The Quick Read: A vacant short-term rental can be considered for a cash-out refinance, but the file turns on what income evidence the lender accepts, not on the empty calendar itself. Select lenders in Lendmire’s wholesale network typically look for hosting history, an appraiser’s rent figure, or both.
- Cash-out on short-term-rental collateral typically tops out around 70% LTV, with a 640 credit score expected on most files.
- Lenders usually expect about 12 months of hosting experience, and coverage is typically tested at a 1.00 floor on refinances.
- “Vacant” means different things: between guests, between hosting periods, or never operated as a rental. Each is handled differently.
- DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property cash-flows.
- All terms are subject to lender guidelines and individual underwriting. This is not a commitment to lend.
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.
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What Does “Vacant” Mean to an Underwriter?
Vacant is not one condition. Underwriters sort it into three buckets, and the bucket drives the income evidence.
Between guests. The listing is live and the calendar shows bookings, but nobody is in the unit today. This is routine. Platform payout history and bank deposits carry the file.
Between hosting periods. The property operated as a short-term rental, then paused for a season, a repair, or a turnover. The question is whether the paused stretch breaks the history lenders want to see. Some programs accept a trailing twelve months with gaps. Others want the most recent months to show activity.
Never operated as a short-term rental. This is the hardest case for a cash-out. With no hosting records, the lender falls back to appraiser-estimated rent, which is usually a long-term figure. Some programs decline the cash-out in that spot.
How Underwriting Treats the Vacant Property, Step by Step
The formula does not change when a property sits empty. The evidence does. Here is the sequence a file moves through.
1. Property and occupancy screen. The loan is business-purpose, and the borrower cannot live in the property. DSCR loans are designed for non-owner-occupied investment properties, so they are reviewed differently from a standard owner-occupied mortgage.
2. Income determination. The lender picks one of three bases: trailing twelve-month platform income, a projection-based report for the address, or the appraiser’s market rent. Which one applies depends on the program and on what the file can document.
3. The appraisal. The appraiser estimates market rent on a rent schedule form. Fannie Mae’s appraiser guidance explains that form 1007 measures monthly market rent, so it cannot estimate nightly short-term income. That is a limit of the form, and it is why a rent schedule alone can understate a strong Airbnb performer. For a one-unit investment property that uses rental income to qualify, the Selling Guide’s appraisal forms section describes when that form is required. Those agency documents are cited only for the appraisal form names. They do not govern DSCR loans.
4. Coverage test. Monthly rent divided by PITIA (principal, interest, taxes, insurance, and any HOA dues). Select programs start at 1.00 on short-term-rental refinances. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage.
5. Leverage, credit, and reserves. On short-term-rental collateral, cash-out typically caps at 70% LTV. The credit floor is typically 640. Reserves vary by lender, leverage, and loan size, and are commonly around 6 months of PITIA.
6. Documents and title. The payoff statement, deed, entity papers, platform statements, and insurance. More on those below.
The mechanics of a cash-out itself are simple. The Corporate Finance Institute describes it this way: the old loan is paid off, a new larger loan replaces it, and the difference comes to the borrower in cash.
Decision Table: Vacancy Scenario to Income Method
| Scenario | Likely income basis | What the lender asks for |
|---|---|---|
| Live listing, empty tonight | Trailing 12-month payouts | Platform statements, bank deposits |
| Paused hosting, history exists | History or appraiser rent | Proof of prior operation, reason for pause |
| Never hosted, rent-ready | Appraiser market rent | Rent schedule, condition photos |
| Just rehabbed, bridge payoff | Appraiser market rent | Rate-and-term may fit better |
The pattern is simple. History supports a higher income figure. No history pushes the file toward the lower appraiser number.
Where the General Rule Breaks
Standard rental program versus short-term-rental program. A standard DSCR program does not use nightly-rate numbers. If the property’s value to you is its Airbnb income, the file needs a program built to use that income. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The appraisal form gap. Because the rent schedule is built for monthly rent, it can come in well below what the property earns nightly. On a vacant property, that gap can leave coverage looking thin.
Recent rehab or bridge payoff. A just-finished property may fit only a rate-and-term refinance first. Cash-out generally wants about 6 months of seasoning, and seasoning is lender policy, not law. A file that assumes seasoning away risks being returned by the lender.
Local rules. A permit gap, an HOA restriction, or a zoning limit can remove short-term income from the picture entirely. If the lender can’t count nightly income, the file reverts to market rent.
Multi-unit and pooled files. A vacant unit in a larger property is counted at market rent, not on a lease.
Ineligible property types. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs. A vacancy question never reaches those properties.
What Documents Make a Vacant File Clean
Documentation, more than the calendar, is where a vacant file can stall. The items that matter:
- Platform payout statements matched to bank deposits, so the income is traceable.
