The Quick Read: The right provider is the one whose program fits your property, your hosting history, and how much equity you want out, so the best choice depends on your situation. Select lenders in Lendmire’s wholesale network write these loans, and their STR cash-out terms differ more on income counting and leverage than on anything else. A mortgage broker shops those programs for you and matches the file to the one that fits.
- Leverage is the first limit to know: short-term rental cash-out tops out around 70% LTV, while a standard long-term rental cash-out tops out around 75%.
- Expect a 640+ credit score and about 12 months of hosting history.
- Coverage starts at 1.00 on STR refinances in the programs we place, and the lender needs your income documented, not just estimated.
- Passing the coverage test does not mean the property makes money after cleaning, utilities, and vacancy. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
You will not find a ranked list of lenders below. Naming a “number one” lender would mean ignoring your credit, your leverage target, and your documents, and those drive the result. What follows is how these programs work, so you can judge any provider yourself.
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.
What Is a DSCR Cash-Out Refinance on an STR?
A DSCR cash-out refinance replaces your current mortgage with a larger new one and hands you the difference in cash. DSCR stands for debt service coverage ratio, which compares the property’s income to its monthly housing obligation. On an STR, lender review centers primarily on property-level rental income covering the payment, subject to lender guidelines.
The cash-out label applies any time money comes back to you. That is true even if you own the property free and clear. In that case there is simply no old loan to pay off.
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 ratio is simple. Monthly rental income divided by PITIA (principal, interest, taxes, insurance, and any association dues) gives your coverage number. A result of 1.00 means income equals the full obligation. For STRs, 1.00 is where the programs we place begin on refinances, and a stronger ratio can open better pricing and leverage.
Some select lenders in the network will look below 1.00 coverage, with leverage and terms adjusted. That is a separate path from the 1.00 programs, not a lower floor on the same one. A no-ratio structure also exists, but only through select lenders, generally for borrowers who already own a primary residence.
How Do You Evaluate a Provider?
Judge a provider on six things: the STR cash-out leverage cap, how it counts your income, the seasoning rule, entity and reserve requirements, the prepayment penalty, and how it appraises STR collateral. Interest cost matters too, but it lives in the calculator and the quote, not in this comparison. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Here is what each criterion means in practice.
- Leverage cap. STR collateral gets a lower ceiling than a standard rental. In the programs we place, STR cash-out runs up to 70% LTV, while standard rental cash-out runs up to about 75%.
- Income counting. Some programs average trailing platform income. Others haircut it or compare it to a market-data projection. Ask which one applies before you apply.
- Seasoning. This is the waiting period between buying a property and refinancing it. About 6 months is the common expectation across the network, but policy varies by lender.
- Entity and reserves. Many investors hold title in an LLC, subject to lender program eligibility. Reserves are cash left over after closing, commonly around 6 months of PITIA, though that varies by lender, leverage, loan size, and transaction type.
- Prepayment penalty. Many DSCR loans carry one. It is a fee for paying off the loan early, and it matters if you plan to sell or refinance again.
- Appraisal approach. Value and income are separate questions on an STR, which the next section explains.
Which Type of Provider Fits Which Investor?
Provider type shapes your options more than any single name does. A direct lender offers its own programs. A large retail lender usually focuses on owner-occupied loans. A broker compares many wholesale programs for one scenario.
| Provider type | Programs offered | Fit |
|---|---|---|
| Direct DSCR lender | One lender’s guidelines | Files that match that lender’s box |
| Large retail lender | Mostly owner-occupied | Rarely a match for STR cash-out |
| Wholesale broker | Many lenders, one application | Mixed credit, leverage, or STR history |
A broker fits best when your hosting history is short, your credit sits between tiers, or you want an extended term. Lendmire is a mortgage broker that arranges DSCR investor loans through select lenders in its wholesale network across 41 markets, including Washington, D.C. Lendmire does not lend or approve anything itself. The lenders review each file and make the credit decision.
How Does Underwriting Treat STR Income?
Underwriting treats STR income as its own evidence, separate from the appraisal. The appraisal sets value, which controls leverage. A separate STR income document supports the coverage test. A standard long-term rent schedule cannot do that second job.
