The Quick Read: An Airbnb DSCR loan lends the lowest of three limits: the leverage cap on appraised value, the amount the rental income can carry at a coverage ratio of at least 1.00, and the amount needed to pay off the old mortgage and fund the buyout. There is no fixed dollar figure. It is arithmetic on value, liens, the settlement split, and income the lender will accept.
- On short-term rental (STR) purchases, leverage tops out at 75% LTV. Refinance and cash-out top out at 70% LTV on STR collateral.
- Most STR files want a 640+ credit score and about 12 months of hosting history.
- Coverage is rent against the full payment (principal, interest, taxes, insurance, dues). A 1.00 floor applies on both purchase and refinance for STR files.
- Clearing 1.00 is not positive cash flow. Repairs, vacancy, management, and utilities sit outside the ratio.
- Loan sizes run up to $3,000,000 on standard programs, subject to lender guidelines.
A buyout file is a refinance with a settlement attached. The mechanics below show where the number lands and where it breaks.
Short-Term Rental Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 22, 2026
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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 22, 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.
How Does the Loan Amount Get Sized?
The loan is the lowest of three numbers. First, the LTV cap times appraised value. Second, the debt the rental income can support at the program’s coverage floor. Third, what the settlement actually needs: payoff plus buyout plus closing costs. Whichever is smallest sets the file.
Start with equity. Equity is value minus every lien on the property: first mortgage, second mortgage, HELOC. The buyout is usually half of that equity, though a 50/50 split is common, not required. DivorceNet walks through an example: a $250,000 mortgage against $250,000 of equity, split evenly, means a new loan of at least $375,000. That pays off $250,000 and hands the departing spouse $125,000. Those are the source’s illustrative figures, not program terms.
Now stack the tests against that structure.
| Test | What it measures | Typical failure |
|---|---|---|
| Leverage | Loan vs. appraised value | Buyout too large for equity |
| Coverage | Rental income vs. full payment | Thin income, big new loan |
| Settlement need | Payoff + buyout + costs | Loan cap below the need |
The decision rule is simple. High value and modest rent, and coverage binds first. High rent and thin equity, and leverage binds first. A big buyout on a lightly equitied house fails on LTV before the ratio is even tested.
Three Files, Expressed as Percentages and Ratios
Consider a passing file. An STR is appraised at a solid value, the existing mortgage sits well under 50% of it, and the buyout is half the equity. The combined payoff and buyout land comfortably under the 70% refinance ceiling on STR collateral. Qualifying income covers the new payment at roughly 1.2x. Both tests clear.
Now a coverage failure. Same value, same buyout, but the accepted income covers the new payment at about 0.9x. Leverage is fine; the income isn’t. The fixes are real but each costs something: a smaller buyout through an equity offset, extra cash in from other assets, or a different income basis the program accepts. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. It’s a separate path, not a loosened version of the standard one.
Last, a leverage failure. Rent is strong at 1.4x, but the old mortgage is large and equity is thin. Payoff plus buyout would push past 70% of value. The loan simply can’t be that big. Options: negotiate the buyout down, trade other assets for the house, or have the departing spouse take a note or deferred payment. Strong rent can’t cure a leverage cap.
Which Income Counts for a First-Time Host?
Most STR programs in the wholesale network expect about 12 months of hosting history. A true first-timer gets reviewed program by program. That’s the honest answer. Lendmire’s complete DSCR loans guide covers how coverage is built, and for STR files the income basis is the swing factor.
Three methods recur:
1. Documented platform income. Twelve months of payouts from the subject property. In a divorce, this matters: if the listing ran during the marriage, the record exists, but the account may be in the ex’s name. Get statements and payout history exported before the settlement hardens.
2. A third-party market projection. Used when there’s no operating history. Lenders typically trim projections rather than take them at face value, so expect a reduced number.
3. The appraiser’s long-term market rent (Form 1007). This reflects a lease, not nightly bookings. Class Valuation argues it produces an artificially low ratio on STRs. Some channels use only that number; others allow a variance.
Whichever method applies, underwriting uses the annual average. Peak summer months don’t qualify the file. And an inflated projection is a classic way to get a file kicked back.
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.
Why the Refinance Is Usually Required
A divorce decree doesn’t remove anyone from a mortgage. Until the loan is refinanced into one name, paid off, or assumed with a release, the departing spouse stays liable. If the keeping spouse can’t qualify alone, the buyout may not work.
That’s where DSCR helps. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines, so the keeping spouse’s drop from two paychecks to one matters less than it does on a conventional file. Credit, reserves, and title still get reviewed.
