. LLC-titled borrowers need entity documents, per lender program requirements.
Clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capex sit outside the calculation.
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.
A Worked Example With Ratios Only
Picture a furnished STR purchase at 75% LTV. The projection is strong, and the program discounts it before the ratio is computed. After the discount, coverage lands around 1.15x. That clears the 1.00 floor. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Now run the fallback. The same property on long-term market rent from the appraisal might land near 0.85x. That is below 1.00. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. It is a separate path from the standard 1.00 floor, not a loosened version of it.
The takeaway: run both numbers before you offer. If the property only works on the projection, the file depends on the lender accepting that projection and on the comp set holding up.
Can You Trust the Projection?
Treat it as an estimate, not a forecast. One STR advisory blog, VaultSTR, says independent tests put property-level projections 15-30% off actuals, usually high, and suggests underwriting year one at 60-75% of the projection. That is one view, not a lender program. A BiggerPockets thread shows the error can run the other way, with a projection that came in low against actuals.
Thin comps are the usual failure. A rural property, a unique build, or finishes and natural amenities the model cannot see will drag a comp set to Low strength. In that case, ask for a second source or an appraiser STR analysis.
What If the Numbers Come Up Short?
Work the decision in this order.
- Add equity. A larger down payment lowers the payment and can lift coverage. It never erases leverage caps, credit floors, or reserve rules.
- Shop programs. Some programs ignore STR income and use long-term rent. Others accept projections. The wholesale network sees both.
- Adjust structure. Interest-only periods and extended terms are available through select lenders. Lendmire’s piece How to Use Interest-Only on a Blanket STR Loan Before Reset covers that structure for larger STR holdings.
- Consider a sub-1.00 path. Available through select lenders, with leverage and terms adjusted.
- Wait for history. Twelve months of hosting records opens the actuals-based route.
A bank statement loan is a separate fallback. No-ratio qualification is available only through select lenders, generally for borrowers who already own a primary residence.
The Carry Period Nobody Models
The payment starts at closing. Bookings do not. Reserves are what bridge the gap while reviews build and the calendar fills. Budget the first months as a ramp, not as the projection’s average month, and expect seasonality to hit early. Reserve requirements vary by lender and loan size, and larger loans typically step up.
Questions to Ask Any Lender
- Do you underwrite projected STR income on a purchase with no history?
- Which sources count: appraiser analysis, market data, or both?
- What discount is applied before the ratio is computed?
- What happens if the comp set scores Low?
- Do you fall back to long-term rent, and at what leverage?
- Which property types are excluded? Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs.
Frequently Asked Questions
Can a DSCR loan close on an STR that has never had a booking?
Yes, on a purchase, when the program accepts a projection or appraiser STR analysis. Approval is subject to lender guidelines, credit review, and property review.
Does the appraiser decide whether STR income counts?
No. The lender decides. McKissock notes the appraiser reports the property’s value and market rent, while the lender makes the final call on income.
What if the lender uses long-term rent instead?
Coverage can drop materially, since long-term rent often understates an STR. That is why running both numbers matters. Another program in the network may accept the projection.
How much history does a refinance need?
About 12 months of hosting history is the usual expectation on STR refinances. A vacant STR you own typically waits for that record unless a purchase-style path applies.
Does a bigger down payment fix a weak ratio?
It helps coverage, but it does not override leverage caps, the 640 credit floor, reserve rules, or property eligibility. The strongest files clear both equity and coverage tests.
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. 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.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage focused on investor financing, arranging DSCR loans in 40 states plus Washington, D.C. — 41 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Appraiser Update
2. HousingWire: STRs and the appraisal playbook
3. McKissock Learning: Form 1007 and STR appraisals
5. VaultSTR: AirDNA Rentalizer accuracy
6. BiggerPockets: AirDNA accuracy discussion
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: Projected STR Income vs Rental History for a DSCR Loan Qualification · How to Qualify for a DSCR Loan in Florida · How to Qualify for a DSCR Loan in Virginia
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.