The Quick Read: Actual income is the property’s own booking history, and a market projection is a modeled estimate built from nearby comparable listings. Across the wholesale network Lendmire works with, documented history is generally the stronger basis for an operating rental, while a projection is the practical route when no history exists yet. Which one fits depends on whether the property already has a track record, how well the documents reconcile, and how the select lender in the network treats each type of evidence.
- Actual income suits investors who own an operating Airbnb and can document about 12 months of hosting.
- A projection suits a first purchase or a long-term-rental conversion with no booking record.
- Programs discount both, so the coverage figure is almost never the raw figure.
- Clearing the coverage test is not the same as positive cash flow.
- Short-term rental rules vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income.
Side-by-Side
The table below shows how the two income bases compare on the points that decide a file. The right-hand column describes typical practice across the network, not a promise from any single lender.
Short-Term Rental Calculator
Run the STR numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your nightly rate, occupancy, taxes, and insurance for a more accurate picture.
Short-term rental income is documented with a 12-month history or a market data report. Program parameters update from Lendmire’s centralized guideline source.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Nightly rate, occupancy, taxes, and insurance are editable estimates. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
| Factor | Actual Income | Market Projection |
|---|---|---|
| Review basis | Trailing booking history | Modeled estimate or appraiser analysis |
| Typical documents | Payout reports, manager statements, bank deposits | Third-party report, appraisal STR analysis |
| Best fit | Operating rentals, refinances, cash-out | New purchases, conversions, thin history |
| Property types | One- to four-unit rentals that can lawfully operate | Same, subject to appraisal review |
| Entity vesting | LLC or personal name, per program | LLC or personal name, per program |
| Reserve expectations | Vary by lender, leverage, and loan size | Vary by lender, leverage, and loan size |
| Main risk | Documents that do not reconcile | Optimistic modeling |
Entity vesting works the same way under either basis. Loans to LLC-titled borrowers are available depending on program guidelines, and the income basis does not change that.
Reserves follow the loan rather than the income basis. They commonly run around six months of PITIA, and larger balances typically step up from there. Select conservative files at modest leverage can see them waived.
Why the Two Numbers Differ
Actual income records what guests paid. A projection estimates what similar listings nearby earned. The two rarely match, because a projection averages a comp set while a real property carries its own quirks.
AirDNA says its Rentalizer projections are modeled from the actual performance of the most similar nearby listings, adjusted for seasonality and property features. Its calculator page adds that comps come from Airbnb, Vrbo, and Booking.com. The tool also reports a Comp Set Strength score of Low, Medium, or High. That score matters, because a weak comp set means a shakier estimate.
Accuracy varies by property. Vault STR, an STR advisory firm, reports that independent tests put address-level estimates roughly 15–30% off actuals, usually on the high side. That is directional market commentary, not a standard. Across the network, short-term-rental files are reviewed at up to 75% LTV on a purchase and about 70% on a refinance, so the underwriting review focuses on documented and reconciled income, not the raw model output.
Several inputs drive the gap between a projection and actual results:
- Nightly rate. A projection uses comp averages. A real property may price above or below them.
- Occupancy. Models can lean on peak-season performance. Real calendars include slow months.
- Seasonality. A trailing twelve months captures every trough. A snapshot projection may not.
- Property quirks. Views, parking, layout, and reviews push one listing above or below its comps.
- Fees and platform mix. Cleaning fees, platform splits, and cancellations shape what actually reaches the bank.
Misses run in both directions. Some hosts find a projection undershoots their real results, and others find it overshoots. No one should treat a projection as a guarantee.
How a DSCR Lender Reads Each Path
The coverage test divides qualifying rental income by the full monthly obligation of principal, interest, taxes, insurance, and any HOA dues. For short-term rentals, lenders usually settle on one of three evidence paths. Our complete DSCR loans guide covers the formula in more depth.
1. Documented history. The lender reviews about 12 months of bookings and annualizes them to a monthly figure.
2. A projection or appraiser STR analysis. The lender reviews a modeled estimate, often with leverage and terms adjusted.
3. Long-term market rent. The lender falls back to the appraiser’s long-term rent when STR evidence is thin.
Lenders in the network differ on which path they accept. Some run all three, some run only history or long-term rent, and a few do not touch short-term rentals at all. Checking which behavior a target lender follows before going under contract is one of the most useful steps a buyer can take.
Programs also adjust the income itself. A lender may discount gross receipts or projections because short-term rentals carry higher operating costs than leases. The adjustment hits the income side, not the payment side, so the same revenue can produce different coverage under different programs.
