The Quick Read: The amount is capped by the lowest of three limits: the leverage ceiling, the program’s dollar ceiling, and the amount the unit’s rent used for lender review can support. Condotels sit in a narrower corner of the non-QM market than houses or ordinary condos. On a short-term rental purchase, leverage tops out at 75% of value on the strongest files, and select lenders in the network review the building as well as the borrower.
- Short-term rental purchase leverage runs up to 75% LTV; refinance and cash-out run up to 70%.
- A 640+ credit score and about 12 months of hosting history are typical expectations.
- Coverage starts at 1.00 on both purchases and refinances in select programs.
- Standard programs reach up to $3,000,000, though condotel files can face tighter ceilings.
- Resort dues sit inside the payment and can cap the loan before leverage does. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Counts as a Condotel or Resort Unit?
A condotel is a unit in a building that operates like a hotel. Think front desk, central reservations, housekeeping, a rental program, and governing documents that limit how much the owner can stay. A “resort unit” is looser language. Some are ordinary condos in a resort town. Others are true hotel-style units. The lender’s classification decides which guidelines apply, so ask before you make an offer.
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 15, 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 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.
That classification matters because conventional financing sold to the agencies excludes these buildings. The Fannie Mae Selling Guide on ineligible projects lists hotel or motel operation, resort licensing of the association, owner-occupancy restrictions, and mandatory rental pooling as disqualifiers. Its general property eligibility section also lists units in condo hotels as ineligible. DSCR loans are non-agency, business-purpose loans, so condotels go to select non-QM lenders who apply their own building review.
Can a Short-Term Rental DSCR Loan Finance One?
Often, yes, though the pool of lenders is thinner than for a standard rental. Across the wholesale network, most programs that accept condotels want the building to pass their own review. Financials, reserves, insurance, litigation, commercial space, investor concentration, and the rental program agreement all get a look. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines, rather than on personal income documents.
In practice, a strong borrower can still be turned away by a weak building. Approval problems on these files usually trace back to the project, not the person.
How Is the Maximum Loan Amount Determined?
Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The maximum loan is the lowest of three numbers. Whichever binds first sets your ceiling.
| Limit | What it measures | Typical short-term rental figure |
|---|---|---|
| Leverage cap | Percent of price or appraised value | Up to 75% purchase; up to 70% refinance or cash-out |
| Income cap | Rent supportable at the coverage floor | 1.00 floor in select programs |
| Program ceiling | Lender’s dollar limit | Up to $3,000,000 standard; may be tighter for condotels |
Each limit works differently. The leverage cap is simple: lower of price or appraised value, times the allowed percentage. The income cap is where condotels surprise people. Debt service coverage compares rent used for lender review to the full monthly obligation: principal, interest, taxes, insurance, and association dues. Higher dues eat into coverage, so the payment the rent can carry shrinks, and so does the loan.
The program ceiling is the least discussed. A lender that offers large balances on houses may set a lower cap on condotel collateral. These figures differ by lender, which is where comparing programs matters. Loan size, leverage, and transaction type also shift reserve requirements, commonly around six months of PITIA, with higher balances stepping up.
Which Income Counts Toward the Ratio?
The income source can change the loan more than any other choice. Lenders generally accept a few approaches, and they do not weigh them equally.
| Income method | How it works | Effect on loan size |
|---|---|---|
| Appraiser rent survey | Long-term rent opinion (Form 1007 for single units) | Often lowest; may sit well below short-term potential |
| Trailing 12-month statements | Resort or program manager reports | Strong when history is steady |
| Platform or deposit records | Booking statements, bank deposits | Useful with a full year of data |
| Market projection | Data-service estimate, then adjusted | Accepted by only some lenders |
For a condotel, documented history from the rental program is typically easier to underwrite than a forecast.
One more point: owner share matters. In a rental pool, the manager keeps a split. Qualifying income is generally the owner’s share, not the gross booking figure. Using gross overstates what the file supports.
Three Scenarios That Show the Mechanics
These are illustrative setups, not market data, and they use ratios rather than dollar amounts.
Scenario one: income method. Picture a resort unit purchased at a stated price with 25% down. Run it on the appraiser’s long-term rent and coverage lands near 0.9x. Run it on twelve months of owner-share statements and coverage clears roughly 1.2x. Same unit, same leverage, but only the second path supports the full loan. The lender decides which method it will accept, so confirm that before you commit. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Scenario two: dues. Say two similar units each gross the same rent. One building carries modest dues, the other carries resort-level dues. The second unit’s coverage runs a full tenth or more lower, because dues sit inside PITIA. At the leverage cap the first unit works. The second may need a smaller loan or more cash down.