This surprises many owners. Fannie Mae’s June 2024 Appraiser Update says Form 1007, the single-family rent schedule, documents monthly market rent for one-unit investment properties. It also says the form was not designed for short-term rentals and cannot estimate a nightly fee. Form 1025 plays the same role for two-to-four-unit properties, with monthly rent as its measure.
McKissock, an appraiser-education provider, makes the same point: Form 1007 records monthly rent, not nightly rates or business income. Class Valuation, an appraisal firm, adds that STR income depends on nightly pricing, seasonality, occupancy, and turnover costs. It names an STR projected-income analysis built on comparable STR data as the alternative.
So the sequence on your file looks like this:
1. Classify the deal. Any cash back to you makes it a cash-out.
2. Appraise the property. The appraised value times the STR leverage cap sets the value-based limit.
3. Document income. The cleanest evidence is about 12 months of platform earnings statements or property-manager statements. Some programs also look at bank deposits.
4. Adjust the income. Lenders often average or discount STR income before testing it, because nightly revenue swings with the season.
5. Test coverage. Counted income divided by PITIA must clear the program’s floor.
6. Size the loan. The loan is the lesser of the value-based limit and the income-based limit.
7. Check seasoning, title, entity, credit, and reserves.
Market-data projections from a provider such as AirDNA can support an income estimate when history is thin. Programs typically lean on them for purchases, where no history exists. On a refinance, the program we place expects about 12 months of hosting history, so your own statements carry the weight.
Where Does the Coverage Test Bind First?
On an STR cash-out, rent coverage often binds before LTV does. Every dollar you pull out enlarges the loan, which enlarges PITIA and lowers your coverage ratio. You can have plenty of equity and still fail the income test.
The CFPB’s home equity guide describes cash-out as taking a larger mortgage, using part of it to pay off the current one, and keeping the rest. It also notes the larger loan can raise the monthly payment and lengthen the payoff. That is the same dynamic the DSCR test measures.
Here is the proceeds logic without dollar amounts. Say the appraisal comes in at a value we will call V. At the 70% STR cash-out cap, the new loan can be up to 70% of V. If your current payoff equals 40% of V, the most you could pull out before closing costs and prepaids is the remaining 30% of V. Then the lender tests coverage on that larger loan. If counted STR income covers the new PITIA at 1.00 or better, the maximum may work. If it lands below, you take less cash, or look at a structure with a longer term or an interest-only period.
Taking less cash shrinks the new loan and lifts coverage, but it does not remove leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests, enough equity and enough rental coverage.
Which Structures and Loan Terms Exist?
The spine of the network is the 30-year fixed loan. Extended terms such as a 40-year schedule, and interest-only periods, are available through select lenders in the network. ARM structures exist for investors who want them.
Loan sizes run up to $3,000,000 on standard programs. 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, so the extended and interest-only options narrow on larger balances.
Credit expectations on STRs sit at 640 and up. Stronger scores can improve pricing and leverage tiers. Reserves, as noted, vary by lender, leverage, loan size, and transaction type. They are commonly around 6 months of PITIA, and larger loans can step up from there.
Some property types are simply not offered. Manufactured homes (single- and double-wide), log homes, and barndominiums fall outside these DSCR programs. If your STR is one of those, a DSCR cash-out is not on the table.
Where Does the General Rule Break Down?
A few situations bend the standard path, and each deserves a plain look before you apply.
Hosting history under 12 months. If you bought the property recently, you may not have the history a refinance program expects. Your options are to wait, or to ask a broker whether a select lender will consider an appraiser’s STR analysis or a market-data projection. Some programs use the lower of actual income or the projection.
Seasoning gaps. Policy varies by lender. If you finished a documented renovation and want to refinance on the new value, ask each program how it treats seasoning. If you bought with cash, ask whether a program allows you to borrow back against your purchase before the seasoning period ends. Where it does, proceeds are generally tied to what you paid rather than to a projected after-repair value.
Seasonal swings. A 12-month average smooths peak and off-season months. A statement pulled at the height of the season can overstate what a lender will count. Expect the underwriter to look at the full year.
Multi-unit properties. One-unit and two-to-four-unit properties use different appraisal forms, as noted above. Your appraiser and lender will confirm which applies.
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.
