The Quick Read: The highest loan-to-value allowed on a short-term rental cash-out refinance is about 70% across the select programs in Lendmire’s wholesale network, versus roughly 75% on a standard long-term rental cash-out. The best program for your situation is the one where both your equity and your rental coverage clear the lender’s tests. Everything below is subject to lender guidelines and individual file review.
- On a short-term rental (STR) cash-out, leverage tops out around 70%. On an STR purchase, the ceiling is 75% on the strongest files.
- A stronger coverage ratio can improve pricing and terms, but it does not raise the cash-out ceiling.
- Your cash-out is sized by the smaller of two limits: a value limit and a coverage limit.
- Most STR programs expect a 640+ credit score, about 12 months of hosting history, and coverage of at least 1.00.
- The right program depends on property type, income history, credit, and how much cash you need. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Key Terms Defined
Loan-to-value (LTV) is the new loan balance divided by the property’s appraised value. At 70% LTV, the lender stops lending once the balance reaches 70% of value. Corporate Finance Institute lays out the same formula. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Cash-out refinance replaces your current mortgage with a larger one. The old loan is paid off, and the difference comes to you as cash.
DSCR (debt service coverage ratio) is the property’s income divided by its full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. AirDNA’s explainer walks through the formula for short-term rentals.
PITIA is shorthand for that full monthly obligation.
Seasoning is the waiting period between buying a property and refinancing it.
Haircut is the discount a lender applies to projected income before testing coverage.
DSCR Cash-Out Calculator
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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 Does “Highest LTV Allowed” Actually Mean Here?
It means the highest percentage of appraised value a lender will lend against, and on a short-term rental it is lower than on almost any other rental type. Across the programs Lendmire places files with, STR cash-out tops out around 70%. A standard long-term rental cash-out reaches about 75%.
Why the gap? Lenders see STR income as less predictable than a signed twelve-month lease. Nightly bookings swing with season, platform rankings, and local demand. So the lender keeps a bigger equity cushion.
Some borrowers hope a program exists that pushes STR cash-out to 80%, and that hope needs a correction. No hidden program lifts STR cash-out that high. The real work is choosing the program that fits your property, your income history, and how you document it. This is the kind of matching a broker does by comparing several wholesale lenders instead of one.
One more distinction matters. A rate-and-term refinance returns no cash to you. On an STR it also runs around 70% in the network. Once real cash comes back, the file is treated as a cash-out and the cash-out rules apply. Fannie Mae’s limited cash-out guidance shows the same principle on the agency side: cash beyond a small limit changes the loan’s classification. DSCR loans are not agency loans, so use that only as a contrast.
How Underwriting Sizes Your Loan, Step by Step
The lender runs two tests, and the smaller result wins. One test looks at value. The other looks at coverage. Here is the sequence on a typical STR file.
1. Property and legality screen. The property must be a non-owner-occupied investment. It must also be allowed to operate as an STR. 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.
2. Seasoning check. About six months of ownership from the recorded deed is the common expectation for a cash-out. Own it for less time and the loan is usually sized on your cost basis rather than the new appraised value.
3. Income evidence. Lenders establish STR income from trailing booking history or payouts, or from a third-party projection. Projections are often discounted more heavily than actual history. A long-term rent estimate from the appraiser can serve as a conservative fallback.
4. Appraisal. The appraisal sets value, which drives the LTV test. It does not prove your nightly income.
5. The two tests. The value test takes appraised value times the cash-out cap, which is about 70% for an STR. The coverage test divides the lender’s accepted income by the new full monthly obligation and checks it against the 1.00 floor. Whichever test gives the smaller loan sets your cash-out.
6. Credit, reserves, and closing. STR files typically want a 640+ score. Reserves vary by lender, leverage, loan size, and transaction type, and are commonly around six months of PITIA. Some programs count part of the cash-out proceeds toward that requirement.
Notice what step 5 implies. Pulling more cash raises the new balance, and a bigger balance raises the monthly obligation. That thins coverage. So the two tests pull against each other, and many borrowers hit the coverage limit before the value limit.
