The Quick Read: The best provider for you depends on your property, credit, hosting history, and how much cash you need to pull out. A mortgage broker that shops several wholesale DSCR lenders can match your file to the program that fits, subject to lender guidelines.
- Short-term-rental cash-outs typically top out at 70% loan-to-value, and a purchase of a short-term rental goes to 75% on the strongest files.
- Expect a 640 minimum credit score and about 12 months of hosting history.
- Coverage starts at 1.00 on both short-term-rental purchases and refinances in these programs.
- The cash-out raises your balance, so coverage on the old property falls.
- Providers differ on how they count Airbnb-style income, which is usually the deciding factor.
You will not find a ranked list of lender names here. A list like that would be a guess about your file. What follows is how these loans work, what separates one provider’s treatment from another’s, and how to size the cash so it actually funds the next purchase.
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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.
What Does a Short-Term Rental Cash-Out Refinance Do?
It replaces the loan on a property you already host with a larger one, and you keep the difference as cash. The classic use is a down payment on the next property. You pull equity from rental number one, then put it into rental number two.
Underwriting here runs on the property, not on your pay stubs. A DSCR loan, short for debt service coverage ratio, qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The complete DSCR loans guide covers the basics if the term is new to you.
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.
Key Terms Defined
Cash-out refinance: a new, larger loan that pays off the old one and hands you the leftover as cash. Any cash back makes it a cash-out, even a small amount.
DSCR: qualifying monthly income divided by the monthly housing payment. Above 1.00, the income covers the payment. Below 1.00, it does not.
PITIA: principal, interest, taxes, insurance, and any association dues. It is the full monthly housing obligation that the coverage test divides into.
Seasoning: the waiting period between buying a property and refinancing it. About six months is the common expectation for cash-out files across most of the network.
Hosting history: the record of bookings and payouts from the property as a short-term rental. It usually comes from platform statements and bank deposits.
LTV: loan-to-value, meaning the loan balance as a percentage of the property’s appraised value.
Who Provides These Loans, and How Do They Differ?
Four types of provider handle this, and each suits a different borrower. A broker that shops many wholesale DSCR lenders can compare treatment of short-term-rental income across all of them. A single direct lender gives you one set of rules. Large retail lenders tend to focus on documented personal income. Short-term hard-money lenders suit properties that are not yet stabilized.
| Provider type | Best for | Trade-off |
|---|---|---|
| Broker with wholesale network | Comparing several programs | Works through lenders, does not lend |
| Single direct DSCR lender | One known program | One set of rules only |
| Large retail lender | Strong personal-income files | Rental income is not the focus |
| Short-term hard-money lender | Properties still being stabilized | Usually a bridge, not a long-term loan |
Lendmire is a mortgage broker. It arranges DSCR investor loans through select lenders in its wholesale network and does not lend or approve anything itself. That shapes what follows: this is how the lenders in that network treat these files, not a recommendation of any one company.
How Do Providers Count Short-Term Rental Income?
Lenders use one of three income bases. Which one applies depends on the program:
1. Documented hosting history. Platform payouts and bank deposits over a trailing window, typically about 12 months.
2. A third-party income projection. A market-data estimate for the specific property, more common on purchases where no history exists.
3. An appraiser’s short-term-rental income analysis. A written projection attached to the appraisal.
What does not work is the standard rent schedule. Fannie Mae’s appraiser guidance states that Form 1007 was not designed for appraising single-family properties used as short-term rentals. The form asks for monthly market rent, which means comparing homes leased monthly. The same guidance calls it incorrect to take a nightly fee and multiply it by 30. DSCR loans are not agency products, so this is about what the form measures, not about program rules.
McKissock, an appraiser-education publisher, adds that the form documents monthly rent while the lender makes the final call on income. HousingWire reports that nightly pricing, seasonality, event spikes, and cleaning costs cannot be reported on that form. It also notes that the coming UAD 3.6 appraisal standard will retire Form 1007, with narrative addenda staying essential for supporting short-term-rental income.
The practical lesson: if a lender leans on the monthly rent schedule alone, a strong Airbnb can look weak. Class Valuation, an appraisal management company, says that reliance often produces an artificially low DSCR. A good fit is a program that counts your actual hosting income.
How Underwriting Treats the File, Step by Step
Step 1: The lender picks the income basis. It uses hosting history, a projection, or an appraiser’s analysis, depending on the program. Some programs discount short-term-rental income before testing it.
Step 2: The coverage test runs on the new balance. Qualifying income is divided by the payment on the larger loan. On a short-term-rental refinance the floor is 1.00. Stronger ratios open better pricing and leverage.
Step 3: The appraisal sets value. Value drives leverage, but it does not prove nightly income. A two-to-four-unit property uses Form 1025, an operating income statement, instead of the single-family rent form.
Step 4: The loan is sized. Three limits apply, and the lowest one binds: the leverage cap, the coverage test, and the seasoning or value basis. On short-term-rental cash-outs the leverage cap is 70% LTV. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Step 5: Credit, reserves, and property eligibility are checked. The minimum score for short-term-rental files is 640, and most programs want higher. Reserves vary by lender, leverage, loan size, and transaction type, commonly around six months of PITIA. Conservative rate-term files at modest leverage under $1,500,000 can see reserves waived, while larger loans step up to around nine months.
