The Quick Read: On a purchase with no booking history, a DSCR lender counts a supported projection, not your own estimate. That projection is usually a third-party revenue report or an appraiser’s short-term-rental analysis. The lender trims it, then divides what is left by the full payment of principal, interest, taxes, insurance, and association dues.
- There is no single counted-income number. The evidence route and the size of the trim decide the answer.
- Your own spreadsheet does not count. The number has to come from a source the lender accepts.
- Short-term-rental purchases typically reach up to 75% LTV, with a 1.00 coverage floor on purchases and on refinances.
- Clearing the ratio is a financing test. It is not a profit forecast.
DSCR stands for debt service coverage ratio. It measures whether a property’s income covers its monthly housing payment. A new Airbnb has no income yet, so the lender has to borrow evidence from somewhere else. This article walks through where that evidence comes from and how it is trimmed. It also covers where the process breaks and what to do before you write an offer.
Short-Term Rental Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 29, 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 29, 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.
Key Terms Defined
PITIA: the full monthly housing payment: principal, interest, taxes, insurance, and association dues.
Counted income: the monthly income a lender lets into the DSCR calculation after any trim.
Haircut: the percentage a lender cuts from gross projected revenue before running the ratio.
Projection report: an address-level revenue estimate from a data provider, built from comparable listings.
STR analysis: an appraiser’s written estimate of short-term-rental income, attached to the appraisal.
Seasoning (hosting history): the track record of actual bookings, which replaces projections once it exists.
Where Does the Number Come From?
A lender uses one of three evidence routes, and the program decides which are allowed. Across the wholesale network of DSCR lenders we place files with, the routes are the same. Some programs accept all three. Others accept only one.
| Route | Who produces it | Typical effect |
|---|---|---|
| Third-party projection | Data provider, ordered for the address | Highest figure, trimmed hard |
| Appraiser STR analysis | Appraiser, as an addendum | Middle figure, comp-based |
| Long-term market rent | Appraiser rent schedule | Lowest figure, no STR credit |
Route one is the projection report. AirDNA calculates revenue as nightly rates plus cleaning fees, minus discounts and platform service fees. Its Rentalizer tool then estimates annual revenue, average daily rate, and occupancy from comparable listings. That is gross revenue. It excludes cleaning, management, utilities, and repairs.
Route two is the appraiser’s analysis. HousingWire describes this as a labeled narrative addendum. It is built from short-term-rental comps, occupancy, seasonal pricing, and stated expense assumptions.
Route three is the long-term rent fallback. The appraiser reports what the home would rent for on a standard 12-month lease. For a single unit this is a Form 1007 rent schedule. For two to four units it is a Form 1025. This figure is often well below what a good Airbnb can earn.
Who orders the report matters. The lender or broker orders the projection or appraisal, and you pay for it. Your own pro forma can help you decide whether to buy, but it never enters the qualifying math.
How Does the Lender Get From a Projection to Counted Income?
The lender follows five steps. The projection is trimmed on the income side, then divided by an untouched payment.
1. Choose the income basis. The lender decides whether to use the projection, the STR analysis, or the long-term rent.
2. Take the gross revenue figure from that source.
3. Apply the haircut. The size varies by program and by lender.
4. Divide by the full PITIA. Nothing is trimmed on this side.
5. Compare the result with the program floor. Select short-term-rental programs in our network start at 1.00 on purchases and on refinances.
Here is a modeled example. These inputs are assumptions, not market data. Say the projection alone equals 1.60 times the full payment. The table shows what different haircuts do to that same house.
| Haircut on projection | Counted income vs. payment | Clears 1.00? |
|---|---|---|
| 10% | 1.44x | Yes |
| 20% | 1.28x | Yes |
| 25% | 1.20x | Yes |
| 30% | 1.12x | Yes |
| 40% | 0.96x | No |
The same property moves from comfortable to just short as the haircut grows. Programs with similar floors can still produce different answers. This is why we compare several lenders’ treatment before choosing where to place a file.
Compare that with the long-term rent route. Say the appraiser’s 12-month rent covers the payment about 1.05 times. That file would clear 1.00 barely, with little cushion. The projection route could show far stronger coverage. A property that looks short on long-term rent can still pass on a supported STR analysis.
What Does the Haircut Do and Not Do?
The haircut cuts income, not the payment. It also is not a line-by-line expense budget. Lenders use it as a blunt stand-in for vacancy, seasonality, and operating costs. Your actual cleaning, management, utilities, and repairs are not itemized in the DSCR math.
This creates a gap that new investors miss. A passing ratio does not mean the property makes money. DSCR compares counted income to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A file can clear 1.00 and still lose money in a slow quarter.
Seasonality works the same way. Annual revenue is converted to a monthly average. A beach house that earns most of its income in summer still shows the same monthly figure in January. The ratio ignores the cash-flow dip, so you need your own reserves to ride it out.
Why Can’t the Appraisal Form Prove Airbnb Income?
The standard rent form measures monthly leases, not nightly stays. This is why appraisers add a separate narrative when a lender wants short-term income. This section is agency contrast only. DSCR loans are not agency products, but DSCR appraisers borrow the form names.
Fannie Mae’s appraiser update says the 1007 calls for indicated monthly market rent built from monthly-leased comps. It says an appraiser must not multiply a nightly rate by 30. It also says the form cannot estimate the nightly fee for a short-term rental. So a nightly rate times 30 is not rent in the eyes of the form.