A Worked Example
Run this as a modeled scenario, not a market fact. Say you own an STR appraised at a level where your current loan sits at 50% of value. The 70% STR ceiling leaves up to 20% of value as room for cash and costs.
Now test coverage. Assume your accepted STR income covers today’s payment at about 1.45x. If you borrow up to the full 70%, the larger balance pushes coverage down to roughly 1.05x. That still clears the 1.00 floor, so the value test is the binding limit and you can use the full 20% room.
Change one input. Assume the lender discounts your income because you only have a short hosting record, and coverage at the 70% balance lands near 0.92x. Now coverage binds. The lender sizes a smaller loan that brings the ratio back to its floor, and you receive less cash than the value test alone would allow. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted, so this file may still have options.
The takeaway: always find out which limit binds before you plan around a cash-out number.
Which Structures Exist? A Side-by-Side View
Leverage depends on the transaction and the property type, not just the lender. This table summarizes typical ranges from select programs in Lendmire’s network, all subject to lender guidelines.
| Transaction | Property type | Typical max LTV |
|---|---|---|
| Purchase | Short-term rental | Up to 75% |
| Cash-out refinance | Short-term rental | Up to 70% |
| Rate-and-term refinance | Short-term rental | Around 70% |
| Cash-out refinance | Standard long-term rental | About 75% |
On loan size, standard programs run up to $3,000,000. Above $2,500,000 the network generally holds to 30-year fixed structures. The 30-year fixed is the spine of most files. Extended terms (40-year) and interest-only periods are available through select lenders in the network. Adjustable-rate structures exist for investors who want them.
Interest-only periods matter for STR files with thin coverage. They lower the early monthly obligation, which can lift the coverage ratio. They do not lift the LTV cap.
Where the General Rule Breaks
Most of the surprises come from edge cases. These are the ones that change the answer.
Short history or a new STR. A property converting from long-term rental to STR has no booking record. It is typically underwritten on long-term rent or an appraiser’s rent schedule. Some owners then refinance into an STR-specific loan after about 12 months of operating history, once the income is documented.
Delayed financing for cash buyers. If you paid cash for the property, you may refinance without waiting out seasoning. The loan is sized near your documented cost, capped by the usual cash-out LTV. The cash must be your own, in your name. A hard-money purchase rarely qualifies, because that purchase carried a lien from day one.
Rolled-in closing costs. Financing your costs enlarges the balance and the monthly obligation. That lowers coverage. On a thin-margin STR, it can be the difference between clearing 1.00 and missing it.
Seasonal properties. Apply after your trailing twelve months include one full peak season. Applying in the slow months with a partial record can understate what the property earns.
Multi-unit STRs. Two-to-four-unit properties use a different appraisal form and can raise extra documentation questions.
Property types the network does not offer. DSCR programs in the network do not cover manufactured homes (single- and double-wide), log homes, or barndominiums. That is a hard line, not a leverage adjustment.
Title held in an LLC. Many investors hold STRs in an entity, subject to lender program eligibility. Lenders usually want the entity documents, and the guarantor’s credit still counts.
Coverage below 1.00. A 1.00 ratio is the standard minimum, and it is where most programs start. A few select lenders in the network will consider coverage below that, with leverage and terms adjusted. Expect to bring more equity or accept a lower cap.
Why the Appraisal Can Hurt Your Income Case
Many investors assume the appraisal will prove their Airbnb income. It does not. It values the property and, at most, supplies a rent figure.
Fannie Mae’s appraiser update is a useful contrast on this point. It says Form 1007, the single-family rent schedule, was not designed for appraising homes used as STRs. It also says multiplying a nightly fee by 30 to get monthly rent is incorrect. That is an agency appraiser rule, and DSCR loans are not agency loans. But it shows why a rent schedule is a poor stand-in for hosting income.
So the lender decides income from your booking history or a third-party projection. If the appraiser adds an STR income narrative, its quality varies. Treat it as supporting evidence, not as the deciding number.
Is a Higher-LTV Program Always the Better Choice?
No. The best program for your situation is rarely the one with the biggest headline leverage number.
