At a Glance: In Lendmire’s wholesale network, a long-term rental cash-out refinance typically reaches about 75% loan-to-value, while short-term-rental collateral is capped at 70% on a cash-out, with extra history requirements, all subject to lender guidelines, property type, leverage, and a full credit review.
- Long-term rental cash-out typically runs up to about 75% LTV, with about 6 months of seasoning as the common expectation.
- Short-term rental cash-out is capped at 70% LTV, with a 640 minimum credit score and about 12 months of host experience.
- Both loans are tested on equity and on rental coverage, and the lower result sets the loan amount.
- Clearing 1.00 coverage means rent covers PITIA, not that the property cash flows after repairs, vacancy, and management.
- Short-term rental rules vary by city, county, HOA, and property type, so confirm local rules before relying on projected income.
The Quick Read: On a cash-out refinance of a standard long-term rental, most programs in Lendmire’s wholesale network top out around 75% loan-to-value. On a cash-out of short-term-rental collateral, the ceiling is 70%, because vacation-style income is harder to predict than a lease and the file carries extra history and documentation requirements.
- Both are tested twice, once on equity and once on rental coverage, and the lower result sets your loan.
- Clearing 1.00 coverage does not mean the property cash flows. It means rent covers the mortgage payment.
- All figures are typical ranges from select lenders, subject to lender guidelines and not a commitment to lend.
DSCR Cash-Out Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Nov 5, 2026
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As of Nov 5, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. 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 Honest Answer
Pick the long-term rental loan if your property is leased, or could be leased, and you want the higher leverage with the simpler file. Pick the short-term rental cash-out if the property truly earns more as a vacation or furnished stay, you have the booking history to prove it, and you accept a lower ceiling.
The 75% number in the title is where the two split. Short-term rental purchase loans can reach 75% LTV on the strongest files, so the number feels familiar. On a cash-out, short-term collateral steps down to 70%, while standard long-term rentals hold near 75%. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
That five-point gap is the most visible difference. It is not the only one, and it is not always the one that decides your loan.
Side-by-Side
Both columns reflect Lendmire’s wholesale network of DSCR lenders. Individual programs vary, and every file is reviewed on its own.
| Factor | Short-Term Rental Cash-Out | Long-Term Rental Cash-Out |
|---|---|---|
| Income figure used | Booking history or market projection | Lease or appraiser’s market rent |
| Cash-out LTV ceiling | Up to 70% | Around 75% across most programs |
| Credit score | 640 minimum | About 660 typical; 620 in parts of network |
| Experience expected | About 12 months hosting | Seasoning of about 6 months common |
| Coverage floor | 1.00 on refinances | 1.00 where select programs start |
| Appraisal rent form | 1007 or 1025, plus income evidence | 1007 (single-family) or 1025 (2-4 units) |
Reserves are cash left in the bank after closing, and PITIA means principal, interest, taxes, insurance, and association dues. Reserve requirements move with leverage, loan size, and transaction type, so confirm them for your own cash-out file.
Key Terms Defined
Loan-to-value (LTV): the loan balance divided by the appraised value of the property.
Cash-out refinance: a new, larger loan that pays off the old one and hands you the difference.
Coverage ratio (DSCR): the property’s monthly rent divided by its monthly PITIA.
Seasoning: how long you have owned the property before a lender will refinance it.
Hosting history: the record of bookings, income, and guest activity on a short-term rental.
How the 75% Figure Actually Works
The LTV cap is applied to the appraised value of the property. It is not applied to your projected income or to a rehab estimate. An income report can support the rent side of the file, but only the appraisal sets the value side.
Your maximum cash-out loan is the cap times the appraised value. The cash you receive is that loan minus your payoff, closing costs, and any required holdbacks. Take a property you owe 60% of its value on. A long-term rental cash-out near 75% leaves about 15 points of value available as cash-out room before costs. The short-term cap of 70% leaves about 10 points. The difference stays in the property, not in your account. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Then the second test applies. Coverage is run on the new, larger loan, and a cash-out raises the balance. A property that covered its old payment comfortably can cover the new one more thinly.
The strongest files clear both tests: enough equity and enough rental coverage. Clearing them still depends on credit floors, reserve rules, and property eligibility, which no single strength in the file replaces.
Coverage also has a ceiling on what it tells you. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A property can pass at 1.00 and still lose money after those costs.
Many select programs set their coverage floor at 1.00. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Neither path makes a weak property strong.
When a Short-Term Rental Cash-Out Is the Better Fit
This option fits when the property’s best use really is short-term, and you can show it. The reasons are practical.
The appraiser’s rent would understate the property. The 1007 form (single-family) and the 1025 form (small multifamily) estimate market rent for a standard lease. For a well-located furnished stay, that figure can sit well below what the property actually earns. Income-based underwriting on actual bookings can reflect that, where a lease-based test would not.
You have the history. The program expects about 12 months of host experience. Platform statements matched to bank deposits make that easy to show. If you have a full year of bookings, the file reads clearly.
You want to keep the strategy. Converting a working vacation rental to a lease to chase 5 more points of leverage may cost you more income than the extra proceeds are worth. If the property earns well as a short-term stay, a 70% ceiling is the price of staying in that strategy.
Your coverage holds at the new balance. Short-term income swings by season. Some programs apply an expense factor to booking income before coverage is run. Run your numbers on the reduced figure, not the gross.
When a Long-Term Rental Loan Is the Better Fit
This option fits when you want maximum cash from the equity and a simpler file.
