The Quick Read: The best provider for this move depends on your property, your credit, and how you document short-term rental income, so no single ranked list can answer it. You refinance the property you own, pull out cash, and use that cash as down payment and reserves on a second, separate loan in the new market. A mortgage broker shops several wholesale lenders and matches your file to the program that fits.
- Two loans are involved: a cash-out refinance on the property you own, then a purchase loan on the Airbnb.
- On short-term rental collateral, cash-out typically tops out around 70% LTV, and purchases reach up to 75% on the strongest files.
- Short-term rental files typically expect a 640+ credit score and about 12 months of hosting history, subject to lender guidelines.
- A coverage ratio of 1.00 is where select programs start for short-term rentals. It does not mean the property cash flows.
You will notice this article does not name or rank a single lender. That is deliberate. Lendmire is a mortgage broker, not a lender, and the right program changes with every file. What follows is how these lenders think, so you can judge any provider, including the ones a broker puts in front of you.
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Why Can’t Anyone Honestly Rank the Top Providers?
Any honest ranking would fail, because the provider that fits one borrower can be wrong for the next. Property type, hosting history, credit, leverage need and documentation all change which program works. A broker that shops multiple wholesale lenders can match the scenario to the program instead of forcing a file into one lender’s box.
Think about the variables. One investor owns a lake cabin with two years of platform payouts. Another owns a long-term rental that has never hosted a guest. A third wants to buy a home with no booking history at all. Each file lands in a different corner of the network. The lenders that write this depend on how your income is documented, how much equity you hold, and what you plan to buy.
So treat “top” as “best fit for your situation.” The rest of this article gives you the criteria to test fit yourself. For the broader picture of how these loans work, see the complete DSCR loans guide.
Key Terms Defined
DSCR (debt service coverage ratio): A property’s rental income divided by its monthly housing obligation. The obligation is principal, interest, taxes, insurance and association dues, known together as PITIA.
Cash-out refinance: You replace your current mortgage with a larger one and receive the difference as cash. The CFPB describes it as a way to tap home equity.
Seasoning: The waiting period a lender wants after you buy a property before it will refinance. About six months is a common expectation across the network.
LTV (loan-to-value): The loan balance divided by the property’s appraised value.
Collateral: The property that secures a loan. In this deal you have two: the one you refinance and the one you buy.
Short-term rental (STR): A property rented by the night or week, usually through a platform such as Airbnb.
How Does the Two-Loan Structure Work?
The refinance does not buy the Airbnb. It only produces cash. The purchase is a separate loan with its own test, its own appraisal and its own income method. Your original property stays yours, keeps producing income, and now carries a bigger loan.
Here is the sequence, step by step.
1. Classify the collateral. Your current property is either a standard long-term rental or a short-term rental. That decides the leverage tier. A standard rental cash-out tops out around 75% LTV across most of the network. A short-term rental cash-out is typically 70%.
2. Choose the income method. The lender needs a way to count the rent. Options are covered in the next section.
3. Order the appraisal. It sets the maximum loan size and may include a rent schedule or a short-term rental narrative.
4. Test coverage on the new payment. After cash-out, principal rises while taxes and insurance stay put. The larger payment drives the ratio.
5. Net the proceeds. Cash-out equals the new loan minus the payoff, closing costs and prepaid items. Headline equity is not cash in hand.
6. Fund and trace the cash. Proceeds need to be in your account before the purchase closes. Lenders on the purchase side generally want to see where your down payment and reserves came from.
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 file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
How Does a Lender Count Airbnb Income?
Lenders count short-term rental income in a few ways, and the method changes your ratio. The common options are documented hosting history, a third-party market projection, or the appraiser’s rent figure. Many lenders also reduce gross short-term income by an expense factor before calculating coverage.
Hosting history. Platform payouts, management statements and bank deposits show what the property actually earned. These records are what the lender reviews to confirm real performance.
