The Quick Read: Usually yes on a finished new build, and only through select programs: many DSCR lenders in the wholesale network will count an AirDNA-style projection as income evidence on a purchase with no booking history, but they discount it, they want the property complete with a certificate of occupancy, and some programs rely on the appraiser’s rent opinion instead. Not every program takes a projection at all. Others take it only as a second opinion next to the appraisal.
- Acceptance is a purchase-side story. On a refinance, programs generally want real platform history.
- The headline number is rarely the coverage figure. Expect a discount and an expense factor.
- A DSCR loan is take-out financing for a completed home. It does not fund construction.
- Local short-term rental permission can sink the file no matter how strong the projection looks.
What Counts as a “New Build” to a DSCR Lender?
A new build counts only once it is finished. The stage of the property decides what the lender can rely on and whether a projection is usable yet. Most programs we place files with treat a home still under construction as a job for the builder’s own financing, not a DSCR problem.
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.
| Stage | What the lender relies on | Projection usable? |
|---|---|---|
| Planned or permitted | Nothing yet | No |
| Under construction | Builder or construction loan | No |
| Complete, certificate of occupancy issued | Appraisal plus market data | Often, by program |
| Complete and furnished, no bookings | Appraisal plus market data | Often, by program |
| Operating with booking history | Actual platform income | Yes, and usually preferred |
Two financing events sit behind most new-build STR deals. A builder or construction lender comes first. The DSCR loan then takes out that financing after completion. Most programs in the network will underwrite a finished, empty new build using the appraiser’s market-rent estimate, so no lease is needed.
The home must also be a property type the programs accept. DSCR on manufactured homes, log homes, and barndominiums is not offered through the network, so a barndominium STR project needs a different plan.
For the full picture of how these loans work, see the complete DSCR loans guide.
How Does a Projection Become Qualifying Income?
A projection becomes qualifying income in four steps: the report estimates revenue, the lender discounts it, the lender subtracts an expense factor, and the result is divided by the full monthly obligation. The output is a coverage ratio, and that ratio decides eligibility under each program’s floor.
AirDNA’s Rentalizer Agent builds an address-level revenue estimate from comparable listings. It also adds reviews and a regulations check covering whether short-term rentals are allowed at the address. Among the non-QM lenders we work with, Rentalizer is the report we see most often.
Here is the sequence on a typical file:
1. The report produces a revenue estimate for the address.
2. The lender counts only part of that estimate, because projections run optimistic.
3. The lender applies an expense factor, since STRs cost more to run than long-term rentals.
4. The remaining income is divided by PITIA.
PITIA stands for principal, interest, taxes, insurance, and any HOA dues. It is the full monthly obligation on the loan.
Run the numbers on a modeled example. Assume the raw projection implies coverage of 1.40x. After the discount and expense factor, the qualifying figure lands near 1.05x. That still clears a 1.00 floor, but with little cushion.
Now assume the adjusted figure lands near 0.95x. On a purchase, 1.00 is where many select STR programs start. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. A lower number can also change the plan: more cash down, a smaller loan, or a different property.
The size of the discount varies by program. This is why the same address can clear one program and miss another.
What Makes a Report Acceptable for a New Build?
An acceptable report fits the property it describes. Programs look at whether the comparable listings resemble the subject home, whether the report is recent, and whether the data comes from a market with enough listings to support it. A weak comp set is the main reason a report gets discounted harder or rejected.
Here is a checklist that matches how files get reviewed:
- Comp fit. Bedroom count, property type, location, and amenities should line up with the subject home.
- Recency. A stale report invites a re-pull.
- Market depth. Enough active listings that the estimate rests on real data.
- Seasonality. A projection built for a peak season should not be read as a year-round figure.
- Unit count. Some programs want a separate report for each unit on a multi-unit property.
AirDNA also publishes a market score. According to AirDNA’s market analysis guide, market scores run from 40 to 100. Some programs set a minimum score, and the threshold is a program decision, not an AirDNA rule.
What If a New Neighborhood Has No Good Comps?
A new neighborhood often has few like-for-like listings, and the projection gets less reliable as comps thin out. Lenders know this, so thin-market files usually draw a harder discount or a push toward the appraiser’s analysis. Investors should plan for that before they price the deal.