Think about what a few extra points of leverage costs you. More borrowed means a bigger monthly obligation and thinner coverage. It can also mean tighter reserve rules or different pricing. A lower-leverage loan with a stronger coverage ratio can come out ahead if your income is uneven.
When a broker compares wholesale programs, the useful questions go beyond LTV:
- Does the program require a prepayment penalty, and for how long?
- How does it treat your income: history, projection, or market rent?
- What reserves does it want at your leverage and loan size?
- Does it allow interest-only or an extended term if coverage is tight?
- How does it handle your property type and entity structure?
Programs differ on these points, and a lender that fits one borrower can be wrong for the next. Lendmire’s complete DSCR loans guide covers the full set of program basics if you want the broader picture.
Does Passing the Coverage Test Mean the Property Cash Flows?
No. A DSCR compares income to PITIA only. Repairs, vacancy, management fees, utilities, cleaning, and capital expenses all sit outside the calculation.
STR owners feel this more than long-term landlords. Turnover costs and platform fees are real. A property can clear 1.00 on paper and still leave thin cash after expenses. Before you pull equity, run your own full operating budget. The lender’s test tells you whether the loan can be placed. It does not tell you whether the deal is good.
What to Prepare Before You Apply
- Platform payout history or booking reports covering your hosting record, ideally twelve months or more.
- Evidence that the property can legally operate as an STR where it sits.
- Entity documents, if title is in an LLC, plus proof of insurance.
- Your current mortgage statement and a view of your equity position.
- A plan for reserves, since lender requirements differ.
- Your credit profile. STR programs expect a minimum credit score of 640, and higher scores generally open stronger tiers.
A DSCR loan qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. You still supply an appraisal, platform history, and entity and insurance documents.
For an angle on seasoning, see Lendmire’s piece Best Short-Term Rental Cash-Out Refinance Program With No Title Seasoning at All.
Putting It to Work
Start with your numbers. Work out your likely value, the balance you owe, and your accepted income. Then see which test binds: the value cap near 70% on an STR cash-out, or the coverage floor. That tells you whether more equity or stronger income would move your cash-out.
Many investors use proceeds toward the next purchase. That works best when the new loan leaves comfortable coverage on the property you are refinancing. DSCR underwriting tests each property against its own payment, so one strong rental does not rescue a weak one.
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 mortgage broker, Lendmire arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Lendmire’s calculator offers an illustrative estimate you can edit as you test scenarios. This is not a commitment to lend.
Frequently Asked Questions
What is the highest LTV on a short-term rental cash-out refinance?
About 70% across the select programs in Lendmire’s wholesale network on a short-term rental cash-out. Standard long-term rentals reach about 75% on a cash-out. A better coverage ratio can improve pricing and terms, but it does not raise that STR ceiling. Every file is underwritten individually.
Can I cash-out refinance an Airbnb with no booking history?
Sometimes, but the income is usually tested differently. Without history, many lenders fall back to long-term rent or an appraiser’s rent schedule. STR programs typically expect about 12 months of hosting history. Some owners operate for a year, then refinance into an STR-specific loan.
What credit score do I need?
STR programs typically want 640 or higher. Across the network, a 620 floor exists in parts, most programs want around 660, and 700+ opens the strongest leverage tiers. Leverage, loan size, and property type all shift the requirement.
Do I have to wait before I can pull cash out?
Usually about six months from the recorded deed. Delayed financing for cash buyers can reduce that wait, sizing the loan near your documented cost. Seasoning rules differ by lender, so ask before you assume.
How is my cash-out amount actually calculated?
Take appraised value times the cash-out cap, and subtract your payoff and costs. Then test coverage on the larger balance against the 1.00 floor. The smaller result becomes your limit. Reserves and rolled-in costs can reduce your net cash further.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Corporate Finance Institute: Loan to Value Ratio
2. AirDNA: Debt Service Coverage Ratio in Real Estate
3. Fannie Mae Selling Guide: Limited Cash-Out Refinance Transactions
4. Fannie Mae Appraiser Update
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 DSCR Cash-Out Refinance Providers to Replace a Short-Term Bridge Loan on a Rental · Banks That Offer a Short-Term Rental Cash-Out Refinance With No Income Verification
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.