Market projection. For a purchase with no history, a lender may use a projection from a rental-data provider. As an illustration, $10,000 of monthly income with a 20% expense factor becomes $8,000 of qualifying income. That is a market-wide observation, not a program term. Your lender’s treatment may differ.
The takeaway is simple: the denominator, PITIA, does not shrink. So the real ratio is always lower than a gross-revenue estimate suggests.
Appraiser rent. Some programs fall back to the appraiser’s long-term market rent. This is where many Airbnb owners get surprised. Form 1007 documents indicated monthly market rent from long-term comparables and was not designed for appraising single-family homes used as short-term rentals. McKissock, an appraisal-education provider, adds that the form cannot document short-term rental rates. The form names matter here, but DSCR programs set their own rules.
So a property that clears 1.00 on Airbnb income can look weaker on paper if a program defaults to the long-term rent. Appraisers who handle short-term rentals well often add a narrative section, which Class Valuation calls a Short-Term Rental Projected Income Analysis. Two- to four-unit properties use a different form, the 1025, and documentation questions multiply.
What Do Network Lenders Look For?
Across the wholesale network, short-term rental files are judged on a handful of numbers. Programs differ, so read these as typical ranges, subject to lender guidelines and not a commitment to lend.
| Factor | Short-term rental purchase | Short-term rental cash-out |
|---|---|---|
| Leverage | Up to 75% LTV | Up to 70% LTV |
| Coverage | 1.00 floor | 1.00 floor |
Standard programs run loan sizes up to $3,000,000. Above $2,500,000 the network generally holds to 30-year fixed structures. Reserves vary by lender, leverage, loan size and transaction type. Around six months of PITIA is common, and larger loans typically step up from there.
A bigger down payment lowers the payment and can lift the ratio. It never erases leverage caps, credit floors, reserve rules or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Coverage below 1.00 is a separate path. It is available through select lenders in the network, with leverage and terms adjusted. A higher ratio generally opens better pricing and leverage.
Not every property qualifies. Manufactured homes (single- and double-wide), log homes and barndominiums are not offered in the network’s DSCR programs. If your target Airbnb is a log cabin, plan around that early.
How Do You Stress-Test Both Properties?
Test the old property first, because it changes first. If the property earns seasonal income, or the lender haircuts it, the margin can shrink fast.
Run it this way. Take the property’s qualifying income, then divide it by the new, larger PITIA after cash-out. If the result sits near 1.00, you have little room. Then run the Airbnb on its own income method, with the expense factor applied.
Picture an owner of a lake-area cabin with a strong summer and a slow winter. The trailing 12 months clear 1.00 comfortably on paper. Once cash-out lifts the balance, coverage lands in the low-1.0x range. That owner can still proceed, but the file now depends on how the lender annualizes the seasonal swings.
One caution that trips up new investors: clearing 1.00 is not positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, furnishings and capex sit outside the calculation. A property can pass the lender’s test and still lose money after real operating costs.
Cash-out also has a cost drag. Closing costs reduce what you receive, and rolling costs into the loan raises the balance without adding cash. Net your proceeds before you budget the down payment.
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.
Where Does the General Rule Break?
Several situations bend the normal path. Know them before you apply.
Thin hosting history. A long-term rental recently converted to short-term use has little record. Programs vary. Some use long-term rent, and some want more history first.
Projections versus reality. A projection describes a typical property, not yours, and lenders often discount it. Projection tools may be easier to use on a purchase than on a refinance.
Multi-unit short-term rentals. The appraisal form changes, and income documentation gets heavier.
The out-of-market purchase. This is an easy edge case to underrate. Short-term rental rules can vary by city, county, HOA and property type, so confirm local rules before relying on projected rental income. In a market you do not live in, you have less feel for what is allowed. Verify the local rules before you pull cash out, not after.
Entity ownership. Business-purpose DSCR loans often allow vesting in an LLC, subject to lender program eligibility. Setting up and registering an entity in the new state is a separate step to plan with your attorney.
Sub-1.00 coverage. If either property falls short of 1.00 on its documented income, a select-lender path exists with leverage and terms adjusted. It is a different program, not a lower floor on the standard one.
