The Quick Read: You get the loan by showing a lender that the rent it accepts for the property covers the full monthly payment, then clearing the credit, leverage, reserve, and property-eligibility checks that apply to that specific house, condo, or condotel and its intended rental use. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Three things decide the file: the income method, the property type, and the carrying costs.
- Coverage: 1.00 is where many select programs start. Stronger ratios open better pricing and leverage.
- Leverage: Purchases typically land at 75%-80% LTV on an investment property. Short-term rental purchases top out at 75%.
- Credit: A 620 floor exists in parts of the network. Most programs want around 660, and 700+ unlocks the strongest tiers.
- Income method: On a vacation rental, the lender-accepted figure usually comes in below gross bookings.
- Carrying costs: HOA dues, wind, and flood coverage can move your ratio more than most investors expect.
Key Terms Defined
Seven terms carry this whole article. Learn them once and the rest reads easily.
- DSCR (debt service coverage ratio): The property’s qualifying monthly rent divided by its monthly payment. At 1.00, rent equals the payment.
- PITIA: Principal, interest, taxes, insurance, and association dues. It is the full monthly obligation on the property.
- LTV (loan-to-value): The loan amount as a percentage of the property’s value. Lower LTV means more of your own money in the deal.
- Reserves: Liquid cash you hold after closing, usually counted in months of PITIA.
- Seasoning: The waiting period between owning a property and refinancing it with cash out.
- Recourse: The lender’s right to pursue the borrower or guarantor personally if the loan goes bad.
- Condotel: A condo building run like a hotel, often with a rental pool and an operator who shares in the income.
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 29, 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 29, 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.
How Does a Lender Actually Underwrite a Myrtle Beach Rental?
Underwriting follows eight steps, and the order matters. Income and eligibility come first, and credit and reserves come after. Skip ahead and you can fall in love with a property the program will not touch.
1. Confirm the property can legally be used the way you plan. For a vacation rental, that means checking the rules before you go under contract. 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. If the use is not allowed, there is no short-term income to underwrite.
2. Pick the income method. A long-term rental uses a signed lease or the appraiser’s market rent. A short-term rental uses operating history, a third-party projection, or an appraisal-based figure, depending on the program.
3. Order the appraisal and rent schedule. The appraiser estimates what the property should rent for and values it. That rent figure often becomes the coverage figure on long-term files.
4. Calculate the coverage. Divide qualifying monthly rent by PITIA. Include HOA dues and the real insurance quote.
5. Check credit and leverage. Your score and LTV set the pricing tier and the maximum loan.
6. Count reserves. Reserves commonly run around 6 months of PITIA, with larger loans stepping up.
7. Review title, insurance, and entity. The lender wants clean title, a bound insurance quote, and properly set-up vesting if you buy in an LLC, subject to program terms.
8. Sign and close. Paperwork follows the lender’s conditions list.
For the general mechanics behind these steps, see Lendmire’s complete DSCR loans guide.
One point trips people up. DSCR compares rent to PITIA and nothing else. Clearing 1.00 does not mean the property produces positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Clearing 1.00 says the rent covers the payment. It does not say you profit.
How Are Short-Term Rental Dollars Counted?
The lender counts the income its program accepts, not the income your pro forma promises. That gap decides many Myrtle Beach files. Gross booking revenue is not automatically the coverage figure.
| Income source | What it needs | When it fits |
|---|---|---|
| Operating history | About 12 months of hosting records | Existing rentals with a track record |
| Third-party projection | Market-data report on comparable listings | Properties with little or no history |
| Appraisal-based rent | Appraiser’s market rent estimate | Long-term rental underwriting |
Across the network, short-term rental files typically want a 640+ score and about 12 months of hosting history. They often apply a reduction to gross bookings before the coverage test. Purchase coverage starts at 1.00, and refinance coverage also starts at 1.00. The two are separate parameters, not a blended number.
