The Quick Read: It depends on two tests, because the cash typically equals the lower of what the 70% cash-out LTV cap on short-term-rental collateral allows and what the property’s rent can carry at a 1.00 coverage floor, minus the existing payoff, closing costs, and reserves, all subject to lender guidelines. High values raise the gross dollars. State mortgage taxes and recording fees on the new loan then take a bigger bite out of the check.
- Typical expectations are a 640+ credit score and about 12 months of hosting history.
- Reserves are commonly around 6 months of PITIA and stay in the file, not in your pocket.
- Gross proceeds and net proceeds are different numbers. Plan around the net.
What Sets the Size of the Check?
Two limits size the loan, and the smaller one wins. The first is equity: appraised value times the cash-out LTV cap. The second is coverage: the largest loan at which the property’s rent still covers the new monthly obligation at the program floor.
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DSCR (debt service coverage ratio) compares rent to PITIA, meaning principal, interest, taxes, insurance, and any HOA dues. A cash-out raises the loan balance, so it raises PITIA and pushes coverage down. In most markets the equity test binds first. On a short-term rental with modest documented income, the coverage test can bind first and shrink the check.
Across the wholesale network of DSCR lenders that Lendmire works with, short-term-rental collateral sits in its own category. It carries lower leverage than a standard rental, and it expects hosting history. Most files want a 640+ score. Stronger credit and stronger coverage generally open better terms, subject to lender guidelines.
Clearing 1.00 on paper is not the same as positive cash flow. The calculation leaves out repairs, vacancy, management, utilities, and capex. Short-term rentals carry heavier operating costs than long-term leases, so the gap between “qualifies” and “cash flows” is wider.
The complete DSCR loans guide covers how these tests work across property types.
A Worked Example in Percentages of Value
The cleanest way to estimate the check is to work in percentages of value. The table below is hypothetical. It assumes the equity test binds first and shows gross release before costs.
| Existing payoff (% of value) | STR cash-out at 70% LTV | Standard rental at 75% LTV |
|---|---|---|
| 40% | 30% of value | 35% of value |
| 50% | 20% of value | 25% of value |
| 60% | 10% of value | 15% of value |
The gap between the columns is always five points of value. On a high-value property, that gap is a meaningful amount of money. It is the price of holding short-term-rental collateral instead of a standard long-term rental.
Now subtract costs. Take the middle row, with a payoff at 50% of value. Gross release is 20% of value. Closing costs come out of that, and reserves must stay liquid. The next section puts numbers on the costs. Multiply the percentages by your own appraised value, or use the site’s illustrative calculator for a rough dollar estimate. Both are estimates, not quotes.
Why a High-Cost State Changes the Net, Not the Cap
The leverage cap is the same in every state. A short-term rental refinances at about 70% LTV on a cash-out, whether the property sits in a pricey coastal market or a modest inland one. Network programs carry no state-specific LTV overlay. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
What changes is the dollar scale and the cost of closing. Values are higher, so 20% of value is a bigger check. Government charges on the new loan are also bigger.
LodeStar data reported by Scotsman Guide puts the national average refinance closing cost at 0.67% of the loan amount. New York refinances average 2.06% of the loan amount, the highest in the nation, with average closing costs of $10,553 including recording and taxes. Florida was the only other state above 1%. LodeStar’s data director ties the top rankings to each state’s mortgage taxes and recording-fee structure.
Those are averages for typical loans. Large investor loans in high-tax states can run higher in dollar terms, so do not extrapolate a dollar figure for a specific file from them.
Here is what the percentages mean on the middle-row example. A loan at 70% of value carrying 2.06% in costs gives up roughly 1.4% of value. At the national average of 0.67%, the cost is closer to 0.5% of value. On a payoff at 50% of value, the gross check of 20% of value shrinks to about 18.6% at the New York average, against about 19.5% at the national average. Your actual figure depends on the title quote, so ask for it before you commit to a purchase contract that depends on the cash.
Mortgage recording and similar state taxes drive these differences. Transfer taxes apply to sales, not refinances. In some high-tax states, a consolidation-style structure can limit tax to the new money above the old balance. That is a question for your title agent or attorney, not something to assume.
How the Appraisal and Income Documentation Fit
The appraisal sets value, and value sets the equity test. Your short-term-rental income is documented separately.
This matters because the standard rent schedule does not capture nightly income. Fannie Mae’s appraiser update describes Form 1007 as the single-family comparable rent schedule, built on monthly market rent supported by monthly-lease comparables, and says it cannot estimate a nightly fee. McKissock, an appraiser-education publisher, adds that the form is not designed for short-term rentals and that business income falls outside its scope. DSCR loans are not agency products, so the form name is the only connection here.
So lenders typically look at about 12 months of platform payouts, bank deposits, and proof the rental operates lawfully. They usually apply a haircut to gross receipts. 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.
