The Quick Read: Usually not at 75% if the property is underwritten as a short-term rental. Cash-out leverage on short-term-rental collateral typically tops out at 70% loan-to-value. The 75% cash-out ceiling belongs to standard long-term rentals, and 75% is also the top for short-term-rental purchases, subject to lender guidelines. That gap trips up a lot of owners who plan a cash-out around the purchase number.
- STR cash-out refinance: up to 70% LTV. Standard long-term rental cash-out: up to 75% LTV.
- STR purchase: up to 75% LTV on the strongest files.
- Typical STR expectations: a 640+ credit score, about 12 months of hosting history, and a 1.00 coverage floor on the refinance.
- The loan is sized by the lower of two tests: value (LTV) and rent coverage (DSCR).
- Clearing 1.00 coverage is a financing test. It is not a profit forecast. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Key Terms Defined
Loan-to-value (LTV): the new loan balance divided by the appraised value of the property.
Cash-out refinance: a refinance where the new loan exceeds the payoff and closing costs, so the borrower receives cash at the table.
Hosting history: the documented record of bookings and payouts showing the property has operated as a short-term rental.
Seasoning: the minimum ownership period before a lender sizes a cash-out on appraised value instead of purchase cost.
DSCR (debt service coverage ratio): the property’s rental income divided by its monthly payment of principal, interest, taxes, insurance, and any HOA dues (PITIA).
Form 1007: the appraiser’s single-family rent schedule, which estimates long-term market rent.
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.
Does the 75% Number Apply to a Short-Term Rental Cash-Out?
No. Across the wholesale network of DSCR lenders, 75% shows up in two places that get mixed up with short-term-rental cash-outs. One is the purchase of a short-term rental. The other is a cash-out on a standard long-term rental. A refinance of a property underwritten on short-term-rental income sits about five points lower, near 70%.
Here is where the confusion starts. An owner buys an Airbnb at 75% LTV, hears that DSCR cash-outs go to 75%, and assumes the two numbers stack. They don’t. Purchase leverage and cash-out leverage are separate tiers, and the short-term-rental tier steps down on a refinance because the income is harder to prove and more volatile. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The 75% figure is also a ceiling, not a promise. It describes the strongest standard-rental files: solid credit, healthy coverage, clean appraisal, clean title. Weaker credit or thin coverage pulls leverage down from the cap, and a lender’s property review can pull it down further.
A fair question is whether any program in the market gives 75% on short-term-rental collateral. Some do, depending on how they underwrite the income and how long the borrower has owned the property. On the programs that Lendmire’s network places, the working figure for a cash-out on a property underwritten as a short-term rental is 70%. Plan around that number.
The Four Approval Tests
An STR cash-out has to pass four tests at the same time. Failing any one downsizes the loan or ends the file.
| Test | What the lender checks | How it fails | Typical fix |
|---|---|---|---|
| Leverage | New loan vs. appraised value | Payoff plus cash-out exceeds 70% | Take less cash |
| Coverage | Income vs. new PITIA | Ratio under 1.00 on the bigger loan | Lower the loan size |
| Hosting history | About 12 months of bookings | Short or gappy record | Wait, or use a long-term-rent path |
| Credit and reserves | 640+ score; reserves vary | Score or reserves short | Pay down cards, document funds |
Leverage
The lender takes the appraised value, applies the cap, and subtracts what you owe. Whatever is left, less closing costs, is your net. Seasoning decides which value is used. Inside the seasoning window, loans are commonly sized on cost. After it, appraised value governs. About 6 months is the common expectation on standard rentals. Seasoning changes the value basis, not the LTV cap.
Coverage
This is the test that catches people. When you pull equity, the balance goes up, so the payment goes up. Income stays the same. The coverage ratio drops with every extra dollar you take out.
So the loan is capped by the lower of the two tests. On a property with a lot of equity but modest rent coverage, the DSCR test can cap the loan before the LTV test does. A thin appraisal makes it worse: proceeds can shrink or turn into cash to close.
The test is rent divided by PITIA. Here is an easy way to see it: income that is exactly equal to PITIA gives a ratio of 1.00, and income that is double gives 2.00.