Here is the market backdrop. AirDNA tracks 20,613 active listings in Myrtle Beach at 54% occupancy. That means you compete with a deep inventory, and averages blend every property type together.
So treat averages as context. They are not a proxy for one condo’s income. A lender will not underwrite your building off a citywide number.
What Does Leverage Look Like for Different Deals?
Your loan type sets the ceiling. Most programs in our wholesale network sort files like this:
| Deal type | Typical leverage ceiling | Notes |
|---|---|---|
| Standard long-term rental purchase | 75%-80% LTV | 85% at select high-leverage programs, with roughly a 700+ score |
| Standard rental cash-out refinance | About 75% LTV | About 6 months of seasoning is common |
| Short-term rental purchase | Up to 75% LTV | 640+ score, about 12 months hosting history |
| Short-term rental refinance or cash-out | About 70% LTV | Leverage tightens for vacation collateral |
Loan sizes run up to $3,000,000 on standard programs. Above $2,500,000, the network generally holds to 30-year fixed structures. The 30-year fixed is the spine, but extended terms, including 40-year, and interest-only periods exist through select lenders. ARM structures exist for investors who want them.
Credit works the same way. A 620 floor exists in parts of the network. Most programs want around 660. At 700+, you reach the strongest leverage tiers. Everything here is a typical range, and every file is underwritten individually.
What Does a Worked Example Look Like?
Run the numbers this way. These are modeled ratios, not market data.
Say a beachside condo’s lender-accepted rent covers its full monthly obligation at about 1.25x. That clears the 1.00 starting point with room to spare. Now the HOA assesses a special increase and the insurance renewal arrives higher. Total carrying costs rise 10%. Divide 1.25 by 1.10 and the ratio drops to about 1.14x. Still passing, but the cushion shrank.
Now picture a second condo. Its accepted rent covers only about 0.95x. On a straight 1.00 test, it fails. Three paths open:
- Put more money down. A larger down payment lowers the payment and can lift the ratio toward 1.00.
- Ask about a select-lender path below 1.00. Those exist in the network, with leverage and terms adjusted.
- Use a different income basis. If the long-term rent estimate beats the short-term haircut figure, the lender may accept it.
A larger down payment never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Which Property Types Work?
Single-family homes and small 2-4 unit buildings are the cleanest. Condos work too, with building-level diligence. Condotels are the hard case.
| Property | General fit | What to check |
|---|---|---|
| Single-family beach house | Strong | Insurance and flood quote |
| 2-4 unit property | Strong | Rent schedule for each unit |
| Condo | Good | HOA dues, rental restrictions, minimum stay |
| Condotel | Program-specific | Rental pool and operator split |
| Manufactured, log, barndominium | Not offered | Not offered through these programs |
On condos, read the HOA documents before you read the listing. Some buildings limit rentals or set minimum stays. Those rules affect both your income plan and the lender’s view of the building.
Where the Normal Rules Break
Three edge cases separate Myrtle Beach files from ordinary ones.
Condotels. Eligibility is not automatic. Some programs place condotels in a more restricted tier, and each program decides for itself whether to accept a mandatory rental pool. The pool can also lower coverage because the operator keeps part of the gross income. If you want a condotel, ask the lender about it before you write the offer.
A failed short-term plan. Ask what happens if the vacation plan underperforms. Can the property still cover its payment on long-term rent? A property that works only as a short-term rental has less room for error. Some buildings and some local zones do not let you switch uses easily.
Entity and recourse. 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. The business-purpose exemption in Regulation Z is why. That distinction does not shield you personally. Most DSCR loans are full recourse to the guarantor, even when title sits in an LLC. Prepayment penalties are also common. Their length and size come from the program and the note, and some states restrict them. Match the structure to your hold period before you sign.
For a high-value coastal property, Lendmire’s piece How a Luxury Rental DSCR Loan Works in Vero Beach shows how the same logic scales up.
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 Coastal Carrying Costs Move the Ratio?
Because insurance and HOA dues sit in the denominator, and Grand Strand properties often carry both heavily. The rent side of the equation can look perfect while the cost side quietly breaks it.
