The Quick Read: A short-term rental cash-out refinance can pay off other debt at closing, but big banks that underwrite on personal income often do not fit the property. Most of these loans come through non-bank and portfolio lenders that qualify the file primarily on the property’s rental income covering the payment, subject to lender guidelines.
- On a short-term rental cash-out refinance, leverage typically tops out at 70% LTV.
- Short-term rental files usually expect a 640 credit score and about 12 months of hosting history.
- Coverage on a short-term rental refinance starts at 1.00 on select programs. Loans can run up to $3,000,000.
- Paying off rental or investment debt fits cleanly. Paying off personal debt depends on the lender and program.
Lendmire is a mortgage broker, not a lender. It arranges these loans through select lenders in its wholesale network, across 41 markets including Washington, D.C. The sections below show how the loan works, where it breaks, and how to decide.
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.
Which Banks Offer a Short-Term Rental Cash-Out Refinance?
Few big banks do. Large retail lenders mostly underwrite on your personal income, debt-to-income ratio, and tax returns. A short-term rental complicates that picture, because the income is seasonal and shows up as platform payouts instead of a lease.
The lenders that write this loan are mostly non-bank DSCR lenders and a limited set of portfolio lenders. A portfolio lender keeps loans on its own books and sets its own rules. Rather than counting institutions, it is more useful to sort by lender type:
| Lender type | Income used | STR friendliness |
|---|---|---|
| Big banks | Personal income, DTI | Often limited |
| Regional banks, credit unions | Personal income, often | Varies by institution |
| Portfolio lenders | Mixed, set in-house | Varies by institution |
| Non-bank DSCR lenders | Property rental income | Built for it |
The best program for your situation depends on your property type, credit profile, leverage need, and documents. A broker that shops several wholesale lenders can match the file to the program. You do not have to guess which door to knock on.
Key Terms Defined
DSCR (debt service coverage ratio): Monthly rent divided by the full monthly housing payment: principal, interest, taxes, insurance, and any HOA dues.
Cash-out refinance: A new loan that pays off the old one and hands you the leftover equity as cash or direct debt payoffs.
LTV (loan-to-value): The loan balance as a percentage of the appraised value.
Seasoning: The waiting period between buying a property and refinancing it. About six months is the common expectation for cash-out across the network.
Reserves: Liquid savings you hold after closing, usually counted in months of the full payment.
Non-QM: A loan that sits outside standard bank mortgage rules and is underwritten on its own program terms.
How Underwriting Treats the Loan, Step by Step
Step 1: The file is classified. If any cash comes back to you, it is a cash-out. If the loan only retires debt and costs, it is a rate-and-term refinance. That label sets the leverage cap.
Step 2: Seasoning is checked. Most programs in the network expect about six months since you took title. Some lenders waive it after a documented renovation.
Step 3: Short-term rental income is documented. On an operating rental, the lender wants a record of platform payouts and usually bank deposits. This is why programs ask for about 12 months of hosting history. Purchases without history may lean on a projection or an appraiser’s rent analysis, on some programs only.
Step 4: The appraisal sets value. Value drives LTV. The appraiser also gives a long-term rent opinion. On smaller properties that usually comes on a Fannie Mae rent schedule form (Form 1007 for one unit) or an income property report (Form 1025 for two to four units). DSCR loans are not agency loans, so those forms act as a conservative cross-check. They do not measure short-term rental income.
Step 5: Coverage is computed. The lender divides underwritten rent by the full payment. Many lenders trim gross short-term income before testing, and the trim varies by lender.
Step 6: The loan is sized at the lower of two limits. One limit is value: appraised value times the cash-out LTV cap. The other is coverage: the largest payment the rent supports. More cash means a bigger payment and thinner coverage.
Step 7: Debts are paid at closing. Payoffs for debts you are consolidating typically go straight from the title or escrow company to the creditors. The remainder, if any, comes to you.
Clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capex sit outside the calculation.
What Debt Can You Roll In?
Business and real-estate debt fits cleanly. Think of a hard-money or bridge loan, a rehab loan, or investment-property debt tied to the rental. These debts have the same purpose as the loan itself.
Personal debt is different. Credit cards, auto loans, and a personal-residence mortgage are the usual examples. Some programs allow payoffs like these and some do not. The answer depends on the lender, the program, and how the file states the purpose of the loan. Ask before you assume.
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 CFPB’s Regulation Z commentary treats credit to acquire, improve, or maintain a non-owner-occupied rental as business purpose. The same page notes that exempt credit can later be rewritten for consumer purposes, which is one more reason to keep the stated use of proceeds clean and consistent.
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.