Hosting history
On a refinance, lenders lean on what the property has actually earned, not a projection. Expect about 12 months of hosting history, shown through booking records and payout statements. Your own spreadsheet doesn’t count. The figure has to come from a source the lender accepts.
Credit and reserves
Short-term-rental files typically want a 640+ score. Reserves vary by lender, leverage, loan size, and transaction type. Around 6 months of PITIA is common, and larger loans usually step up. Loans on standard programs run up to $3,000,000, and balances below the standard-program minimum route through select lenders in the network.
Reserves documentation is where files stall quietly. Bank statements need to show the funds are yours and seasoned in the account, not freshly moved from another account without a paper trail.
How Lenders Count Short-Term Rental Income
On a refinance, the income comes from booking history and payouts. On a purchase, it can rest on a market-data projection because no history exists yet. That difference is why STR purchase leverage (75%) can sit above STR cash-out leverage (70%).
Many owners expect the appraisal’s rent schedule to capture their Airbnb income. It usually doesn’t. Form 1007 is the appraiser’s schedule of long-term market rent. Fannie Mae’s appraiser guidance notes the form is built for monthly market rent and is not designed for short-term rentals, and that a nightly rate multiplied by 30 is not market rent. Freddie Mac’s rent schedule form describes the same purpose: the appraiser estimates comparable market rent. These are appraisal form names only. DSCR loans are not agency products and set their own terms.
| Income method | When it is used | Effect on the file |
|---|---|---|
| Trailing booking history | Refinance with about 12 months of hosting | Strongest evidence for the STR tier |
| Market-data report | Purchase, or a property with no history | Supports a projection, not a refi |
| Long-term market rent | Short or unproven history | Lower leverage cap applies |
One practitioner pattern shows up often. Files in off-season months come in light on trailing income, and the borrower has strong summer numbers that the averaging dilutes. Timing the application after a stronger stretch of the booking calendar helps the average. It doesn’t change the cap.
A Worked Example: Same Property, Two Caps
Run this with percentages only. Say the appraised value is 100 units, and the existing loan payoff is 50% of that value. Closing costs are set aside.
- At a 70% cap (short-term-rental collateral): maximum new loan is 70% of value, so gross cash-out before costs is 20% of value.
- At a 75% cap (standard long-term rental): maximum new loan is 75% of value, so gross cash-out before costs is 25% of value.
Five points of cap is a quarter more cash on the table in this example. That is the cost of misreading the tier.
Now run the second test. The larger loan raises the payment, and rent stays flat. If the property covers its payment at roughly 1.25x at the starting balance, a full cash-out pull can push that ratio toward the 1.00 floor. If it falls below the floor, the lender sizes the loan down until coverage clears or the deal works to a different path. Some select lenders in the network review coverage below 1.00, with leverage and terms adjusted. That is a separate path from the standard 1.00 programs, not the same program with a moving floor.
These ratios are modeled assumptions for illustration, not market data. The site’s calculator is an editable, illustrative estimate and does not produce a quote.
Why Files Get Downsized or Denied
These are the usual failure points on short-term-rental cash-out files, with the fix for each.
1. Hosting history under about 12 months. Fix: wait until the record is complete, or have the file underwritten on long-term market rent, which carries a lower cap.
2. Coverage under 1.00 on the new balance. Fix: take less cash, or pay down the loan before applying.
3. Appraisal comes in low. The value drops and the cap applies to a smaller number. Fix: submit an appraisal reconsideration packet with recent comparable sales and condition support.
4. Income evidence doesn’t match the file. Payout statements that don’t tie to the booking records, or a property listed under a different entity name than the borrower on the application. Fix: align entity documents and platform accounts before submitting.
5. Local rules or HOA restrictions. 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. An HOA questionnaire that shows short-term rentals are barred can end the file regardless of income.
6. Wrong insurance. A standard landlord policy written for long-term tenants may not match short-term use. Get a quote that fits the actual use before the file goes in, not after.
7. Ineligible property type. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in these programs.
8. Title or payoff problems. Open liens, a prepayment charge on an existing DSCR loan, or an unclear payoff statement. Fix: order the payoff early and clear title issues before the appraisal.