Start with flood. Horry County states that federal law makes flood insurance mandatory for federally related financing on buildings in Special Flood Hazard Areas, and that the county participates in the National Flood Insurance Program. That mandate applies to federally related financing. Whether a DSCR lender requires flood coverage is a program decision. Many do for properties in mapped flood zones.
Wind is a separate policy question. Coastal homeowners policies may carry a named-storm deductible, and wind coverage in the most exposed zones can come through a separate residual market. Flood coverage often has its own waiting period. Get the real insurance quotes in hand before you commit, not after.
Budget for taxes and insurance, which vary by county and property. Then stress-test the ratio against the off-season. A summer-heavy market can hide lean months inside an annual average, and you still owe the payment every month.
What If the Ratio Falls Short?
Most near-misses have a fix. The fix depends on which side of the equation is the problem.
| Problem | Typical remedy |
|---|---|
| Coverage below the program floor | Larger down payment, lower leverage, or a sub-1.00 select-lender path with adjusted terms |
| Costs too high | Shop insurance, or choose a building with lower dues |
| Income figure too low | Add operating history, or qualify on long-term rent |
| Credit tier too low | Improve the score for better leverage tiers |
| Reserves short | Move assets or document additional funds |
An interest-only period can improve coverage on paper. The payment steps up later, so run the numbers for that stage too. Choosing a different property is also a legitimate answer. (Sometimes the best fix is a better building.)
A Pre-Offer Checklist
Run through these before you go under contract:
- Confirmed the property’s rental use with the right local authority, HOA, and building documents.
- Chosen the income method: history, projection, or long-term rent.
- Pre-screened the deal with a broker for the ratio, LTV, and credit tier.
- Collected real insurance, flood, and HOA numbers.
- Confirmed reserves are liquid and documented.
- Decided the entity and guarantor setup, subject to program terms.
- Picked a prepayment structure that fits your hold period.
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.
Frequently Asked Questions
Can short-term rental income qualify for the loan?
It can, if the program accepts the income method. Lenders look at operating history, a market-data projection, or an appraisal-based figure. Gross booking revenue alone is not the coverage figure. Expect an adjustment before the ratio is calculated.
Do I need prior short-term rental experience?
Not always, but history helps. Many short-term files want about 12 months of hosting records. A property with no history can lean on a projection or on long-term rent, though that may change the leverage.
Can I buy in an LLC?
Often, subject to lender program eligibility. The entity holds title, and the owner usually signs a personal guarantee. Recourse still runs to you. An LLC organizes ownership but does not remove personal exposure.
Can I refinance and pull cash out of a Myrtle Beach rental?
Yes, on eligible properties. Standard rentals reach about 75% LTV on a cash-out, while short-term rental cash-out sits around 70%. About 6 months of seasoning is the common expectation. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
What can sink a condotel file?
A mandatory rental pool, a restrictive overlay tier, or an operator that takes a large share of gross income. Each lender sets its own view, so a condotel that fails with one lender may work with another.
Next Step
Out-of-state investors often buy Myrtle Beach rentals sight unseen, and the coverage math is what keeps those deals honest. 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 broker, it arranges these loans through select lenders in its wholesale network across 41 markets, including Washington, D.C. Programs change, and every file is underwritten individually. This is informational, not a commitment to lend. Seasonal swings in a resort market reward the investor who checks the off-season ratio before writing the offer.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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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
1. AirDNA, Myrtle Beach Vacation Rental Overview
2. CFPB, Regulation Z §1026.3 (business-purpose exemption)
3. Horry County, Flood Insurance
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is a DSCR Loan Worth It Over a Conventional Loan on a Rental? · Can You Reapply for a DSCR Loan After a Rental Income Denial? · Can You Get a DSCR Loan on a Vacant Rental With No Lease?
Guides: DSCR Loans in Myrtle Beach, SC · DSCR Loans in South Carolina
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.