The Quick Read: The best program is the one whose income treatment, leverage cap, and seasoning rule fit your property’s actual history, and that depends on your situation. On short-term-rental collateral, cash-out typically tops out around 70% LTV, and the loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
- Cash-out on a short-term rental (STR) typically runs up to 70% LTV. Standard long-term rentals reach about 75%.
- Expect a credit score of roughly 640 or higher and about 12 months of hosting history.
- Coverage of 1.00 is where the STR refinance programs start. It is a floor, not a target.
- Your cash is sized by the smaller of two tests: equity and rental coverage.
- Ownership time and hosting history are separate clocks. Clearing one does not clear the other.
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.
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 Oct 29, 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 Oct 29, 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 Is a Short-Term Rental Cash-Out Refinance?
It is a new DSCR loan that replaces your current loan on an Airbnb or VRBO property and is larger than the payoff. You keep the difference. That difference is the equity you can turn into the next down payment.
DSCR stands for debt service coverage ratio. It compares the property’s rent to its monthly payment of principal, interest, taxes, insurance, and any HOA dues (together called PITIA). The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your W-2s and personal debt-to-income ratio are not the center of the file.
These are non-QM loans. That just means they sit outside the standard “Qualified Mortgage” box, as the CFPB’s explanation of Qualified Mortgages lays out. It is also why the usual agency selling guides do not govern them. 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 loop is simple: refinance the property you own, take the cash, and use it as the down payment on the next one. Everything below is about how much cash that loop really yields.
Who Fits This Program, and Who Should Look Elsewhere?
You fit when you own an STR with real equity, have a documented hosting track record, and want to buy another property without being limited by personal income. You fit less well when the property was converted from a long-term rental only a few months ago, when the income is mostly projection, or when the refinance would leave coverage razor-thin.
Across our wholesale network, the STR programs look for a handful of things:
- A credit score of about 640 or higher. Stronger scores help with pricing and leverage.
- Roughly 12 months of host or landlord experience.
- A coverage ratio of at least 1.00 on a refinance.
- Cash-out leverage up to about 70% LTV on STR collateral.
- Loan sizes up to $3,000,000 on standard programs. Smaller balances route through select lenders in the network. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
These are typical ranges, not promises. Every file is underwritten individually, and programs change.
Some property types are not offered at all. Manufactured homes (single- and double-wide), log homes, and barndominiums fall outside these DSCR programs.
How Does the Lender Count Your Short-Term Rental Income?
This is the step that moves your loan amount more than anything else. A lender decides how to treat STR income, and the method it picks changes the DSCR.
Many people assume the appraiser’s rent schedule, Form 1007, captures Airbnb income. It does not. HousingWire reports that Form 1007 was designed only to estimate long-term monthly market rent, and that using it for STR income can produce artificially low coverage ratios. The same piece notes that a newer appraisal format is slated to retire the legacy forms, including 1007.
Agency guidance reaches the same place from another angle. Fannie Mae’s STR material, reproduced in a Nevada Real Estate Division board packet, says how to categorize STR income is the lender’s decision. A lender can treat it as business income or as rental income, and the rental path calls for the 1007. That is agency material, shown here only for contrast. Your DSCR file follows the program’s own rules.
In practice, the programs we place files with draw on a few kinds of evidence:
- Platform payout history from Airbnb or VRBO.
- A property-manager statement.
- Bank deposits that tie back to the payouts.
- An appraiser’s STR income analysis built on comparable STR data.
Which one a lender accepts varies by program. Many lenders then count only a discounted share of gross STR revenue, and some use the lower of your trailing income and the appraiser’s market rent figure. Multi-unit STRs (two to four units) use a different appraisal exhibit, Form 1025, which folds the rent analysis in.
This is why two investors with the same equity can walk away with different cash. The income method, not the equity, often decides who gets more.
How Much Cash Will You Actually Net?
You net the smaller of two numbers: what the leverage cap allows, and what rental coverage supports. Then costs, payoff, and reserves come off the top. The size of the check is rarely the equity figure you started with.