Scenario three: a failing file. Consider a unit that comes in around 0.85x. The levers are real but limited: more down payment, which lowers the payment and can lift the ratio; a stronger documented income source; or an interest-only period through select lenders, which reduces the monthly obligation. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted, and subject to credit approval and property review. If the unit only works at sub-1.00 coverage, ask whether the building is the right pick.
A larger down payment never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough coverage.
Purchase, Refinance, and Cash-Out Differ
Leverage tightens as the transaction moves away from a plain purchase. Short-term rental purchases run up to 75% LTV. Refinances and cash-out on short-term rental collateral run up to 70%. A standard long-term rental cash-out tops out around 75%, but that ceiling does not apply here. Cash-out also commonly expects about six months of seasoning.
Coverage floors are 1.00 on purchases and refinances in select programs. Hosting history of about 12 months and a 640+ score are typical, though most programs prefer higher scores for the strongest leverage.
Lendmire’s pieces on financing a resort unit short-term rental with a new permit and on qualifying for a rural resort unit short-term rental cover the permit and location angles that can change which lenders look at a file.
What the Lender Reviews in the Building
Expect a document request. The building is underwritten alongside the unit.
| Item | Why it matters |
|---|---|
| Association financials and reserves | Signals deferred maintenance risk |
| Insurance coverage | Gaps can end a file |
| Litigation | Pending suits can stall review |
| Commercial space share | High shares can disqualify |
| Investor concentration | Heavy single-owner holdings raise concern |
| Rental program agreement | Mandatory or voluntary changes underwriting |
Mandatory programs are generally easier to underwrite. Voluntary ones tend to need unit-level rent verification. Each lender sets its own thresholds, so a building that fails one may pass another.
What the Ratio Does Not Tell You
Clearing 1.00 is not the same as positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, special assessments, and capital spending all sit outside it. Seasonality adds risk, so use twelve full months and avoid annualizing a peak season.
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.
Before You Make an Offer
1. Ask whether the lender treats the building as a condotel.
2. Get the rental program agreement and association documents.
3. Request twelve months of owner-share statements.
4. Run coverage on full PITIA, dues included.
5. Compare more than one program, since ceilings and building rules differ.
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.
The complete DSCR loans guide covers the broader mechanics.
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
Condotel: A unit in a building run like a hotel, usually with a front desk and a rental program.
Rental pool: An arrangement where the manager rents units and splits revenue with owners.
PITIA: Principal, interest, taxes, insurance, and association dues.
DSCR: rent used for program review divided by the full monthly housing obligation.
Non-warrantable: A project that falls outside agency eligibility rules.
Frequently Asked Questions
What is the biggest loan I can get on a condotel?
Standard programs reach up to $3,000,000, but condotel collateral may carry a tighter ceiling at some lenders. Leverage up to 75% on a purchase and the income cap often bind first. Everything is subject to lender guidelines and property review.
Does a larger down payment guarantee approval?
No. More equity lowers the payment and can lift coverage, but it does not override credit floors, reserve rules, or building eligibility. Strong files need both equity and rental coverage.
Can I use projected Airbnb income?
Only some lenders accept projections, and those that do adjust the figure. Twelve months of owner-share statements are generally easier to underwrite than a forecast.
Do HOA and resort fees reduce my loan?
Yes. They sit inside PITIA, so higher dues lower coverage and can shrink the loan the rent supports even when gross income looks strong.
Can I refinance a condotel and pull cash out?
Often, with leverage up to 70% on short-term rental collateral and about six months of seasoning commonly expected. The building must still pass review.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire, a broker arranging DSCR financing through select lenders across 41 markets including Washington, D.C., can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Loan terms are subject to lender guidelines and credit approval. This is not a commitment to lend. Resort towns with thin long-term rental markets are exactly where documented hosting history, not a rent survey, ends up deciding the loan.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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References
1. Fannie Mae Selling Guide: Ineligible Projects
2. Fannie Mae Selling Guide: General Property Eligibility
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 a Luxury Rental DSCR Loan Works in Dallas · How a Beverly Hills Luxury Rental DSCR Loan Works · Can Personal Income Carry a Luxury Rental on a Super Jumbo DSCR Loan?
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.