The Appraisal Piece
Appraisers work from specific forms, and the forms shape the long-term-rent fallback. Fannie Mae’s published guidance, as hosted by the Nevada Real Estate Division, describes Form 1007 as the single-family comparable rent schedule. It documents monthly market rent for a one-unit investment property. That is agency contrast only, since DSCR loans are not agency products.
McKissock, an appraiser education provider, says Form 1025 covers two- to four-unit properties. It also notes that lenders make the final call on how any income source, including short-term rental income, is counted. The appraisal tells the lender what a comparable long-term tenant might pay. The lender decides what to do with it.
Class Valuation, an appraisal management firm, argues that Form 1007 was built for long-term rent only. It says short-term income is driven by nightly pricing, seasonality, cleaning, and management costs, so it does not fit that form well. Multiplying a nightly rate by 30 is a common shortcut, and it does not produce a reliable monthly rent.
When Actual Income Is the Better Fit
Actual income is the better fit when the property already has a record that you can document cleanly. It turns a modeled guess into proof. For refinances and cash-out files on operating rentals, history is the natural basis across the network.
Picture an investor who has hosted the same listing for about 14 months and wants to refinance. The file shows real seasonality, and the lender reviews the property on its own performance. Short-term-rental programs in the network commonly look for a credit score of 640 or higher and about 12 months of hosting experience. On this kind of file, refinance coverage starts at 1.00, and leverage on a short-term-rental refinance tops out around 70%. On a short-term-rental cash-out, the ceiling is also about 70%, always scoped to short-term-rental collateral.
History also helps when the property outperforms its comps. A strong listing may earn well above a modeled average. Documented bookings let the lender see that, where a projection would average it away.
The catch is reconciliation. Platform payouts, bank deposits, and tax totals rarely match on the first pass. Fees, refunds, and timing differences create gaps. Files with clean, matching records tend to move through review more smoothly than files with unexplained differences. Lendmire’s piece How to Refinance a Paid-Off Airbnb on Actual Income With a DSCR Loan walks through the documentation in detail.
Actual income is the wrong choice when the history is weak. A listing with a few months of bookings, a long vacancy gap, or a recent price change may not represent the property fairly. In that case a projection or a longer wait can serve the investor better.
When a Market Projection Is the Better Fit
A projection is the better fit when there is no history to document. A new purchase has no booking record. A long-term rental being converted to short-term use has none either. In those cases a modeled estimate or an appraiser’s STR analysis is often the only route to a coverage number.
Say an investor is buying a second home-sized property in a tourist corridor and plans to run it as an Airbnb from day one. No bookings exist, so the program reviews a projection, often with leverage and terms adjusted. Purchases on short-term-rental collateral typically start at a 1.00 coverage floor, with leverage reaching up to 75% LTV on the strongest files, subject to lender guidelines.
A projection also helps an investor screen a deal before making an offer. The investor can then haircut the figure personally before a lender ever does, which is a smart habit. If the coverage barely clears after a realistic discount, the margin is thin.
The weakness is optimism risk. A projection is a gross revenue estimate, and the property still has to deliver it. The risk of a miss falls on the buyer as well as the lender. A projection with a low Comp Set Strength score deserves extra skepticism.
Some investors avoid the problem by buying on a long-term basis and refinancing after building a hosting record. That route trades a weaker first-day basis for a stronger refinance later. It suits investors who can carry the property comfortably during the build-up period.
A Same-Property Walk-Through
Here is one hypothetical property run through three bases. The coverage ratios are illustrative, and they are not market data or a prediction for any real file.
| Income basis | Illustrative coverage | Read |
|---|---|---|
| Documented history, after program discount | About 1.25x | Clears the 1.00 floor with cushion |
| Projection, after program discount | About 1.10x | Clears, but with less margin |
| Long-term market rent fallback | About 0.90x | Falls below 1.00 on rent alone |
Notice what happened. The same property produced three different answers, depending on what the lender counted. History produced the strongest ratio because it reflects what guests actually paid. The projection came out lower because lenders discount modeled income more heavily.
The long-term fallback fell below 1.00. At that point, coverage of 1.00 is where many select programs start, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Those structures are reviewed by the lender, and eligibility review depends on credit approval, property review, and lender guidelines. The better question for an investor in that spot is usually whether a different income basis fits the property.
What to Do When the Numbers Disagree
The decision depends on which way the gap runs and how much history exists.
- Actuals above the projection. Push for the documented history to count. Clean records matter most here, because the file proves what the model understated.
- Actuals below the projection. Find out why. A new listing, a seasonal dip, or a pricing mistake each point to a different fix. Waiting for stronger months may help more than pressing a refinance now.
