The Quick Read: Yes, in many cases, but only when the specific unit can legally operate as a short-term rental for the life of your plan and the rental income covers the full monthly payment, including taxes, insurance, and any condo association dues on the unit. On Maui, the property’s zoning and permit status matters as much as the loan itself. Qualification is subject to lender guidelines, credit review, and property review.
- A DSCR loan is reviewed primarily on property-level rental income covering the payment, not on your personal income.
- On short-term rental collateral, leverage typically tops out at 75% on a purchase and 70% on a refinance or cash-out.
- Expect a credit score of 640 or higher and about 12 months of hosting history on most short-term rental files.
- Apartment-zoned Maui condos face a legal end date for short-term use, which changes how lenders view the income.
- Always run the numbers on long-term rent alone before you buy.
How Does a DSCR Loan Work on a Vacation Rental?
A DSCR loan compares the property’s rent to its monthly obligation. The DSCR, or debt service coverage ratio, is the rental income divided by PITIA. PITIA is principal, interest, taxes, insurance, and association dues. A ratio of 1.00 means the income exactly covers that payment.
Short-Term Rental Calculator
Run the STR 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 nightly rate, occupancy, taxes, and insurance for a more accurate picture.
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 29, 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.
Across the wholesale network Lendmire works with, 1.00 is where many select programs start for short-term rentals, on both purchases and refinances. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Neither is a promise. Stronger coverage opens better pricing and higher leverage.
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. If you want the full background, Lendmire’s complete DSCR loans guide covers the basics.
One caution before the Maui specifics. Clearing 1.00 does not mean the property produces positive cash flow. Repairs, vacancy, management fees, utilities, and capital expenses all sit outside the calculation.
Why Does Maui Legal Status Come First?
A lender will only credit income the property can legally earn. On Maui, that depends on the type of property and how it is zoned. 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.
The headline is not a countywide ban. Maui County says its Bill 9 corrects a zoning exemption that let transient vacation rentals operate in apartment-zoned districts, and that it does not end short-term rentals countywide. The county counted 6,208 listed units actively operating as short-term rentals as of late May in its tally. It also says roughly 2,700 in South Maui and 3,300 in West Maui remain unaffected.
For the affected condos, there are hard dates. A local brokerage guide reports that the last legal guest night in West Maui is December 31, 2028, and in South Maui and the rest of the county it is December 31, 2030. It puts the number of units on the list at roughly 7,000. Verify those dates with the county before you rely on them.
Lawsuits are pending. Kāʻanapali Royal owners sued to block enforcement, and the same local guide reports the deadlines remain in effect while the cases proceed. A lender is unlikely to treat a lawsuit as a reason to count income past the deadline.
What Does Each Property Type Look Like to a Lender?
The status of the specific unit sets what a lender can use. This table shows the pattern we see across the network. Each lender sets its own rules.
| Property status | Short-term income usable? | What a lender may want |
|---|---|---|
| Hotel- or business-zoned condo | Often yes | Zoning confirmation, condo documents |
| Apartment-zoned condo on the phase-out list | Only until the legal end date | Remaining runway, long-term rent fallback |
| House with a valid short-term rental home permit | Often yes | Permit and its expiration date |
| House with no permit | No | Long-term rent only |
| Rezoning application pending | Unlikely to count | Long-term rent until approved |
Properties already in hotel or business zoning are outside the apartment-district phase-out. That source also reports the County Council passed Bill 88 by a 7-2 vote, creating H-3 and H-4 hotel-zoning classes that could let some condos keep operating. Rezoning status is fluid, so verify the current status before you count on it.
Single-family homes follow a different path. Maui County Code Chapter 19.65 prohibits operating a short-term rental home without a valid permit. It generally limits an applicant to one permit and caps the bedrooms used for rental at six on Maui and Lanai. Permits are also limited by region and need periodic renewal. Ask for the permit and its expiration date before you write an offer.
Condo association rules can also prohibit short-term rental even where county zoning allows it. Read the governing documents first.
How Do Lenders Count Vacation Rental Income?
Lenders generally use one of three methods to measure short-term rental income. Each program chooses which it accepts.
| Method | What it uses | Typical limit |
|---|---|---|
| Trailing history | Platform or bank records for the past 12 months | Needs an operating track record |
| Market-data projection | AirDNA-style estimate for the area | Often needs appraisal support |
| Appraiser rent schedule (Form 1007) | Long-term market rent | Usually lower than actual vacation income |
A Form 1007 is the appraiser’s long-term rent survey. It is the conservative fallback and the likely result if short-term income cannot be used.
Most short-term rental files in our network expect about 12 months of landlord or host experience. That is why a brand-new purchase with no history can be harder than a refinance on a property that has been operating.
Lenders usually reduce gross short-term income by an expense factor before they compute coverage. The size of that factor varies by program, so ask what your lender applies. The appraisal still supports value and collateral. Income data does not replace it.
What Does the Math Look Like on a Maui Condo?