What a Consolidation Looks Like in Ratios
Run the numbers on a short-term rental at the 70% cash-out cap. The existing mortgage equals 50% of appraised value. A bridge-loan payoff and closing costs take another 12% of value. That leaves roughly 8% of value as cash to you, which puts the loan at about 70% and right at the cap, with no cushion beneath it. (These percentages are modeled assumptions, not market data.) Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Now the coverage side. Before the consolidation, assume the property’s trimmed rental income covers the old payment at around 1.35x. Rolling the bridge debt into a larger note raises the payment. Coverage might drop to roughly 1.1x. That still clears a 1.00 floor, but the margin is thinner.
Push the same file to a bigger payoff and coverage can slip under 1.00. At that point the loan size has to shrink, or you look at a different structure. A lower loan balance lowers the payment and lifts coverage, yet it does not remove the leverage cap, the credit floor, the reserve rules, or the property eligibility requirements. The strongest files clear both tests: enough equity and enough rental coverage.
What Structures Exist?
Most files run on the 30-year fixed, which is the spine of the network’s programs. A few lenders in the network offer 40-year terms and interest-only periods, and ARM structures exist for investors who want them. Interest-only and longer terms can lift coverage because they lower the payment. They are available through select lenders, and each carries its own leverage and pricing terms.
Reserves vary by lender, leverage, loan size, and transaction type. Around six months of the full payment is common. Some programs let cash-out proceeds count toward reserves, which matters when the payoff eats most of the cash. Larger loans step up to higher reserve expectations.
If you want the full lay of the land on coverage, credit tiers, and property rules, the complete DSCR loans guide walks through each.
Where the General Rule Breaks
Cash buyers. If you paid cash for the property, some programs treat a refinance soon after as purchase-style financing. That depends on the lender, and the purchase usually must have been truly cash, with no lien on title.
Renovated properties. Some lenders waive or shorten seasoning when the rehab is documented as complete. Others size the loan at the lower of cost or value.
No hosting history. A few programs accept an appraiser’s or data provider’s projection. A projection does not authorize short-term rental use, though. 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. Permit and insurance proof can decide a file.
Coverage below 1.00. Programs below 1.00 are available through select lenders in the network, with leverage and terms adjusted. Expect lower leverage than a file that clears the floor.
Entity ownership. Loans to LLCs are common on investor files, subject to lender program eligibility. A file in your own name is also possible. The lender will want entity documents and, in many programs, a personal guaranty.
Owner-occupied or house-hack. If you live in the property, it is generally not a DSCR file.
Ineligible property types. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered through these programs.
Is This the Right Move for You?
It fits when the debt you want gone is secured by the rental or tied to it, the property has real hosting history, and coverage survives the bigger balance. It also fits when you want to swap a short, balloon-style loan for a fully amortizing note.
It fits poorly when the payoff is mostly unsecured personal debt and the property barely clears coverage. You would be converting debt with no collateral into debt secured by the property. If the rental struggles, your property is on the line.
Seasonality matters too. A trailing record that spans a slow stretch gives the lender a lower number than a peak-season snapshot. Time the application so the history reflects a full cycle.
What to Prepare
- Platform payout exports and bank deposits covering your hosting history
- Payoff statements for every debt you plan to retire
- Proof of insurance that covers short-term rental use
- Any required local permit or license, plus HOA rules if they apply
- Entity documents if the property sits in an LLC
- Statements showing your reserves after closing
Frequently Asked Questions
Do big banks offer short-term rental cash-out refinances?
Few do. Some offer them in limited cases, but most are built around personal income and standard rental leases, so the fit is often poor. Non-bank DSCR lenders, reached through a broker, are the more common route. They qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
How much cash can I take out of a short-term rental?
Leverage on a short-term rental cash-out refinance typically goes up to 70% LTV, versus around 75% on standard long-term rentals. The coverage test can cap the loan lower than the value test does. Loans run up to $3,000,000 on standard programs.
Can I pay off credit cards with the proceeds?
It depends on the lender and program. Business and real-estate debt tied to the rental is the cleanest use. Personal debt payoffs are allowed by some programs and not others, so confirm before you apply.
What credit score and track record do I need?
Short-term rental files typically want a 640 score and about 12 months of hosting history. Stronger credit generally supports better terms. Final eligibility depends on lender guidelines and property review.
Will consolidating hurt my coverage?
Usually it lowers it, because a bigger balance means a bigger payment. Run coverage on the new loan amount, not the old one, before you commit. The calculator on this site gives an illustrative estimate only.
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. Call 828-256-2183 or request a quote.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. 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
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: DSCR Cash-Out Refinance Requirements If You Still Owe SBA Debt · How to Qualify and Apply for a Short-Term Rental Cash-Out Refinance on a Home You Own · How to Close a Conventional Cash-Out Refinance on a Duplex Rental
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.