The Quick Read: A DSCR lender counts only a lender-set share of the gross revenue an AirDNA report projects, divides that discounted figure by twelve, and compares it with the full monthly payment of principal, interest, taxes, insurance, and any HOA dues, so the share counted changes from lender to lender and file to file. No public standard sets that share. Each program decides its own discount, and some programs do not accept a projection at all.
- The discount hits income only. The payment in the denominator is never reduced.
- Across our wholesale network, projections are one of several income evidence paths. Trailing booking history and the appraiser’s rent figure are the others.
- Coverage of 1.00 is where select programs start. Stronger ratios open better pricing and leverage.
- A projection that looks strong in your own model can still miss the coverage floor after the discount.
- Clearing the coverage test is not the same as positive cash flow.
What an AirDNA Projection Actually Is
An AirDNA projection is a revenue estimate built from nearby comparable rentals, not a forecast of what your specific property will earn. AirDNA’s Rentalizer projects annual revenue, average daily rate, and occupancy for an address. It weights how comparable short-term rentals within a 10-mile radius performed, adjusted for seasonality and demand.
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.
The revenue figure is gross host revenue. AirDNA’s homepage explains it as booked nights times average daily rate, plus cleaning fees, minus discounts and platform service fees. Cleaning fees count as revenue in that number. They are also a pass-through cost for the host, which is one reason lenders do not take the figure at face value.
Newer tools show more of the work. AirDNA’s Rentalizer Agent shows each comp’s own revenue and occupancy, and the comp set can be adjusted. That matters later, because the comp set is the part of the report you can actually check.
Key Terms Defined
DSCR (debt service coverage ratio): The property’s qualifying monthly income divided by its full monthly housing payment.
PITIA: Principal, interest, taxes, insurance, and any HOA dues. It is the payment side of the ratio.
Haircut (income factor): The percentage a lender removes from gross projected revenue before running the ratio. It stands in for vacancy, fees, and variability.
Counted income: The monthly income a lender actually uses after the haircut.
LTV (loan-to-value): The loan balance as a percentage of the property’s value.
Seasoning: The waiting period between buying a property and refinancing it.
Form 1007 and Form 1025: Appraisal forms. The 1007 is the single-family rent schedule, and the 1025 is the small residential income property report.
How a Lender Decides Which Income to Count
The lender picks one income evidence path per file, and the path depends on whether the property already has booking records. We see three paths across the network: trailing booking history, a third-party projection, and the appraiser’s long-term market rent. Programs differ on which of the three they accept.
| Situation | Evidence usually leaned on |
|---|---|
| Existing STR with booking records | Trailing history |
| Purchase with no property history | Projection, if the lender accepts one |
| Long-term rental converting to nightly | Projection or appraiser rent |
| Lender does not accept projections | Appraiser’s long-term rent |
| Projection and appraisal far apart | Lender discretion, often the lower figure |
Short-term programs in the network generally look for about 12 months of hosting history. A file without it leans on whichever alternate evidence the lender accepts. That is why the same property can be a clean fit for one lender and a stretch for another.
The appraiser’s rent is a long-term number. Don’t assume the 1007 will show nightly income. A lender that uses only appraiser rent will often understate a strong vacation rental. Our piece What Counts As Short Term Rental Income For A Lender? walks through each evidence type in more detail.
The Math, Step by Step
The math is five moves, and the haircut touches only the first half of the ratio.
1. Pull the projection. Take the gross annual revenue figure for the address.
2. Convert to monthly. Divide the annual figure by 12.
3. Apply the haircut. Multiply monthly revenue by the share the lender counts.
4. Divide by full PITIA. The payment is never discounted.
5. Compare to the floor. Check the result against the program’s coverage minimum.
Here is a modeled example. These are assumptions for illustration, not a Lendmire figure and not a market statistic. Say gross projected monthly revenue equals twice the monthly PITIA, so gross coverage is 2.00. A 20% haircut cuts counted income to 80%. Coverage drops to 1.60.
The payment did not move. Only the income did. That is the point most investors miss when they run their own model.
For short-term files, purchase programs in the network start at 1.00 coverage. Refinance programs start at 1.00 as well. Treat 1.00 as where select programs start, not as a universal standard. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted.
What Does the Share Counted Do to Your Ratio?
The share counted moves coverage in a straight line, which is why it matters more than the headline projection. Hold the property and payment fixed, assume gross coverage of 2.00, and vary the percentage a lender counts. This table is illustrative only.
| Share of projection counted | Resulting coverage |
|---|---|
| 100% | 2.00 |
| 90% | 1.80 |
| 80% | 1.60 |
| 70% | 1.40 |
| 60% | 1.20 |
| 50% | 1.00 |
Two lenders can quote the same property at different coverage numbers for exactly this reason. The projection is identical, and only the percentage differs.
You can also work backward. To clear a given floor, divide the floor by the share counted. At a 1.00 floor, a lender counting 80% needs a projection equal to 1.25 times the monthly payment. A lender counting 70% needs about 1.43 times. A lender counting 60% needs about 1.67 times. If you want a stronger ratio than the floor, multiply the floor first. A 1.25 target at 80% counted needs about 1.56 times the payment.
Use that back-solve before you write an offer. If the purchase price would push the payment past what the projection can support at the lender’s share, the price is the problem, not the lender.
Projection Route vs. History Route, Same Property
History can count for more than a projection even when its gross number is lower. Consider a modeled property where the AirDNA projection equals 1.60 times the monthly payment. Assume a lender counts 75% of a projection. Counted coverage is 1.20.