The estimator matches comps by distance more than by amenities. The headline figure comes from the algorithm and not from the comps shown on the report. A hot-tub cabin and a plain inland cottage can land in the same comp pool and produce a number that fits neither.
Independent reviewers are blunt about the error. A VaultSTR review says address-level estimates can run 15% to 30% off. That range is a reviewer’s claim, not a lender standard. It still shows why a thin market deserves a larger cushion.
A brand-new listing adds another problem. It has no reviews and no booking record. It may not reach comp-level nightly rates right away, and the report does not model that ramp-up. Blocked calendars can also read as demand and push occupancy figures higher than reality.
Practical fixes, in rough order of strength:
- Narrow the comp set to listings that truly match the home.
- Add an appraiser’s STR income analysis alongside the report.
- Lower the loan amount so the adjusted ratio clears the floor with room to spare.
- Pick a different property in a deeper market.
Appraiser Rent Opinion vs. AirDNA: Which One Wins?
It depends on the program. Some programs use only the appraiser’s income analysis and ignore AirDNA. Others accept either one. A few accept both and let the lower supported figure govern. The strongest files give the lender a projection and an appraisal that tell the same story.
Every STR appraisal can deliver two opinions: market value and rental income. On a new build, appraisers often lean on the cost approach to value, because recent sales data is thin.
The rent form is where STR files get tricky. The standard appraisal rent schedules, Form 1007 for one unit and Form 1025 for two to four units, are built around long-term leases. Fannie Mae’s appraiser update says it is incorrect to multiply a nightly rate by 30 to get a monthly rent. That math ignores furnishing costs, services, vacancy, and business expenses.
DSCR is not an agency product, so those rules do not govern a DSCR file. They do explain why a 1007 figure often sits below a property’s real STR potential. A home that would clear 1.00 on Airbnb income can miss on paper. That gap is why programs turn to market data or an appraiser’s STR narrative.
Does Clearing 1.00 Mean the Deal Makes Money?
No. DSCR compares rent to PITIA and nothing else. Repairs, vacancy, management, utilities, supplies, and capital expenses sit outside the calculation, so a loan can qualify while the property barely breaks even. The lender’s coverage figure and your real cash flow are two different things.
STR costs make the gap wider. Cleaning, furnishing replacement, platform fees, and utilities run higher than on a long-term rental. Some operators underwrite year one at 60% to 75% of the Rentalizer number, as VaultSTR suggests. That is an opinion from a review site, not a standard. It is a sensible way to build your own cushion.
On the market backdrop, AirDNA’s market analysis guide shows U.S. short-term rentals posting a record revenue per available room of $181 in August 2025, up 3.4% year over year, with an average daily rate of $238, up 4.8%. National averages say little about one address, so treat them as context only.
A larger down payment lowers the payment and can lift coverage. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Where Do the Network’s STR Numbers Land?
Across the wholesale network, STR programs are tighter than standard rental programs. These are typical ranges, subject to lender guidelines, and every file is underwritten individually.
- Purchase leverage: up to 75% LTV on a short-term-rental purchase on the strongest files. LTV is the loan amount as a share of the property’s value.
- Refinance and cash-out: up to 70% LTV on short-term-rental collateral. Standard long-term rentals can reach higher cash-out leverage, but that figure does not apply to STRs.
- Credit: a 640 minimum score.
- Coverage floor: 1.00 on a purchase. On a refinance, the floor is set separately by program, and 1.00 is where select programs start there too.
- Experience: about 12 months of landlord or host experience is usually expected.
- Loan size: up to $3,000,000 on standard programs, with smaller balances routed through select lenders.
That experience expectation matters for first-time hosts. Whether a first-time host can use a projection on a new build depends on the program, so settle it before you apply. Lendmire’s piece How AirDNA Projections Perform in a New-Build STR Loan File goes deeper on that file shape.
Sequence: From Permit to Permanent Loan
The order of events matters more than most first-time builders expect. The loan cannot close until the home is complete, so each step needs to land in the right place.
1. Settle the construction financing. A builder or construction lender funds the build.
2. Confirm local rules early. 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.
3. Line up entity paperwork. If the property will sit in an LLC, that setup is subject to lender program eligibility. New-build files move smoothly when entity or trust documents are finished before the certificate of occupancy arrives.
