The Quick Read: Usually far less than 75% of the property’s value, because 75% caps the entire new loan, not your check, and across the wholesale network short-term rental collateral typically tops out at 70% on a cash-out while standard long-term rentals reach 75%. Your cash is the new loan minus the old payoff, closing costs, prepaid items, any prepayment penalty, and required reserves.
- The formula is appraised value times the leverage cap, minus everything owed or spent at closing.
- Rent coverage can limit the loan before equity does.
- A low appraisal cuts cash faster than most investors expect.
- Clearing 1.00 coverage on the loan is not the same as the property cash-flowing.
What Does 75% Loan-to-Value Actually Mean for Your Check?
The 75% is a ceiling on the total loan. It says nothing about how much of that loan reaches your bank account.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Nov 5, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
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.
Loan-to-value (LTV) is the new loan divided by the appraised value. At 75%, a lender will lend up to three-quarters of what the appraiser says the property is worth. If you already owe money on the property, that debt gets paid off first. What remains is your gross cash. Closing costs and other items then come out of it.
Here is the clean version, using value as 100 units so no dollar figures get in the way. Value of 100 times 75% gives a maximum loan of 75. Owe 50 today and the gross cash is 25. Costs, prepaids, any penalty and reserves come off that 25. The same math holds for any lender.
One catch matters for this title. Across the programs I place files with, a short-term rental (STR) cash-out typically caps at 70% of value, while standard long-term rentals reach 75% on a cash-out. So if your property is an Airbnb-style rental, run the math at 70% first. The 75% case describes the long-term-rental ceiling, and it makes a useful upper bound for comparison.
Key Terms Defined
Loan-to-value (LTV): The new loan balance divided by the property’s appraised value.
Cash-out refinance: A new loan that pays off the old one and returns the leftover equity to you as cash.
DSCR (debt service coverage ratio): Monthly rent divided by the monthly payment of principal, interest, taxes, insurance and any HOA dues (PITIA).
Seasoning: The waiting period a lender wants after you buy a property before it sizes a loan on appraised value instead of cost.
Reserves: Liquid money a lender wants you to hold after closing, usually counted in months of PITIA.
Prepaid items: Costs paid up front at closing, such as initial insurance premiums and tax escrow deposits.
How Do You Calculate the Cash You Actually Receive?
Start with value times the leverage cap, then subtract in a fixed order: payoff, closing costs, prepaids, penalties, reserves. That order is the net-cash waterfall, and it is where the headline number shrinks.
1. Maximum loan. Appraised value times the cap (70% for STR collateral, 75% for a standard rental).
2. Payoff. Every lien on the property, including a second mortgage or a partner’s stake.
3. Closing costs. Lender, title and appraisal charges. Rolling them into the loan means you bring less cash to closing, but the loan balance and the payment both grow, and the check you receive is no larger.
4. Prepaids. Insurance and tax deposits collected at closing.
5. Prepayment penalty on the old loan. A step-down penalty on your current loan comes straight out of your proceeds.
6. Reserves. Programs vary by lender, leverage, loan size and transaction type. Around six months of PITIA is common, and larger loans can step up. Reserves that must be held in your own accounts are not deducted from the check at closing, but they tie up cash you may have wanted to spend.
Here is the same property at three payoff levels, using a 70% STR cash-out cap and measuring everything as a share of appraised value. Costs and reserves come off afterward.
| Payoff (% of value) | Max loan (% of value) | Gross cash (% of value) |
|---|---|---|
| 30% | 70% | 40% |
| 50% | 70% | 20% |
| 65% | 70% | 5% |
Partner buyouts are generally treated as cash-out, because money leaves the loan to buy out someone else. A fully paid-off property is also a cash-out when the lender returns cash to you.
What Happens When the Appraisal Comes in Low?
Every point the value drops takes cash straight out of your pocket. The loan is sized on the lower value, but your payoff stays the same.
Take a property you expect to appraise at 100 units with a payoff of 50 units. At the 70% STR cap, the numbers move like this:
| Appraised value (per 100 expected) | Max loan | Gross cash |
|---|---|---|
| 90 | 63 | 13 |
| 100 | 70 | 20 |
| 110 | 77 | 27 |
A 10% miss on value cuts gross cash by about a third in this example. The leverage on a refinance magnifies appraisal error, so build a cushion into the cash you plan to use.
Does the Appraisal Count Your Airbnb Income?
Usually not the way you hope. The standard rent form measures monthly lease rent, not nightly booking income.
For a one-unit home, the appraiser typically completes a rent schedule on Form 1007. For two to four units, the equivalent is Form 1025. Fannie Mae’s Appraiser Update says the 1007 was not designed for short-term rentals and cannot estimate a nightly fee. Appraisers must use monthly-lease comparables. McKissock, an appraiser-education publisher, adds that appraisers can’t multiply a nightly rate by 30 to get market rent. It notes that an appraiser may use another tool such as AirDNA for an STR estimate.
Some appraisers add a narrative section. Class Valuation says STR-competent appraisers attach a narrative addendum titled Short-Term Rental Projected Income Analysis. HousingWire argues that pushing STR income through the 1007 produces artificially low coverage ratios, and that the industry’s next appraisal data standard, UAD 3.6, will retire the legacy forms, including the 1007.
For you the practical point is simple. Value and rent are two separate appraisal outputs. Value drives the LTV math. Rent drives the coverage math. Ask early which rent figure the program will count.
Which Limit Hits First: Equity or Rent?
The smaller of two numbers decides the loan: what equity allows and what rent can carry. Investors often check only the first.