You need the extra leverage. Near 75% LTV on a cash-out of a standard long-term rental, you can pull about five more points of value than the 70% short-term ceiling allows. That matters most on a property with modest equity, where five points is a meaningful share of the proceeds. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The file is easier to document. A signed lease or an appraiser’s rent schedule is the income evidence. There is no booking history to assemble and less debate about which income number counts. The credit floor can also be a little lower. Most programs want a score around 660, but a 620 floor exists in parts of the network, compared with the 640 short-term minimum. A score of 700 or higher opens the strongest leverage tiers.
The property is new to your portfolio. Seasoning of about 6 months is the common expectation on a cash-out. A recently converted or recently bought property may not have a year of hosting history, but it can meet seasoning. If your short-term track record is thin, qualifying on long-term rent may be the realistic path.
The seasonal swing worries you. A lease smooths out weak months. A property that earns strongly in summer and thinly in winter can look different depending on when the file is pulled. A lease removes that distortion.
The tradeoff is real. If the lease rent comes in well below what the property earns as a short-term rental, the 1.00 coverage test may bind before the LTV cap does. The higher ceiling then does you no good, because coverage caps the loan first.
Which Test Binds First?
Run both tests before you choose. Your loan is the lower of the two results, so know which one will hold you back.
If you have deep equity and thin rent, coverage binds. The loan shrinks until rent covers the payment, and the LTV cap never comes into play. If you have strong rent and modest equity, the LTV cap binds, and the 70% versus 75% gap decides your proceeds.
Property income can swing the result either way. A lease-based figure may fail where booking income passes, and a seasonal property can show the reverse when trailing months are weak. That is why the same building can look like a different loan under each structure.
Two edge cases are worth planning for. First, a mid-term rental, such as furnished stays of a few months, may fit neither column cleanly, so ask how a given program treats it. Second, a short-term property with a short track record may qualify more easily on long-term market rent than on its own bookings. Several lenders in the network will do that, though terms differ by program.
What Shrinks the Check You Receive
Headline LTV and actual cash in hand are different numbers. Several items sit between them:
- Your existing loan payoff, which comes out first.
- Closing costs and any prepayment charge on the loan you are paying off.
- Holdbacks or reserves the new lender requires you to keep.
- Appraisal and entity document costs, including LLC paperwork when the property is vested in an entity, subject to lender program eligibility.
Documents add one more wrinkle. An entity changes who owns the property. It does not remove the borrower’s personal profile from the review.
A cash-out is also a lump sum sized on the lender’s appraisal. An after-repair estimate is a planning number, not a loan basis.
Same Regulatory Footing
These two loans do not differ on the personal-income question. 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 Federal Register’s final ability-to-repay rule treats investment-purpose credit as business-purpose, and the OCC’s Comptroller’s Handbook on truth in lending lists credit extended primarily for a business purpose as exempt from Regulation Z.
Both options therefore qualify primarily on property-level rental income covering the payment, subject to lender guidelines. The difference lies in which income figure counts, not in whether personal income is the test. That framing is also why house-hack and owner-occupied files belong to a different product.
The Verdict
Neither option wins on paper. The long-term rental cash-out wins on leverage and simplicity: about 75% LTV on a standard rental, about 6 months of seasoning, and a file built on a lease or rent schedule. The short-term rental cash-out wins when the property’s real earning power sits in its bookings, and that is worth a 70% ceiling, a 640 minimum score, and a year of host experience. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Decide with three questions. Does the property earn materially more as a short-term stay? Do you have about 12 months of history to prove it? Does coverage hold on the new, larger balance? Three yeses point to the short-term file. A no on the first or second points to the long-term loan.
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. The brokerage arranges these loans through select lenders in its wholesale network across 41 markets, including Washington, D.C. You can start with the complete DSCR loans guide and use the illustrative calculator on the site to test coverage under both structures.
Frequently Asked Questions
Can a short-term rental be cash-out refinanced at all?
Yes, on programs that accept short-term collateral. In Lendmire’s network, cash-out on a short-term rental reaches up to 70% LTV, with a 640 minimum credit score and about 12 months of host experience typically expected. Everything is subject to lender guidelines and property review.
Does the 75% cap apply to both?
No. Around 75% LTV is the cash-out ceiling on a standard long-term rental across most of the network, while short-term-rental collateral is capped at 70% on a cash-out. Short-term purchase loans can reach 75%, which is why the figure gets mixed up. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
If I pass 1.00 coverage, will the property cash flow?
Not necessarily. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses are outside the calculation, so a property can clear 1.00 and still run short each month. A cash-out also raises the payment, which moves coverage closer to the line.
What if the appraiser’s rent comes in below what my property actually earns?
The appraisal’s rent schedule can understate a successful short-term rental. On a short-term file, income evidence such as platform statements and bank deposits supports your actual earnings, subject to the program. If your booking history is short, qualifying on long-term market rent may be the fallback, at the long-term structure’s terms.
Can I cash out if the property is held in an LLC?
Often yes, per lender program requirements. The guarantor’s personal credit and liabilities usually still enter the file even when the entity holds title, so expect personal documentation alongside the entity documents.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
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References
1. Federal Register: Ability-to-Repay and Qualified Mortgage Standards Under the Truth in Lending Act
2. OCC Comptroller’s Handbook: Truth in Lending Act
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: New Appraisal vs Old Appraisal for a Rental Cash-Out Refinance · Should You Use a DSCR Cash-Out Instead of Taking a 401(k) Loan? · How to Get a Short-Term Rental Cash-Out on a First Rental With No Tax History
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.