Run the same condo two ways. These are modeled assumptions, not market data.
Assume a Maui condo with large association dues and high insurance. On a trailing short-term income history, after the expense factor, the file clears roughly 1.25x. The same unit on the appraiser’s long-term rent lands near 0.85x. Same building, same payment, a 0.40 swing.
That gap is the whole risk on a phase-out condo. If the legal short-term use ends before your loan does, the lower number is the one that remains. A lender reviewing that file may apply extra scrutiny or fall back to long-term rent.
For a coverage ratio below 1.00, a separate select-lender path exists in the network. Leverage and terms adjust. Qualification is subject to lender guidelines, credit approval, and property review.
Pairing a larger down payment with the same property can lift the ratio, because it shrinks the payment. It does not erase leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
What Loan Terms Apply on Short-Term Rental Files?
These are typical ranges across select lenders in Lendmire’s wholesale network. They are not guarantees, and every file is underwritten individually.
- Purchase leverage: up to 75% LTV on the strongest short-term rental files.
- Refinance and cash-out: up to 70% LTV on short-term rental collateral.
- Credit score: 640 minimum for short-term rentals.
- Coverage floor: 1.00 on purchases and refinances.
- Experience: about 12 months of landlord or host history.
- Loan size: up to $3,000,000 on standard programs. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Reserves vary by lender, leverage, loan size, and transaction type. Some programs allow terms beyond the 30-year fixed, including interest-only periods, through select lenders. The network does not offer DSCR loans on manufactured homes, log homes, or barndominiums. If an LLC holds title, eligibility is subject to lender program requirements.
Why Not Use a Second-Home Loan Instead?
A second-home loan is built for personal use and limits how much the property can be rented. That blocks full-time vacation rental use. A DSCR loan works the other way. You certify you will not occupy the property, so personal stays are limited. If you plan to live there part of the year, a second-home loan fits better.
Key Terms Defined
DSCR (debt service coverage ratio): The property’s rental income divided by its monthly payment obligation.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly payment a lender tests the rent against.
Minatoya list: The county’s list of apartment-zoned condo units that were operating as short-term rentals, now subject to a phase-out.
Short-term rental home permit: The Maui County permit a house needs to legally operate as a vacation rental.
Form 1007: The appraiser’s rent schedule, which reports long-term market rent.
Hotel-zoned: A property zoned for hotel or business use, which sits outside the apartment-district phase-out.
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.
Where Do These Deals Usually Fall Apart?
Most failures trace back to one of four problems.
1. Unclear legal status. Fix it by getting the permit or zoning confirmation before you make an offer.
2. Thin coverage on long-term rent. Fix it with a larger down payment, a different property, or a program built for lower coverage, with leverage and terms adjusted.
3. Condo problems. Some buildings carry rental restrictions, high association dues, or rental-pool rules that limit eligibility.
4. No operating history. Fix it by buying a property that already has booking records, or by looking at programs that accept projections.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Before you pay for an appraisal, run through this short list:
- Confirm the unit’s zoning and permit status in writing.
- Find the legal end date, if any.
- Read the association rules on short-term rental.
- Gather 12 months of platform or bank records if the property already operates.
- Test coverage on long-term rent alone.
Frequently Asked Questions
Do I need tax returns or W-2s for a Maui vacation rental DSCR loan?
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. It does not run on your personal employment income. Lenders still review your credit and reserves, and your documents depend on the program.
Can I qualify if the vacation rental has no booking history?
Sometimes. Some programs accept a market-data projection, but many short-term rental files expect about 12 months of hosting experience. A purchase with no history may also fall back to the appraiser’s long-term rent figure.
What happens if my condo’s short-term rental right ends?
Long-term residential use remains permitted in apartment districts without rezoning, per Maui County’s announcement. Your income would drop to long-term rent. That is why you should test coverage on that number before you buy, and check that the loan term fits the remaining legal runway.
Can I get a DSCR loan if coverage is below 1.00?
It is available through select lenders in the network, with leverage and terms adjusted. It is a separate path from programs that start at 1.00, and it usually needs stronger credit or more cash down.
Does a strong AirDNA projection guarantee approval?
No. The property must be legally permitted, and zoning, permit, or association limits can block financing despite attractive projections. Lenders also review credit, reserves, and the appraisal.
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. Lendmire is a broker arranging DSCR financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. For a refinance on an operating vacation rental, see Lendmire’s guide Does a Vacation Rental Qualify for a DSCR Refinance on Airbnb Income?. Request a quote at 828-256-2183 or through the quote form.
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).
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. Maui County – Bill 9 signing announcement
3. Maui Now – Bill 9 challenged in court
4. SellYourMauiProperty – Bill 88 explainer
5. Maui County Code Chapter 19.65
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: No-Ratio DSCR Loan vs Standard DSCR Loan for a Vacant Rental · One Blanket DSCR Loan vs Individual Loans for a Rental Portfolio · DSCR Refinance vs Keeping the Original Loan on a Rental
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.