The equity limit is value times the cap. The rent limit is the loan size at which the property’s counted rent still meets the program’s coverage floor. For STR collateral, the network’s refinance floor is typically 1.00, while STR purchases typically want 1.10. Stronger ratios generally open better leverage and pricing. Some select lenders in the network will review coverage below 1.00 with leverage and terms adjusted, but that is a separate path, not a looser version of the standard one.
Coverage is a division problem. Rent in the numerator, full PITIA in the denominator. A cash-out reprices the whole balance, not just the new money. Pulling out cash raises the monthly obligation on everything you owe, which pushes coverage toward the floor. Rolling closing costs into the loan does the same, because it enlarges the balance.
Picture an owner with a lot of equity and a property whose counted rent is modest. The equity limit might allow a large loan, but the coverage test might allow a smaller one. That owner would receive cash based on the rent limit, not the 70% cap. The reverse also happens, where rent is strong and equity is the constraint. Taking slightly less cash often improves coverage and terms. That is simple arithmetic, not a program promise.
One more warning, because it costs investors money: DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities and capital expenses sit outside the calculation. Those costs can weigh heavily on a short-term rental, so size your cash-out against your own operating numbers, not only the lender’s ratio.
Which Rent Number Will the Lender Use?
Programs differ, and this one choice can swing the whole outcome. Some use only the appraiser’s market-rent figure. Others will consider documented STR performance, such as platform statements, bank deposits or host history. Across the network, short-term rental programs typically expect about 12 months of hosting experience and a credit score of at least 640, subject to lender guidelines.
If your property looks strong on AirDNA but the lender counts the appraiser’s monthly figure, coverage can come out thinner than you modeled. Know that before you pay for an appraisal. 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.
Does Seasoning Change the Answer?
Yes. Inside the seasoning window, lenders often size on your documented cost basis instead of today’s appraised value. That can shrink your cash sharply.
The clock typically starts at the recorded deed date, and the length of the window varies by program. If you bought below market or renovated heavily, the gap between cost and value is exactly what you are trying to pull out, so waiting out the window matters.
When Does Little or No Cash Come Out?
Check these before you spend money on an appraisal:
- Payoff near the cap. If your current balance is already around 70% of value, little remains after costs.
- Short seasoning. Cost basis may replace appraised value.
- Thin counted rent. Coverage, not equity, may limit the loan.
- A prepayment penalty on the old loan. It comes straight off your proceeds.
- Credit or hosting history below program minimums. STR files typically look for 640 and about 12 months of hosting.
- A property type the programs don’t offer. Manufactured homes, log homes and barndominiums are not offered in the network’s DSCR programs.
If the numbers fall short, you have three practical moves: take a smaller cash-out, wait until seasoning or value improves, or reappraise with an appraiser who includes an STR income analysis. Which one fits depends on your goal for the cash.
Is the Cash Worth the Cost?
Sometimes, and sometimes not. Compare what you would pay to refinance against what the cash will earn.
A cash-out resets the whole loan. You pay costs on the entire balance, and a new prepayment penalty may apply if you sell or refinance again soon. Common uses of proceeds include a down payment on the next rental, renovations that may support a higher appraised value depending on comps and underwriter review, or a debt payoff. Each deserves its own math, and the check should clear your costs with room to spare.
The borrower file generally is strongest when it clears both tests: enough equity and enough rental coverage. A larger equity cushion lowers the payment and can lift coverage, but it never erases leverage caps, credit floors, reserve rules or property eligibility. For a wider look at how these loans fit together, see the complete DSCR loans guide.
The same logic applies to loan size. Standard programs run up to $3,000,000, and balances below the standard-program minimum route through select lenders in the network. Above $2,500,000, the network generally holds to 30-year fixed structures. Extended terms and interest-only periods are available through select lenders, and adjustable structures exist for investors who want them. All of it is subject to lender guidelines and individual underwriting.
Frequently Asked Questions
Can I really get 75% on a short-term rental cash-out?
Typically not. Across the wholesale network, STR cash-out generally tops out at 70% LTV, while standard long-term rentals reach 75% on a cash-out. Purchases on STR collateral can reach 75% on the strongest files. Programs change and every file is underwritten individually.
How do I estimate my cash before applying?
Multiply the appraised value by 70% for an STR, subtract your payoff, then subtract closing costs, prepaids and any prepayment penalty. Check that the new loan still meets the coverage floor. The site’s illustrative calculator can help you test numbers, though it is an estimate, not a quote.
Does the lender use my Airbnb bookings or the appraiser’s rent?
It depends on the program. Some lenders use only the appraiser’s market-rent opinion, and others consider documented STR income. Ask before you order the appraisal, because the answer changes your coverage ratio and your loan size.
What if my property is inside the seasoning window?
The lender may size the loan on your cost basis instead of appraised value, which can cut cash significantly. Around six months of ownership is the common expectation across most of the network, though it varies by program.
Can a cash-out refinance fail even with plenty of equity?
Yes. If counted rent can’t carry the larger payment at the program’s coverage floor, the loan shrinks. Credit, hosting history, reserves and property eligibility can also limit or stop the file.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker that arranges DSCR investor loans through select lenders in its wholesale network, covering 41 markets, including Washington, D.C. It is not a lender, and every file is reviewed by the lender subject to its guidelines. This article is informational and not a commitment to lend. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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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. Fannie Mae Appraiser Update
2. McKissock
4. HousingWire: Short-Term Rentals Are Breaking the Appraisal Playbook
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: Banks That Offer a Short-Term Rental Cash-Out Refinance to Consolidate Debt · How Much Down Payment a Rental Cash-Out Refinance Can Cover · How Much Cash Comes Out of a Short-Term Rental Cash-Out Refinance Right After Rehab?
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.