4. Get the certificate of occupancy. The local building department issues it, not the lender. A temporary certificate can expire, and a lapsed one can stall the file.
5. Order the appraisal and the report. Order them once the home is complete, so the comps and the opinion reflect the finished product.
6. Arrange insurance. STR coverage has its own requirements, so line it up before the file goes in.
7. Submit the file. Lenders typically review the purchase contract, appraisal, insurance, bank statements for the down payment and reserves, and entity documents.
Reserves vary by lender, leverage, and loan size. About six months of PITIA is common, and larger loans can step up from there.
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.
Why Do Projections Get Cut, and What Can You Do?
Projections get cut for a handful of repeat reasons. The comp set is a poor match, the report is stale, the market is thin, or the lender discounts it harder than the investor expected. A cut projection does not end the deal, but it changes the math.
Common mistakes behind a lower number:
- Counting cleaning fees as income.
- Using comps with more bedrooms or better amenities than the subject home.
- Relying on a stale report.
- Treating peak-season revenue as an annual figure.
- Ignoring that the home has no reviews.
If the number comes back low, you have five levers. Pull a tighter comp set, add an appraiser’s STR analysis, increase the down payment, shrink the loan, or choose a program that treats market data differently. A broker who sees many lenders’ guidelines can route the file to a program that accepts market data. That is the main advantage of shopping across a network rather than asking one lender.
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.
Key Terms Defined
DSCR (debt service coverage ratio): Qualifying monthly income divided by the monthly debt payment. A ratio of 1.00 means income equals the payment.
PITIA: Principal, interest, taxes, insurance, and any HOA dues. It is the full monthly obligation used in the DSCR calculation.
AirDNA Rentalizer: A report that estimates revenue for an address from comparable short-term listings.
Certificate of occupancy: The local building department’s sign-off that a home is complete and safe to occupy. DSCR take-out financing needs it.
Appraiser’s rent schedule: The rent opinion an appraiser delivers, using Form 1007 for one unit or Form 1025 for two to four units.
Expense factor: A reduction a lender applies to STR gross income to reflect higher operating costs.
Take-out financing: A permanent loan that replaces short-term or construction financing once a property is complete.
Frequently Asked Questions
Can I qualify with no rental history on a brand-new STR?
Often, on a purchase, if the program accepts market data and the home is complete. Programs usually expect about 12 months of landlord or host experience from the borrower, and the minimum score for STR files is 640. Whether a first-time host can use a projection depends on the program, so ask before you apply.
Will a lender use the AirDNA number or the appraiser’s number?
It depends on the program. Some use only the appraiser’s income analysis, some accept AirDNA, and some accept either or both. When both exist and disagree, the lower supported figure often governs. Plan your coverage around the lower of the two.
Does this work on a refinance?
Not usually on projections alone. A refinance generally wants actual platform history, and short-term-rental refinance and cash-out leverage tops out at 70% LTV. The projection route is mainly a purchase-side tool.
Can a DSCR loan pay for the construction itself?
No. A DSCR loan is take-out financing for a completed home. A builder or construction lender funds the build, and the DSCR loan replaces that financing once the certificate of occupancy exists.
What if the adjusted coverage lands below 1.00?
Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Other options are a larger down payment, a smaller loan, or a better comp set. Qualification is subject to lender guidelines, credit approval, and property review.
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 mortgage broker arranging DSCR investor loans through select lenders across 41 markets, including Washington, D.C., Lendmire can be reached at 828-256-2183. This is not a commitment to lend, and every file is reviewed individually.
A projection is only as good as the comps behind it, and a brand-new listing has none of its own, so the investors who do best on new builds are the ones who price in the ramp-up before the lender does.
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
2. AirDNA short-term rental market analysis guide
3. VaultSTR: Rentalizer accuracy
4. Fannie Mae Appraiser Update
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: Does a DSCR Lender Require an STR Permit Before Closing on a Cabin? · How to Qualify for a Short-Term Rental DSCR Loan for a New-Build With No History · How a Luxury STR Operator Chooses a Portfolio or DSCR Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.