- The deed and entity documents. LLC borrowers are accepted subject to lender program eligibility.
- Any short-term rental permit or registration, plus HOA rules.
- The payoff statement for the existing loan.
- Insurance that fits a rental. Binder language matters for a vacant unit, so get the quote in before the file goes to the lender.
- Reserves documentation showing liquid funds, sourced and seasoned in the account.
- Utilities on, and the unit rent-ready for the appraiser.
An empty house with the water off and a stale insurance binder gives the appraiser and the processor reasons to stall. A rent-ready house with clean records gives them fewer.
Worked Example: A Vacant Property Between Hosting Periods
Run the numbers on a vacation-area rental with a purchase price of $450,000 and a hosting record that ran for well over a year before a three-month pause for repairs. Assume it appraises near that figure. At 70% LTV on a short-term-rental cash-out, the file sits at the program ceiling. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The coverage question is which income the lender uses. If the program accepts the trailing record and the platform income carries the property, coverage may land comfortably above 1.00. If the lender falls back to the appraiser’s monthly rent schedule, coverage may drop to borderline territory, near or under 1.00. Under 1.00, a lender may review a lower loan amount, or the borrower may wait until the recent months show activity again. Eligibility stays subject to credit approval and property review.
The takeaway: the same house can produce two different coverage numbers depending on which evidence the file leads with. Lead with the strongest documented one.
Does Passing 1.00 Mean the Property Cash-Flows?
No. DSCR compares rent to PITIA and nothing else. Repairs, vacancy, management, utilities, and capex sit outside the calculation. A vacant short-term rental has all of those costs and no income that month. Keep cash reserves for the empty stretches regardless of what the coverage number says.
The commercial DSCR formula is a different convention. Investor DSCR loans use rent divided by PITIA. Don’t mix the two benchmarks.
If the File Doesn’t Qualify Yet
Pick the gap, then fix that one thing.
- No hosting history. Run the property as a short-term rental for a stretch and keep the payout records. A program that expects about 12 months of host experience needs those records to exist.
- Seasoning short. Wait out the roughly 6-month expectation, or take a rate-and-term refinance now.
- Coverage thin. A smaller loan amount on the cash-out lowers the payment and can lift the ratio, but it never erases leverage caps, credit floors, or reserve rules.
- Credit below the floor. Pay down revolving balances and correct any reporting errors, then have the score re-pulled before the file goes back to the lender.
- Appraisal comes in light. Request reconsideration with in-neighborhood sales and condition documentation.
If the question is whether a short-term or long-term structure fits better, see Lendmire’s piece Short-Term Rental Cash-Out Refinance vs. Long-Term Rental Loan That Pays Off Debt.
Key Terms Defined
Vacant: The unit has no current guest or tenant. It matters only through the income evidence the lender can accept.
Seasoning: The ownership or loan period a lender expects before cash-out is available, commonly around 6 months.
Hosting history: Documented short-term rental income, usually platform payouts matched to bank deposits.
Coverage ratio (DSCR): Monthly rent divided by PITIA. Select programs start at 1.00.
Cash-out refinance: A new larger loan that pays off the old one and returns the difference as cash.
Rent schedule (form 1007): The appraiser’s estimate of monthly market rent.
Frequently Asked Questions
Can a vacant short-term rental get a cash-out refinance?
Sometimes. It depends on whether the property has hosting history and which income basis the program accepts. A unit that is between guests with a live listing is routine. A unit that never operated as a rental is the hardest case. Terms are subject to lender guidelines and individual underwriting.
What leverage applies to a short-term rental cash-out?
Typically up to 70% LTV on short-term-rental collateral, versus around 75% on standard long-term rentals across most of the network. Credit of 640 or higher is typically expected, and the coverage floor on refinances is 1.00 for select programs.
Does a gap in bookings break the hosting history?
It can, depending on the program. Some lenders accept a trailing twelve months that includes slow or paused stretches. Others want recent months to show activity. Documenting the reason for the pause, such as a repair, helps the file.
Is a lease required on a vacant property?
Not on a short-term rental, where platform history serves as the income evidence. For a vacant property with no history, the lender typically uses the appraiser’s market rent instead of a signed lease.
Can I qualify without traditional personal-income documentation?
DSCR files qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Some programs also ask about the borrower’s other documentation, and select no-ratio paths are generally limited to borrowers who already own a primary residence.
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. The complete DSCR loans guide covers the full program structure. Tax treatment varies; consult a qualified professional.
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 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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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. Fannie Mae Selling Guide B4-1.2-01: Appraisal Report Forms and Exhibits
3. Corporate Finance Institute: Cash Out Refinance
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 to Maximize Cash Out · 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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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.