Walk through it in order:
1. Value. The appraiser sets the value. On a recent purchase or conversion, cash-out can size on your cost instead.
2. Leverage test. Multiply value by the cash-out LTV cap. On STR collateral that is typically up to 70%.
3. Coverage test. As the loan grows, the payment grows and the DSCR thins. If coverage falls below the program’s 1.00 floor, the loan shrinks until it clears.
4. Subtract the payoff. Your existing balance comes out first.
5. Subtract costs and reserves. Closing costs, any prepayment penalty on the old loan, and required reserves reduce the usable cash. Reserves vary by lender, leverage, loan size, and transaction type. About 6 months of PITIA is common.
6. What is left is your down payment money.
Here is a worked picture with no dollar math. Say a property appraises well and the 70% cap leaves plenty of room. The rent, after the lender’s income discount, covers the new payment at only about 1.05x. Coverage is the binding test, not equity. A higher appraisal would not have helped.
Now flip it. A property with strong coverage of roughly 1.4x but modest equity is capped by leverage. Same loan type, different bottleneck. Know which test binds on your file before you plan the purchase.
One more point on the cash-out. Clearing 1.00 is not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation.
How Do You Size the Down Payment It Funds?
Work backward from the property you want to buy. Start with the target price and the leverage on the purchase, then see how much cash that implies.
On a purchase, most programs in the network land at 75%-80% LTV, which means 20%-25% down. Select high-leverage programs reach 85% LTV (15% down) with roughly a 700+ score. If the next property is itself an STR, purchase leverage tops out at 75%, so plan for at least 25% down plus closing costs and reserves on the new loan.
Do not plan around the maximum cash-out. The next lender will want reserves on the new file too, and a thin cushion on the property you keep can hurt in a slow season. The calculator on this page gives an illustrative estimate of how the numbers could stack up, but it is not a quote. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
A larger down payment lowers the new loan’s payment and can lift its DSCR. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
How Long Do You Have to Wait? Seasoning and Hosting History
Seasoning is the waiting period a lender wants between two events, usually between buying a property and refinancing it. For cash-out, about 6 months is the common expectation across the network.
STR files add a second clock. Ownership time and hosting history are separate tests. You could own a property for a year and still lack a documented hosting record if you ran it as a long-term rental until recently.
| Situation | What the lender looks at |
|---|---|
| Seasoned STR, long hosting record | Platform history and ownership time |
| Recent purchase | Often cost basis, not appraised value |
| Just converted from long-term rental | Hosting history may fall short at about 12 months |
| Documented cash buyer | Delayed financing may apply |
Delayed financing is a narrow exception for documented cash purchases. Proceeds are generally capped near your documented cost, not an after-repair value. If you bought with hard money and are exiting through a refinance, remember that any cash coming back is a cash-out. The seasoning clock generally starts when the deed records.
Where the General Rule Breaks
Most of the surprises fall into a handful of edge cases.
- No STR history yet. Some programs fall back to the long-term market rent from the appraiser, which can understate the property. Others accept an income projection on a purchase, but a refinance usually wants actual history.
- Newly converted rentals. Expect lenders to either want the 12 months, use market rent, or trim the cash-out.
- Former primary or second home. The property must be genuinely non-owner-occupied to be priced as an investment.
- Entity mismatch. If you borrow in an LLC, the entity that holds the funds and the entity on the loan should line up, subject to lender program eligibility. A mismatch can stall a file late.
- Thin comparable data. STR comps are scarce in some areas, and your coverage number may not be final until the appraisal comes back.
- Sub-1.00 coverage. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. That is a different path from the standard STR refinance programs, which start at 1.00.
Interest-only periods and extended terms such as 40-year amortization are available through select lenders in the network. They can lift coverage on a thin file. The spine of the network is the 30-year fixed, and above $2,500,000 it generally holds to 30-year fixed structures.
What the Cash-Out Does to the Property You Keep
It raises the payment on that property and lowers its cushion. That is the cost of the equity.