Now suppose the same property has a year of booking records showing gross revenue of 1.40 times the payment. Assume that lender counts 90% of documented history. Counted coverage is 1.26.
The history route wins here despite the lower gross figure. Real bookings carry less uncertainty than an estimate. Those percentages are assumptions for the example, because lenders set their own, and the ordering is not guaranteed.
On a cash-out refinance of an existing short-term rental, the owner already has booking records. History is the path that matters in that case. Across the network, cash-out on a short-term rental tops out at 70% LTV, while a standard long-term rental cash-out tops out at 75% LTV. Short-term purchase leverage reaches 75% LTV, and refinance runs around 70%. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
What the Projection Doesn’t See
The projection can only model what its comps show, so check what it left out. Four checks are worth running.
- Comp match. A review from BnBCalc says Rentalizer matches on distance rather than amenities, which can misfire on plain properties and high-end ones. Open the comp set and compare bedrooms, amenities, and property tier.
- Market depth. RentalRecon reports the tool is most reliable in large, data-rich markets and needs a custom comp set in small ones.
- Accuracy claims. AirDNA says it validates its estimates against connected listings with known revenue. A VaultSTR review reports that independent tests put property-level estimates 15% to 30% off actuals, usually on the optimistic side. That is a secondary claim and should be read as directional, not as a measured error rate.
- Operations. The report does not capture condition, management quality, or permit status.
AirDNA itself notes that lenders may use more conservative STR income estimates because of market volatility. That is the same logic behind the haircut.
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.
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
The general rule is that a lender counts a discounted share of the projection. Several situations bend it.
The lender does not accept projections at all. Some programs use only the appraiser’s long-term rent. A property priced on nightly income can look thin under that method. Ask which evidence a program accepts before you spend on an appraisal.
The projection sits far above the appraisal. The appraiser’s long-term rent is often much lower than short-term potential. When the two disagree sharply, the lender may use the lower figure or exercise discretion. Expect the more conservative number to drive the file.
The loan grows. Counted income stays fixed while the payment rises with the loan balance. More cash-out or a bigger purchase loan thins coverage. This caps the loan size, not just the approval.
The comps don’t fit the property. A plain cabin priced against luxury comps will produce a flattering number. Adjusting the comp set helps you see the truth before the lender does.
The coverage is low but not failing. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. It is a different path from the standard floor, not a lower floor on the same program.
What to Do If the Counted Income Falls Short
There are five levers, and they work in combination.
- Lower the loan amount. A smaller balance cuts the payment, so the same counted income covers it better.
- Bring more down payment. A larger down payment lowers the payment and can lift coverage. It never erases leverage caps, credit floors, reserve rules, or property eligibility. Manufactured homes, log homes, and barndominiums are not offered in the network.
- Switch the evidence route. Documented booking history may count for more than a projection.
- Wait for history. Twelve months of bookings can change the file.
- Change the lender. Programs in the network count different shares and accept different evidence. We see this comparison across lenders daily, and the spread is real.
Credit and reserves matter alongside coverage. Short-term programs typically expect a 640 or higher score. Reserves vary by lender, leverage, loan size, and transaction type, and are commonly around 6 months of PITIA, often stepping up to about 9 months on larger loans above $1,500,000. Strong files clear two tests at once: enough equity and enough rental coverage.
One caution on interpreting the result. DSCR compares rent to PITIA only. Clearing 1.00 is not positive cash flow, because repairs, vacancy, management, utilities, and capex sit outside the calculation. A file can qualify and still lose money.
Tax treatment varies; consult a qualified professional.
Your Decision Checklist
Before you rely on a projection, work through this list.
- Ask which income evidence the lender accepts, and whether a haircut applies.
- Get the share counted as a percentage, then run the back-solve.
- Open the comp set and adjust it for your property.
- Test the offer price against the counted income, not the headline projection.
- Run a version at a more conservative share to see how much cushion you have.
- Confirm that the coverage you need is still there at the loan size you want.
The complete DSCR loans guide covers the wider program structure if you want the full picture of leverage, credit, and reserves.
Frequently Asked Questions
Does every DSCR lender accept an AirDNA projection?
No. Only some programs accept a projection, and others rely on booking history or the appraiser’s long-term rent.
Is the discount applied to the payment too?
No. The haircut reduces income only. The payment in the denominator includes full principal, interest, taxes, insurance, and any HOA dues. That is why a discount on revenue can pull coverage below a floor even when the property looks strong.
Do I need booking history to qualify?
Short-term programs generally look for about 12 months of hosting history. If a property has none, the file leans on a projection or appraiser rent, depending on what the lender accepts. Qualification is subject to lender guidelines and property review.
Does a bigger down payment fix a thin projection?
It helps, but only partly. A larger down payment lowers the payment, which can lift coverage. It does not remove leverage caps, credit floors, reserve rules, or property eligibility. Purchases on short-term rentals reach 75% LTV on investment property, and the cap holds regardless of how much cash you bring. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Is a 1.00 ratio proof of positive cash flow?
No. The ratio compares counted rent to PITIA only. Repairs, vacancy, management, utilities, and capex are outside it, so a property can clear 1.00 and still run at a loss.
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. Lendmire is a broker that arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Every file is reviewed individually by the lender, and nothing here is a commitment to lend.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s traditional personal-income documentation, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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
5. RentalRecon Rentalizer guide
7. AirDNA: How to finance your vacation rental
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 Choose DSCR or Conventional for Your First Airbnb · How to Get a DSCR Projection Report for a Rural Cabin Rental · How to Stress-Test an Airbnb at Long-Term Rent Before Your DSCR Lender Does
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.