Entity titling. If the property sits in an LLC, subject to lender program eligibility, the entity documents, insurance, and reserve statements become part of the file. Funds that come from a different entity than the borrower can complicate things, so keep the paper trail clean.
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.
What Does Passing the Coverage Test Not Tell You?
It does not tell you the property is profitable. DSCR compares rent to PITIA and nothing else. Cleaning, platform fees, utilities, furnishing, repairs, vacancy, management, and capital expenses all sit outside the calculation.
A property can clear 1.00 and still lose money month to month. Run your own operating budget next to the lender’s coverage number. The lender’s test answers whether the loan is eligible. Your budget answers whether the loan is a good idea.
Commercial finance uses a different definition. There, DSCR means net operating income divided by debt service. DSCR loan underwriting for investors typically divides rental income by PITIA instead. If you read an article quoting a 1.25 to 1.50 benchmark, it is likely using the commercial version, and it does not set a floor for these programs.
Passing the test also leaves one cost out. A cash-out replaces your existing loan, so you give up its terms. Compare that loss against what the cash will earn.
What Should You Gather Before You Apply?
Put the file together before the first call, because documentation quality shapes how the lender counts your income.
- Twelve months of platform payout statements or property-manager statements
- The current mortgage statement and homeowners insurance declarations
- Entity documents, if the property sits in an LLC
- Proof of reserves in liquid accounts
- Any HOA or local permit paperwork that applies to hosting
- A record of renovations, if you plan to refinance on improved value
What Should You Ask a Provider on a First Call?
Bring the same short list to every conversation.
1. What is the maximum LTV on STR cash-out for this property type?
2. How do you count STR income: trailing average, haircut, or projection?
3. How much hosting history do you need, and what do you do with less?
4. What is your seasoning policy, and is there any exception for cash purchases or documented renovations?
5. What reserves do you want at my loan size and leverage?
6. Is there a prepayment penalty, and how is it structured?
7. Can I choose a longer term or an interest-only period?
A broker can put these questions to several lenders at once, which is the main practical advantage of that route. The best program for your situation depends on your property, credit profile, leverage need, and documentation. You can read more about how the pieces fit in Lendmire’s complete DSCR loans guide.
Key Terms Defined
DSCR (debt service coverage ratio): A ratio of the property’s rental income to its monthly housing obligation.
PITIA: Principal, interest, taxes, insurance, and any association dues, the full monthly obligation the lender tests rent against.
LTV (loan-to-value): The loan balance as a percentage of the appraised value.
Seasoning: The waiting period a lender wants between buying a property and refinancing it.
Hosting history: The record of bookings and income showing that the property has operated as a short-term rental.
No-ratio loan: A structure that does not test rental coverage, available only through select lenders and generally for borrowers who already own a primary residence.
Frequently Asked Questions
What LTV can I expect on a short-term rental cash-out?
On STR collateral, cash-out typically tops out around 70% LTV, while a standard long-term rental cash-out tops out around 75%. These are guideline ranges from select lenders in the network, and each file is underwritten individually. Your appraised value, credit score, and rental coverage can all pull the actual figure lower.
Do I need 12 months of hosting history?
Most STR refinance programs expect about 12 months of hosting history, documented with platform or manager statements. If you have less, ask a broker whether a select lender will consider an appraiser’s STR analysis or a market-data projection. Eligibility depends on the lender and the property.
Is a paid-off short-term rental still a cash-out?
Yes. Any cash returned to you makes the loan a cash-out refinance, even when there is no existing mortgage to pay off. The lender applies the cash-out leverage cap, and the seasoning and coverage tests still apply.
Does the property need to clear 1.00 coverage?
On STR refinances in the programs we place, 1.00 is where coverage starts, and stronger ratios can open better pricing and leverage. Select lenders in the network also have a separate path below 1.00, with leverage and terms adjusted. Passing the test does not mean the property cash-flows after operating costs.
Can I use an LLC?
Many investors close in an LLC, subject to lender program eligibility. Expect the lender to review entity documents, insurance, and reserve statements as part of the file.
If You Want 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. An illustrative calculator on the site can give you a rough sense of coverage before you talk to anyone.
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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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, June 2024
2. McKissock
4. CFPB: Using Home Equity guide
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 No Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.