- Partial history. Some programs review a projection or long-term market rent when history is under 12 months, with leverage and terms adjusted.
- No history. Use a projection or appraiser analysis, and treat the result with caution.
- Recent conversion from long-term rental. Treat it as a no-history file, even if the property has a long lease record.
If both numbers exist and they differ, lenders generally favor the documented figure. The reason is simple. Proof of what happened carries more weight than a model of what might happen.
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.
Documenting Actual Income Well
Strong files tie every number back to a deposit. A short checklist keeps the work organized.
- Export platform payout reports for each of the 12 months.
- Match each payout to a bank deposit.
- Collect property-manager statements, if a manager runs the listing.
- Note any disrupted months, such as renovations, owner stays, or blocked calendars.
- Confirm that the property can lawfully operate as a short-term rental.
Seasonality needs care. Averaging peaks and troughs over a full year gives the fairest picture. Trimming slow months out of the story only invites questions. When buying an operating listing, ask the seller for the same documents, because a claimed figure means little without matching deposits.
Common Mistakes
Several errors show up again and again on short-term-rental files.
- Treating the projection as the qualifying income. Programs apply their own discounts and rules.
- Using Form 1007 as if it measured Airbnb income. It is a long-term rent schedule.
- Assuming a lender accepts short-term-rental income without confirming. Acceptance and documentation rules vary by lender and program.
- Modeling at peak occupancy and ignoring slow months.
- Treating a gross-revenue projection as profit.
That last point matters most. DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property cash flows, because repairs, vacancy, management, utilities, and capex all sit outside the calculation. A thin margin on a projection leaves almost no room for those costs.
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.
Key Terms Defined
Actual income: the revenue a property earned from real bookings, shown through payouts, statements, and deposits.
Market projection: a modeled estimate of revenue based on comparable nearby listings.
Form 1007: the appraiser’s comparable rent schedule for a one-unit property, built for long-term rent.
Qualifying income: the figure a lender actually divides by PITIA after any program discount.
PITIA: principal, interest, taxes, insurance, and any HOA dues.
Comp Set Strength: AirDNA’s Low, Medium, or High score showing how well the comparable listings support a projection.
The Balanced Verdict
Neither basis wins on every file. Actual income is the stronger evidence, and it fits investors with an operating property and clean records. A projection is a practical bridge for investors who are buying or converting and have no record yet. Choosing between them is mostly a question of timing and documentation, not of which number looks bigger.
Investors often get the best result by matching the basis to the stage. Buy on a projection with a realistic haircut, build history, and then refinance on actual income when the record supports it. Investors who cannot carry the property through that build-up period may prefer a conservative purchase basis from the start. The strongest files clear both tests, which are enough equity and enough rental coverage, and neither one erases the other.
Frequently Asked Questions
Do I need 12 months of history to use a DSCR loan on an Airbnb?
Not always. Short-term-rental programs in the network typically expect about 12 months of hosting experience. Without that, a select lender may review a projection or long-term market rent, with leverage and terms adjusted. The path depends on the lender and the file.
Which wins if my actual income and the projection disagree?
Documented income usually carries more weight, because it shows what the property really earned. If your actuals are lower, expect the lender to rely on them. If your actuals are higher, clean records give you the best chance of having that strength counted.
Can I refinance or take cash out using actual Airbnb income?
Yes, through programs that accept documented history. Short-term-rental refinances typically go up to 70% LTV, and cash-out on short-term-rental collateral also tops out around 70%. A credit score of 640 or higher is commonly expected, and every file is reviewed individually.
Does clearing 1.00 mean my Airbnb will make money?
No. The coverage test compares qualifying income to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside it, so a property can clear the ratio and still run thin on real cash flow.
Is the Rentalizer number the income a lender will use?
Not directly. Programs apply their own discounts and rules to modeled income. The projection is a starting point for your analysis, and the lender decides what to count.
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. Lendmire is a mortgage broker arranging DSCR financing through select lenders in its wholesale network, across 41 markets, including Washington, D.C. All program terms are subject to lender guidelines, and nothing here is a commitment to lend.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
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
3. Vault STR: Rentalizer accuracy
4. Fannie Mae short-term rental and Form 1007 guidance, hosted by the Nevada Real Estate Division
5. McKissock: Form 1007 and short-term rental appraisals
6. Class Valuation: why Form 1007 cannot be used for short-term rentals
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Finance an Airbnb Through an LLC With a DSCR Loan · Second Home vs DSCR Loan for a Cabin or Rural Airbnb · Preemption States vs Enforcement States for a DSCR Airbnb Loan
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
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- 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.