Timing: Seasoning, Delayed Financing, and Exits
Seasoning is the clock most investors misjudge. About 6 months from the recorded purchase date is the common expectation on standard rentals, documented by the settlement statement. Files that assume the clock away get kicked back.
Buyers who paid cash sometimes ask about delayed financing, which lets a lender size a loan off the purchase price shortly after an all-cash purchase. Fannie Mae’s Selling Guide discusses a delayed financing exception for its own conforming loans. That is an agency rule and doesn’t govern DSCR files. In the DSCR world, a seasoning exception only waives the wait. It does not waive coverage, reserves, the appraisal, or leverage caps.
If you bought with hard money or a bridge loan, the cleaner path is usually a rate-and-term refinance first, then a cash-out after seasoning. Any cash back to the borrower makes it a cash-out, so don’t assume a small amount of cash at closing keeps you in the lower-risk category.
When Cash-Out Is the Wrong Move
Sometimes the right answer is not to pull equity.
If coverage is already near the floor, a cash-out pushes the file under it. If there is no use for the cash that earns more than the added carry, you are borrowing to hold money. If your hosting history is thin and the property is covered on long-term rent, a rate-and-term refinance can improve the structure without raising the balance.
The cash-flow reality matters here, too. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside it. A property can clear 1.00 and still lose money. The ratio tells the lender the rent covers the payment. It doesn’t tell you what you keep.
For scaling plans, the leverage tiers matter. Cash-out proceeds often fund the next down payment, and since STR purchases can reach 75% while STR cash-outs sit near 70%, model the next purchase on the cash you will actually receive. The complete DSCR loans guide covers the full structure.
A Pre-Application Self-Check
Run the file through these before it goes to a lender. The outcome depends on where it lands.
- 12 months of booking history and payouts, tied to the entity that owns the property. Yes means the STR tier is open. No means wait or use the long-term-rent path.
- Appraised value times 70%, minus payoff and costs, is at least the cash you want. Yes means proceed. No means the ask exceeds the cap.
- Coverage at the new balance stays at or above 1.00. Yes means proceed. No means lower the loan size.
- Credit score 640 or above, and reserves documented. Yes means proceed. No means fix credit or build reserves first.
- Local rules and HOA allow short-term use, and insurance matches. Yes means proceed. No means stop. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Outcomes fall into four paths: approved as structured, approved at lower leverage, wait and re-apply, or restructure to a rate-and-term refinance. Each is subject to lender guidelines, credit approval, and property review.
Frequently Asked Questions
Can any lender in the market give 75% on a short-term rental cash-out?
On the programs the network places, the typical ceiling on a short-term-rental cash-out is 70%. Treat 75% as the standard long-term-rental cash-out ceiling and the short-term-rental purchase ceiling.
What if I have fewer than 12 months of hosting history?
Expect the file to be underwritten on long-term market rent instead of short-term income, which carries a lower leverage cap, or to wait until the record is complete. A rate-and-term refinance with no cash back is another route. A fresh lease or a few strong months is evidence of income, not the final rent figure.
Does my credit score change the 70% cap?
Yes, it can. A 640+ score is the typical floor for short-term rentals, but the cap is a ceiling for the strongest files. Lower scores or thinner coverage usually pull leverage down from the maximum, and scores around 700 and up tend to open the strongest tiers.
Is a cash-out refinance the same as paying off my loan?
No. A payoff-only refinance returns no cash and is treated as rate-and-term. Any cash back to the borrower makes it a cash-out, with the cash-out leverage cap and seasoning rules.
Do I need personal income documents?
DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Lenders still review credit, reserves, entity documents (subject to program terms when the property is held in an LLC), and the property itself.
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. Qualification is subject to lender guidelines and 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), 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 Appraiser Update: Form 1007 and short-term rentals
2. Freddie Mac Form 1000: Single-Family Comparable Rent Schedule
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: Best Short-Term Rental Cash-Out Refinance Program in the Last Year of Your Loan · Short-Term Rental Cash-Out Refinance Options After Buying a Property With Cash
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.