The Quick Read: It depends on the program and on the property’s rental history. Long-term rent is the default basis, and short-term rental income counts only under a program built for it, with either a hosting history or a third-party market report behind it. Most files are decided by which income basis the lender will accept, and the borrower often has a say.
- Long-term rent comes from a signed lease or the appraiser’s market-rent estimate.
- Airbnb income needs an STR-capable program and documented history or a market projection.
- Short-term rental purchases typically reach up to 75% LTV; refinances and cash-outs on STR collateral typically reach up to 70%.
- Coverage on STR files starts at 1.00 on purchases and refinances, subject to lender guidelines.
- Run the deal on both bases before making an offer.
Here is how the two bases work inside a file, where they split, and how to pick the right one.
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 a DSCR Lender Actually Divide?
A DSCR lender divides qualifying monthly rental income by the monthly PITIA: principal, interest, taxes, insurance, and any HOA dues. The only open question is which rental income number goes on top. Everything else in the ratio stays the same.
Across a wholesale network of DSCR lenders, the numerator comes from one of three places:
1. A lease or the appraiser’s rent schedule. This is the long-term basis.
2. Trailing platform history. Twelve months of actual Airbnb or VRBO statements.
3. A market projection. A third-party report that estimates what comparable short-term rentals earn.
Each program picks one or two of these. A lender that only writes long-term rent files will not look at your booking calendar, however strong it is. A lender with an STR program will.
For the full mechanics of the ratio, see Lendmire’s complete DSCR loans guide.
How Does the Long-Term Rent Basis Work?
Long-term rent is the default. If a tenant is in place, the lender reads the lease. If the property is vacant or being purchased, the appraiser estimates market rent. On a single-family home that estimate comes from Form 1007, the comparable rent schedule. On a small multifamily property, the appraisal uses Form 1025, which covers small residential income properties.
Both are appraisal forms. DSCR loans borrow them as tools. They are not agency products, and agency selling rules do not govern the loan.
The catch is what the form measures. The 1007 estimates what the property would rent for on a standard lease. It does not capture nightly pricing, weekend premiums, or event demand. A busy lakeside cabin or a downtown condo near a stadium can look ordinary on that form. That is why the long-term basis often understates a true short-term rental.
When Does a Lender Use Airbnb Income Instead?
Short-term rental income counts only under an STR-capable program. Most programs we place files with do not underwrite it at all, so the first screen is whether the program accepts STR income, before any math is run.
On the programs that do, the typical STR guidelines in the wholesale network look like this, subject to lender guidelines and not a commitment to lend:
- Purchase leverage up to 75% LTV on the strongest files.
- Refinance and cash-out leverage on STR collateral up to 70% LTV.
- A credit score of 640 or higher.
- Coverage of 1.00 on purchases and refinances.
- About 12 months of landlord or host experience. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Those are tighter than standard long-term rental tiers, and that is the cost of using the higher income number. The lender is taking on more income variability, so leverage steps down.
Lendmire’s piece STR income vs long-term rent fallback for a first-time Airbnb DSCR buyer walks through that choice for new hosts.
How Is Short-Term Income Documented?
There are two routes, and which one applies depends on whether the property has history.
Trailing 12-month history. The lender takes platform statements showing actual booked revenue. This is the cleanest evidence. It is also only available if the current owner has operated the property as an STR, and the statements must belong to the property being financed.
A market projection. On a purchase with no history, the lender may accept a third-party report. AirDNA’s Rentalizer is the common example. AirDNA’s help center explains that Rentalizer searches for comparable properties within a 10-mile radius, matches them on bedroom, bathroom, and guest counts, and takes a weighted average of their historical performance.
Two points from that description matter to a file. First, the output is only as good as the comp set. Second, it describes what similar properties earned, not what yours will earn.
Independent commentary from RentalRecon calls Rentalizer a directional estimate that works best in large, data-rich markets and needs a refined comp set in smaller ones. That is one reason lenders do not take the projection at face value.
What Is the Haircut on Short-Term Income?
Lenders trim gross STR revenue before they run the ratio. The trim covers the higher operating costs of nightly rentals: cleaning, turnover, platform fees, and vacancy swings. The size of the haircut varies by program, and some programs apply none.
Two mechanics are worth knowing:
- The haircut reduces only the numerator. The full PITIA stays in the denominator.
- A property can show a strong gross figure and still land near 1.00 after the trim.
Picture a property whose gross STR revenue implies about 2.0x coverage. After a 20% trim, coverage falls to roughly 1.6x. It still clears. Now picture one whose gross figure implies only 1.2x. The same trim brings it under 1.00x, where it needs a different path.
On a sub-1.00 result, coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Expect less leverage, not the same terms at a lower ratio.
Purchase, Refinance, or Cash-Out: Which Basis Applies?
The transaction type changes which evidence is realistic. This table shows the usual pattern.
| Transaction | Likely income basis | Why |
|---|---|---|
| Purchase, no STR history | Market projection or long-term rent | No platform statements exist yet |
| Purchase, proven STR | Trailing history, sometimes plus projection | Statements show real income |
| Refinance | Trailing history | Lenders want operating results |
| Cash-out on STR | Trailing history | Same, at lower leverage |
| Converting a long-term rental | Long-term rent until history builds | No STR record yet |
A common sequence is to buy and rent long-term, run it as an STR for 12 months, then refinance to capture the STR income. The refinance is where the history pays off.