The practical lesson is simple. The appraisal’s rent schedule will not carry your Airbnb case. A separate STR analysis or a projection report has to do that job.
What Happens When the Sources Disagree?
Sources often disagree on a new listing. The program rules decide which one controls, not your preference. Here is how the common cases play out.
| Situation | What usually happens |
|---|---|
| Projection high, STR analysis lower | Many lenders use the lower figure |
| STR analysis passes, long-term rent fails | Works only if the program accepts STR income |
| Both STR figures fail, long-term rent passes | Falls back to long-term rent basis |
| All three fail | Needs less leverage or a different structure |
Those outcomes describe common patterns, not a rule. Some programs allow only one route. Others let the lender pick the more conservative figure when two conflict. That is why asking about the route before you order an appraisal saves money.
What Is the First-Months Reality?
A projection describes how established comps perform. A new listing has no reviews and no ranking, and it usually ramps up. An STR advisory, VaultSTR, reports in its own underwriting that first-year revenue lands at roughly 60% to 75% of the instant Rentalizer estimate. That is one operator’s experience, not a standard. Treat it as a caution.
Estimates can also miss in thin markets. A BNBCalc review says estimates in markets with few comps can be off by 15% to 30%, in either direction. Its advice is to treat a single estimate as a midpoint, not a promise.
Underwriting and reality can diverge here. The lender counts a trimmed projection, and your first months may run below it. Plan your cash cushion for the real ramp, not the counted number. Reserves vary by lender, leverage, loan size, and transaction type. Commonly they run around six months of PITIA, and the right figure for your file depends on those factors.
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.
Purchase vs. Refinance: When Does History Replace the Projection?
A purchase leans on projected evidence. A refinance leans on actual history. After a year or so of hosting, platform payout statements and bank deposits take over from the projection.
| Factor | Purchase | Refinance or cash-out |
|---|---|---|
| Income evidence | Projection or STR analysis | Booking history, payouts |
| Typical top LTV | Up to 75% | Up to 70% |
| Coverage floor | 1.00 | 1.00 |
| Minimum credit score | 640 | 640 |
Those are select-program ranges from our network, subject to lender guidelines. Refinance and cash-out leverage on short-term-rental collateral tops out at 70%, while standard long-term rentals can reach 75% on a cash-out. Programs also usually expect about 12 months of landlord or host experience from the borrower. That expectation is about you, separate from the property’s own booking history. How a lender counts that experience varies by program.
Many investors plan to refinance once the property has history. Cash-out refinances typically expect about six months of seasoning, and the stronger ratio from real bookings can improve terms. Lendmire’s complete DSCR loans guide covers the full refinance path.
What If the Ratio Comes Up Short?
A short ratio is a signal to adjust the file, not a dead end. Here are the options, in the order we usually test them.
- Lower the leverage. A larger down payment lowers the payment and lifts the ratio. It does not erase credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough coverage.
- Switch income routes. If one lender trims a projection hard, another program may accept the appraiser’s STR analysis.
- Use a different program. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. That is a separate path from the 1.00 programs, not a lower floor on the same one.
- Use a longer structure. Extended terms and interest-only periods are available through select lenders and can change the payment side.
- Renegotiate the price. A lower purchase price shrinks the payment against the same income.
One edge case matters. A property that cannot legally operate as a short-term rental may not count that income at all. 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. Some property types are also not offered in the network: manufactured homes, log homes, and barndominiums fall outside these programs.
What Should You Check Before Making an Offer?
Run this routine before you write an offer. It takes the guesswork out of the ratio.
1. Ask which evidence routes the program accepts for a new purchase.
2. Pull a projection report yourself for a rough read, then assume your counted income lands below it.
3. Run the deal on long-term rent too, as the fallback case.
4. Confirm the property can legally operate as a short-term rental.
5. Check that your credit, reserves, and hosting experience fit the program.
The appraisal usually settles the ratio, so you may not know the final number until it returns. That is one more reason to test conservatively first.
Frequently Asked Questions
Can a brand-new Airbnb with no history qualify for a DSCR loan?
Yes on a purchase, with the right program. The lender counts a projection report or an appraiser’s STR analysis in place of booking history. Qualification still runs on property-level rental income covering the payment, subject to lender guidelines. Credit, leverage, reserves, and property eligibility all still apply.
Will the lender use my own income estimate?
No. The number must come from a source the lender accepts, such as an appraiser or a third-party data report. Your estimate helps you decide whether to buy, but it does not enter the qualifying math.
Does the lender count the full AirDNA projection?
Typically not. Lenders trim gross projected revenue before running the ratio, and the size of the trim varies by program. That is why the same house can clear 1.00 at one lender and miss at another.
Does clearing 1.00 mean the Airbnb is profitable?
No. DSCR compares counted income to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation, so treat a passing ratio as a financing test.
What if the short-term numbers fail but long-term rent passes?
Some programs let the file fall back to the appraiser’s long-term rent. That removes the STR upside from the qualifying math but may still clear the floor. Ask before you order the appraisal whether the program allows it.
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 DSCR investor financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Call 828-256-2183 or request a quote.
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 Help: How AirDNA Calculates Revenue
2. HousingWire: Short-Term Rentals Are Breaking the Appraisal Playbook
3. Fannie Mae Appraiser Update
4. VaultSTR: Rentalizer Accuracy
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 Rent From Both Units of a Duplex · Can You Reapply for a DSCR Loan After a Rental Income Denial? · How a Portfolio DSCR Lender Sizes a Loan Without Tax Returns
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.