Step 6: The file closes and the proceeds go to work. The cash typically becomes the down payment on the next property. Holding title in an LLC is common, subject to lender program eligibility.
A Worked Example: From Equity to the Next Down Payment
These are modeled assumptions, not market data. Say you own a short-term rental with a balance equal to 50% of its appraised value. The 70% cash-out ceiling for short-term-rental collateral means up to 20 points of that value are available to pull out, before closing costs and reserves. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Now test coverage. Assume the property covers its current payment at about 1.5x. Raise the balance from 50% to 70% of value and the payment rises by roughly 40% on similar terms. Coverage drops to about 1.07x. It still clears 1.00 but with little cushion.
Push the cash-out to the cap, and the file may clear the leverage test while thinning the coverage test. The strongest files clear both tests: enough equity and enough rental coverage.
Next, the purchase. A short-term-rental purchase goes up to 75% LTV on the strongest files, which means 25% down. If the new property has a similar value to the old one, the 20 points of cash-out in this example cover most of that down payment, leaving about 5 points to come from you. The cash-out does not cover closing costs or reserves. A smaller cash-out, or a purchase at the 75% tier with a bit more cash from you, can fix the gap. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Clearing 1.00 is not the same as positive cash flow. The DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation, and a larger balance can leave little room once you add them.
Where the General Rule Breaks
Little or no hosting history. A lender may fall back on market rent, and coverage can fail even when bookings look strong. Options include a smaller cash-out or waiting until the property has about 12 months of history.
Seasonal markets. A trailing window that misses peak season can understate income. Applying after one full peak season tends to show the property fairly.
Multi-unit short-term rentals. A two-to-four-unit property uses a different appraisal form, and the income analysis follows the units.
Cost-basis refinances after a hard-money or BRRRR (buy, rehab, rent, refinance) exit. Some programs treat a refinance that does not exceed your total cost basis as rate-and-term instead of cash-out. Not every program does, so ask before you assume.
Mixed portfolios. On a blanket loan, the short-term rental may be capped, carved out, or tested separately.
Local rules. 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.
Property types. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered through these programs.
What If the File Falls Short?
Start by pulling less cash. Cutting the cash-out raises coverage and lowers leverage at the same time. Waiting until the property has built more hosting history is another path, since lenders usually expect about 12 months.
Coverage below 1.00 is a separate route. Select programs start at 1.00, and a distinct select-lender path takes coverage below that, with leverage and terms adjusted. Expect lower leverage and different terms on that path.
Term structure can also help. The 30-year fixed is the spine of the network. Extended terms, such as 40-year, and interest-only periods are available through select lenders in the network. ARM structures also exist. Above $2,500,000 the network generally holds to 30-year fixed structures.
More down payment never erases leverage caps, credit floors, reserve rules, or property eligibility. It only helps the coverage side.
How Do You Choose Short-Term Rental Cash-Out Refinance Providers?
The lenders that write this loan differ on a handful of points, and the best program for your situation depends on how your file lines up with them. Ask each of these questions:
- How is short-term-rental income counted, and is it discounted?
- Does the lender use a monthly rent schedule, a projection, or an income analysis?
- How much hosting history does it require?
- What is the seasoning rule, and is there an exception for documented cash buyers?
- What is the leverage cap for short-term-rental collateral on a cash-out?
- What are the credit and reserve expectations at your loan size?
Standard programs run from roughly $100,000 up to $3,000,000, and balances below that range route through select lenders in the network. Because a broker sees many programs side by side, it can match the scenario instead of forcing one lender’s rules onto your property.
Timing the Refinance Around the Purchase
Order matters. Refinancing first, then shopping, is a common sequence. Once the cash is in hand, you can make a cleaner offer on the next property.
Also check the prepayment terms on the existing loan before you refinance. A penalty on the old loan changes how much cash the move actually nets.
Frequently Asked Questions
Can projected income qualify me on a refinance?
Usually not. Refinances rely on documented hosting history, typically about 12 months. Projections are more common on purchases where no history exists.
How much can I take out on a short-term rental?
Short-term-rental cash-outs go up to 70% LTV on the strongest files. Standard long-term rentals reach 75% on a cash-out. Coverage can bind before leverage does, which means the final amount may land lower. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Does the property need to be in an LLC?
No. Many investors choose an LLC for the next purchase, subject to lender program eligibility. Ask the lender how it handles vesting before you apply.
Will my personal income be reviewed?
The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Credit score and reserves still apply. A 640 score is the short-term-rental minimum, with most programs wanting higher.
Is a DSCR of 1.25 always required?
No. Generic explainers cite higher benchmarks borrowed from commercial lending. In these programs, 1.00 is the starting point for short-term-rental purchases and refinances alike, and stronger ratios improve pricing and leverage.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker arranging DSCR investor loans through select lenders in its wholesale network, across 41 markets, including Washington, D.C. It does not lend, fund, or approve loans. Every file is underwritten individually by the lender, and programs change. 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
3. 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: Top Short-Term Rental Cash-Out Refinance Providers With a Living Trust · Best Short-Term Rental Cash-Out Refinance Program to Build a Rental Property Portfolio · Top DSCR Cash-Out Refinance Providers on a Property With Unpermitted Work
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.