What Are the Alternatives to Cash-Out?
Cash-out is not the only way to fund a down payment. The right choice depends on the cash you need and what you want to keep.
| Option | What it does | Best fit |
|---|---|---|
| DSCR cash-out refinance | Replaces the loan, pays you the difference | Owners with equity who want to keep the asset |
| Sale of the property | Converts equity to cash, ends ownership | Owners ready to exit that asset |
| Savings or other capital | No new loan on the old property | Owners with idle cash |
| Larger down payment on the new loan | Lowers the new payment | Files that need more coverage |
Cash-out keeps the asset and its income. A sale does not. The CFPB’s cash-out research looked at consumer borrowers, not DSCR loans, but its general point carries over: how you use the proceeds decides whether the loan was worth it.
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.
How Do You Pick a Provider Without a Ranking?
Judge fit with a short list of questions. A direct lender shows you one set of guidelines. A broker shows you several. Neither is automatically better, but the matching process differs.
Ask these of any provider:
- Does the program count short-term rental income on hosting history, a projection, or appraiser rent?
- What expense factor is applied to gross income, if any?
- What LTV applies to short-term rental cash-out versus a standard rental?
- Can the same provider handle both the refinance and the purchase?
- What seasoning is expected before a refinance?
- What are the reserve expectations, and which assets count?
- Are there prepayment terms, and what do they cost if you sell early?
- Does the provider lend in the state of the new property?
That last one matters more than it looks. The property’s state controls the purchase file, not your home state. A broker that works across 41 markets, including Washington, D.C., can check that footprint for you. Lendmire arranges DSCR investor loans through select lenders in its wholesale network, so the lender is matched after the scenario is clear.
What Should You Prepare Before You Apply?
Preparation shortens the back-and-forth, so gather the file first.
- Platform payout reports, management statements or bank deposits covering your hosting history.
- Your current loan statement, insurance declarations and tax bill for the property you will refinance.
- Proof of reserves, with the source of any large deposits documented.
- Entity documents, if you hold title in an LLC.
- A shortlist of target properties in the new market, with the local short-term rental rules confirmed.
- A clear number for how much cash you need, net of closing costs.
Sequence matters. Confirm the target market’s rules, then size the cash need, then start the refinance. Buying the Airbnb comes last, and only once the proceeds are in hand and traceable.
Frequently Asked Questions
Can I use cash-out proceeds from one rental to buy an Airbnb elsewhere?
Yes, the two loans are independent. The refinance produces cash, and you can use it as the down payment and reserves on a purchase in another market.
What leverage applies to a short-term rental cash-out?
Short-term rental cash-out typically tops out around 70% LTV in the network, while a standard long-term rental cash-out reaches about 75%. A short-term rental purchase goes up to 75% on the strongest files. These are typical ranges, not promises.
Do I need hosting history to buy an Airbnb with a DSCR loan?
Short-term rental files typically expect about 12 months of host experience. For a purchase with no history on that property, lenders may rely on a market projection or on appraiser rent. The exact method varies by program.
Does my home state matter, or the new property’s state?
The new property’s state controls the purchase loan and its local rules. Your home state matters mainly for the property you refinance. Confirm that your provider lends where the Airbnb sits.
Does a 1.00 coverage ratio mean the Airbnb makes money?
No. A 1.00 ratio means income matches the housing payment on paper. Repairs, vacancy, management, utilities and furnishings are outside the calculation, so real cash flow can be lower.
If You Are Ready to Run the Numbers
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. You can also reach the team at 828-256-2183 or request a quote.
For an out-of-market Airbnb purchase, it makes sense to check the local rulebook alongside the loan terms.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. CFPB
2. 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: Top Super Jumbo DSCR Cash-Out Refinance Providers for a Foreign National Investor · Top DSCR Cash-Out Refinance Providers at the Highest LTV on a Rental · Top DSCR Cash-Out Refinance Providers While the Property Is Listed for Sale
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.