Closing mechanics follow a set order. The old joint loan is paid off, the buyout portion goes to the departing spouse, and a quitclaim deed moves title. Effective Agents describes that flow and flags how thin reserves get after legal fees and setting up two households. Reserves are a quiet file killer here. Across the network they commonly run around 6 months of PITIA, though they vary by lender, leverage, and loan size.
Sequence mistakes break files. Deed before loan, appraisal before the agreement is signed, a decree deadline that outruns the lender’s review. Get the settlement agreement in writing first, then order the appraisal.
Where the General Rule Breaks
The keeper lives there. DSCR loans are for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. If the keeping spouse will use the house as a primary residence, it doesn’t fit. The Airbnb has to be a rental.
Cash-out limits by state. DivorceNet notes some states, Texas among them, limit how much equity can be cashed out in a refinance. That can leave the refinancing spouse unable to borrow enough. Confirm with the lender and the family-law attorney before the settlement fixes a dollar buyout.
Extra cash to the keeper. The proceeds are meant to fund the buyout. Whether a file can carry additional cash depends on the program and the transaction classification.
An equity offset. If the departing spouse takes retirement accounts or other assets instead, the loan may be only a payoff. That makes the coverage test far easier. A California family-law firm calls the offset the most common approach in high-asset divorces.
Conventional contrast, briefly. Agency treatment can classify a divorce buyout as a limited cash-out refinance if the property was jointly owned at least 12 months and a written agreement exists, per a State Bar of Arizona family law newsletter. That’s conventional logic. DSCR seasoning and cash-out classification come from the program’s own guidelines. On cash-out files in the network, about 6 months of seasoning is the common expectation.
Ineligible property types. Manufactured homes, log homes, and barndominiums fall outside these programs.
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.
Key Terms Defined
DSCR (debt service coverage ratio): Monthly rental income divided by the full monthly housing payment.
PITIA: Principal, interest, taxes, insurance, and association dues, the payment the income must cover.
Buyout: The payment to the departing spouse for their share of the home’s equity.
Equity offset: Giving the departing spouse other assets in place of cash from the property.
Quitclaim deed: The document that moves the departing spouse off title.
Form 1007: The appraiser’s long-term market rent schedule for single-family homes.
What the Decision Looks Like in Practice
Run the three tests before the settlement number is final. Get a value opinion, tally every lien, and price the buyout against the 70% STR refinance ceiling. Then ask which income method the program accepts when there’s no host history. Then check credit against the 640 STR minimum and reserves against what’s left after legal fees.
A larger down payment or smaller loan lowers the payment and can lift coverage. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage. For a purchase rather than a buyout, STR leverage reaches 75% LTV. Select lenders in the network offer extended terms and interest-only periods, which can improve coverage on a thin file. Lendmire’s piece Seller Financing vs Airbnb DSCR Loan for a First-Time Host covers that alternative path. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Tax treatment varies; consult a qualified professional, and ask the attorney about how the settlement is structured.
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. Qualification is subject to lender guidelines and is not a commitment to lend.
Frequently Asked Questions
Can a first-time host with no hosting history get this loan?
It depends on the program. Many STR programs expect about 12 months of hosting history, so a true first-timer is reviewed case by case. A projected-income method may apply, usually with a trimmed number. If the listing already ran during the marriage, the existing payout record can help.
What credit score does an STR buyout refinance need?
STR files typically want 640 or higher. Stronger scores can open better leverage and pricing. Credit is only one test; equity, coverage, and reserves still apply, subject to lender guidelines.
How much of the home’s value can the new loan cover?
Up to about 70% LTV on STR refinance and cash-out files. The payoff, the buyout, and closing costs all have to fit under that cap. If they don’t, the buyout has to shrink or be funded another way. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Does passing the 1.00 coverage floor mean the Airbnb is profitable?
No. The ratio compares rent to the payment only. Repairs, vacancy, management fees, utilities, and capital expenses sit outside it, and STRs carry more of those than a long-term rental.
Will the decree take my ex off the mortgage?
No. Only a refinance, an assumption with a release, or a payoff does. Until then the departing spouse stays liable, which is why most buyouts run through a new loan.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 2026).
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References
2. Class Valuation: Form 1007 and Short-Term Rentals
3. Effective Agents: Divorce Buyout and Refinance Guide
4. State Bar of Arizona: Family Law News
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: DSCR Loan Sizing Limits for a Rehabber’s First Hard Money Payoff · Own Loan vs Portfolio DSCR Loan for Airbnbs in Three or More Markets · Fix and Flip Loan Requirements for an Airbnb With a DSCR Exit
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.