Programs differ on which income figure drives coverage. Some lenders weigh the appraiser’s monthly rent figure. Others work from documented booking history. If a low rent schedule meets a high value, coverage can cap the loan below the equity limit. A few lenders in the network allow a variance supported by a current lease or trailing income. That is one reason a file is matched to the lender, not just to the loan type.
Edge Cases That Change the Answer
A former or converted Airbnb. A property now leased long-term generally goes the long-term route, with a 75% cap on cash-out. A property with about 12 months of hosting history can sometimes go through as short-term-rental collateral at 70%. Only the months since conversion count as short-term income.
Projection-only files. Some lenders will look at AirDNA-style projections, but this is a narrow path. Where it exists, the figure is discounted, and coverage and leverage limits still apply. A refinance leans on actual booking history, so a new listing is usually stronger after it builds a record.
Free-and-clear properties. With no payoff, the whole new loan is cash. It is still a cash-out refinance, sized at the cash-out ceiling.
Larger balances. Standard programs run up to $3,000,000. Above $2,500,000, the network generally holds to 30-year fixed structures. Reserve requirements commonly step up as loan size grows.
Appraisal shortfall. At a 70% cap, a modest drop in appraised value cuts the loan ceiling and the check by more than most owners expect. Because the cash is the residual after the payoff, each dollar of lost value cuts the check by 70 cents.
Coverage below 1.00. Many select programs start at 1.00. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. It is available through select lenders in the network, not as a standard feature.
Key Terms Defined
Cash-out refinance: A new, larger loan that pays off the old one and returns the difference to the borrower.
LTV (loan-to-value): The loan amount divided by the appraised value, shown as a percentage.
DSCR: Monthly rent divided by the full monthly obligation of principal, interest, taxes, insurance, and dues.
Seasoning: The time you must hold the property before a cash-out, commonly about 6 months from the recorded deed.
Net proceeds: The check you actually receive after payoff, closing costs, prepaids, and any reserves that must stay liquid.
Reserves: Liquid funds held after closing, commonly around 6 months of PITIA, though they vary by lender, leverage, loan size, and transaction type.
Should You Take the Full Amount?
The maximum is a ceiling, not a target. Use the number that makes sense for what the cash will do.
Taking less lowers PITIA and raises coverage. That can improve the file and widen your margin if bookings soften. If the cash funds another rental, the second property’s cash flow has to hold up on its own.
Waiting can also help. About 12 months of hosting history is often the cleaner path than forcing an early file. A property with a short booking record may get a stronger result by seasoning first.
It is also worth weighing the cash-out against a no-cash refinance, which still creates a new loan but returns nothing to you. The strongest files clear both tests: enough equity and enough rental coverage.
If the plan is to deploy the proceeds elsewhere, the net matters more than the gross. High-tax states cost more at closing, so the same percentage of value delivers a smaller share of cash than the headline cap suggests.
Frequently Asked Questions
Is the cash-out limit different in a high-cost state?
No. The LTV cap is set by the program and the property type, not by the state. A standard long-term rental on a cash-out reaches about 75%, while short-term-rental collateral stays at about 70%. What changes is the dollar scale and the closing costs. Higher values produce larger gross checks, and state mortgage taxes and recording fees can shrink the net. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Can rent coverage limit my cash-out below the LTV cap?
Yes. The loan is sized at the lower of the equity limit and the coverage limit. Cash-out raises the payment, so coverage falls as you take more. On a short-term rental with modest documented income or a low appraiser rent figure, coverage can bind first. Borrowing a smaller amount can bring the number back above the 1.00 floor.
Do I need 12 months of hosting history to cash out?
Typically yes. Short-term-rental collateral usually expects about 12 months of hosting history, with payouts and bank deposits to document it. Projection-only files exist at a few select lenders, but they are discounted and still face coverage and leverage limits. If the history is short, waiting can produce a stronger file than rushing.
What is the minimum credit score for a short-term-rental cash-out?
Most files want 640 or higher on short-term-rental programs. Exact eligibility depends on lender guidelines, reserves, and property review.
Does a free-and-clear property avoid the cash-out limits?
No. With no existing loan there is no payoff to subtract, but any cash taken still counts as a cash-out refinance. The cash-out ceiling applies, and seasoning and reserve rules still apply.
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. As a broker, Lendmire arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Programs change, each file is reviewed individually, and nothing here is a commitment to lend.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide: Transfer Taxes Still Play Major Role in State Closing Cost Rankings (LodeStar data)
2. Fannie Mae’s appraiser update
3. McKissock
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: Does a Short-Term Rental Cash-Out Refinance Make Sense Instead of Selling the Rental? · Can You Get Approved for a Short-Term Rental Cash-Out Refinance With Interest-Only Period? · Short-Term Rental Cash-Out Refinance Requirements for an Out-of-State Investor
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.