STR income swings by season. A property that clears coverage comfortably in peak months can look tight in the off-season, and a higher payment narrows the gap. Lenders look at trailing income, but your own cash flow lives in the real months. Take less than the maximum if the margin is slim.
If your main goal is to keep the portfolio growing, remember that a DSCR test is per property. Your personal debt-to-income ratio does not cap the number of rentals you can finance, so a growing portfolio is not blocked by it. The risk to watch is stacking thin-coverage properties on top of each other.
Cash-Out Versus Other Routes
Cash-out is not the only way to fund a down payment, and it is not always the best one. The route that fits depends on the property, the history, and your timeline.
| Route | Best fit | Watch for |
|---|---|---|
| STR cash-out refinance | Seasoned STR with real equity | Lower leverage cap, 12-month history |
| Delayed financing | Cash buyer who just closed | Proceeds capped near cost |
| Cash-out on a long-term rental | Property already on a standard lease | Cap near 75% LTV, not STR income |
| Rate-and-term refinance | No cash needed, better terms | No proceeds for the next purchase |
Notice what is missing: a ranking of lenders. Your best fit depends on the property, your credit, your documents, and how much leverage you need. A broker that shops multiple wholesale lenders can match the scenario to the program.
A Pre-Flight Checklist Before You Apply
Do these things well before you apply, because history and seasoning cannot be rushed:
- Gather 12 months of platform payout statements and match them to bank deposits.
- Confirm your title seasoning and your hosting start date separately.
- Check that your local STR permits and HOA rules are in order.
- Pull your current insurance policy and confirm it covers STR use.
- Collect entity documents if you hold title in an LLC.
- Check for a prepayment penalty on your existing loan.
- Decide the target purchase price and leverage before you decide the cash-out size.
The order matters: refinance, let funds settle, document the source, then contract on the next property. The next lender will want to see where your down payment came from.
Key Terms Defined
DSCR: the debt service coverage ratio, which compares a property’s rent to its full monthly payment.
PITIA: principal, interest, taxes, insurance, and any HOA dues, the payment used in the DSCR calculation.
Cash-out refinance: a new loan larger than the payoff, where you keep the difference.
Seasoning: the waiting period a lender wants between events, such as buying and refinancing.
Hosting history: your documented record of operating the property as a short-term rental.
Non-QM: a loan that falls outside the Qualified Mortgage standards.
For the full picture of how these loans work, see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Can I use a short-term rental cash-out refinance for a down payment?
Yes. The cash is yours once the loan funds, and many investors use it as the next down payment. The next lender will want to see where the funds came from, so keep the paper trail clean.
How much can I borrow against a short-term rental?
Typically up to about 70% LTV on STR collateral for a cash-out, subject to lender guidelines. Rental coverage can bring the amount lower. The smaller of the leverage test and the coverage test sets your loan.
Do I need 12 months of hosting history?
Most STR refinance programs want about 12 months of documented hosting, and a credit score around 640 or higher. Newly converted properties often fall short. Some programs use market rent or trim the cash-out instead.
Does clearing 1.00 mean the property cash flows?
No. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex are outside the calculation, so a 1.25x file can still lose money in a slow month.
Can I borrow through an LLC?
Often yes, subject to lender program eligibility. Make sure the entity on the loan matches the entity that holds your funds and title to avoid late-stage delays.
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 investor loans through select lenders in its wholesale network, across 41 markets including Washington, D.C., and the quote request at Lendmire’s mortgage quote page is the place to start. This is not a commitment to lend.
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, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 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. CFPB’s explanation of Qualified Mortgages
2. HousingWire: Short-term rentals are breaking the appraisal playbook
3. Nevada Real Estate Division: Fannie Mae short-term rental guidance
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: How to Refinance a Rental for a Lower Payment With a DSCR Loan · Short-Term Rental Cash-Out Refinance Requirements for a First-Time Host · DSCR Cash-Out Refinance Requirements With a Lease That Ends Next Month
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.