One sizing point on cash-outs: the loan is limited by the smaller of two tests. Leverage caps the amount against value, and coverage caps it against income. A property can have plenty of equity and still fall short on coverage, or the reverse. The strongest files clear both.
What Disqualifies the Airbnb Basis Entirely?
Legal eligibility comes first. If the property cannot legally operate as a short-term rental, the income cannot count. 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.
When STR use is restricted, the file falls back to long-term rent. That is the reason to run both numbers before you offer.
Seasonality is the second issue. Lenders look at annualized income, not the peak months. A beach property can earn far more in summer than in winter, and the underwriter averages the year. A strong July does not carry the file.
Property type also matters. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs, so no income basis rescues them.
Which Basis Will Your Lender Use?
This table maps common situations to the likely basis. It is a working model, not an official standard, and each lender decides on its own guidelines.
| Situation | Likely basis | What to expect |
|---|---|---|
| Standard long-term rental | Lease or Form 1007 | No STR documents needed |
| New purchase, STR intent | Projection or 1007 | Lower leverage on STR tiers |
| Proven STR, 12+ months | Trailing statements | Strongest evidence |
| Seasonal or resort market | Annualized average | Peak months do not count |
| STR restricted by rules | Long-term rent | STR income ignored |
| Thin comp market | Often 1007 | Projection may be discounted |
Run Both Numbers Before You Offer
The practical habit is two-way underwriting. Calculate coverage on STR income after the haircut. Then calculate it on supported long-term rent. The gap between them is your margin of safety.
- If both clear 1.00, the file has room. The lender’s choice of basis matters less.
- If only the STR number clears, the deal depends on the lender accepting STR income, and a lender that falls back to long-term rent could decline it.
- If neither clears, the deal needs a different structure: more equity, a different property, or a select-lender path with adjusted leverage and terms.
Expect the long-term number to be the lower one on any property that earns well as an STR. Ask the lender upfront which basis it will use. Do that before you spend on an appraisal.
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 Documents Does Each Basis Need?
Gather these by basis so the file does not stall:
- Long-term basis: the signed lease, the rent roll if there are several units, and the appraisal rent schedule.
- Trailing history: twelve months of platform statements tied to the property, plus proof of the entity or owner of record.
- Projection basis: a third-party market report pulled early, with the comp set visible.
- All bases: insurance quote covering the rental use, HOA information if applicable, and entity documents if the loan will be held in an LLC, subject to program terms.
Pull the market report early. A comp set that looks thin is easier to fix before the lender sees it.
Why Is My Qualifying Income Lower Than Expected?
When the number comes back low, the cause is usually one of these:
1. The lender used the appraiser’s rent, not your booking income. The program may not accept STR income at all.
2. A haircut was applied. Gross revenue is not qualifying income.
3. The history is partial. Fewer than 12 months of statements may not satisfy an STR program.
4. The projection was discounted. A thin or mismatched comp set weakens it.
5. Seasonality was averaged. Peak months were smoothed across the year.
Ask the lender which of these applied. The answer tells you whether to change the property, the program, or the paperwork.
Clearing the Ratio Is Not the Same as Cash Flow
DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property produces positive cash flow. Repairs, vacancy, management, utilities, supplies, and capital expenses all sit outside the calculation. Short-term rentals usually carry heavier operating costs than long-term rentals, so the gap between coverage and actual profit tends to be wider.
Treat the ratio as an eligibility test and build a separate operating budget for the property.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
DSCR: The debt service coverage ratio, which divides qualifying monthly rental income by the monthly PITIA.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly obligation on the property.
Form 1007: The appraiser’s comparable rent schedule for single-family properties, used to estimate long-term market rent.
Form 1025: The appraisal form for small residential income properties, such as 2-4 units.
Trailing 12-month income: Actual platform revenue for the most recent twelve months.
Haircut: The percentage trimmed from gross STR revenue before the ratio is run.
Frequently Asked Questions
Can I use Airbnb income to qualify for a DSCR loan?
Only under a program that accepts short-term rental income. Many programs do not. Where it is accepted, income is documented with platform history or a market projection, usually with a haircut, and leverage is typically lower than on a standard long-term rental.
What if the property has no Airbnb history?
A purchase with no history may rely on a market projection, or fall back to long-term rent from the appraiser’s schedule. A refinance usually needs real operating history, which is why many investors run the property as an STR for about 12 months first.
Does the appraiser’s rent replace the AirDNA report?
No. The two do different jobs. The appraisal values the collateral and estimates long-term rent. A projection supports an STR income figure. A file may need both, and the lender decides which one sets the ratio.
What happens if short-term rentals are restricted where the property sits?
The STR income cannot count, and the deal works to long-term rent.
Can a DSCR below 1.00 still work?
On the STR programs described here, 1.00 is the coverage floor on purchases and refinances. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Qualification stays subject to lender guidelines, credit review, and property review.
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. Request a quote through Lendmire’s quote page or call 828-256-2183. Lendmire is a mortgage broker arranging DSCR investor financing through select lenders in its wholesale network across 41 markets, including Washington, D.C.
The cleanest files in this niche are the ones where the investor already knows the long-term number and treats the Airbnb upside as a bonus rather than the qualifying income.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. Recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. AirDNA Rentalizer help article
2. 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 a DSCR Lender Counts ADU Income for a First-Time Airbnb Host · How to Document Airbnb Income From a Detached Casita on a DSCR Loan · How to Document ADU Airbnb Income on a DSCR Loan as a Part-Year Owner
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.