The Quick Read: You don’t write the income number on a first Airbnb loan. Your job is to give the lender strong evidence, and the lender decides what it will count. That number is usually adjusted before it reaches the coverage ratio.
- A first-time host has no booking history, so the lender relies on a projection.
- The projection usually comes from an appraiser’s short-term-rental analysis, a market-data report, or both.
- Form 1007, the standard rent schedule, covers long-term rent only and can’t support Airbnb income.
- Lenders commonly discount a raw projection, and the discount varies by lender.
- Clearing 1.00 coverage is not the same as positive cash flow.
What Counts as Projected Income?
Projected income is an estimate of what a property will earn as a short-term rental before it has ever hosted a guest. A lender treats it as an opinion backed by comparable listings, not as a fact. That is why the evidence matters more than the figure.
Across the wholesale network Lendmire works with, programs generally pick from the same menu of evidence. They differ on which items they accept and how much they trust each one.
| Evidence | Who produces it | What the lender may do |
|---|---|---|
| Appraiser’s STR analysis | Licensed appraiser | Often the anchor for a purchase |
| Market-data report | Data vendor, run by you or the broker | Adjust it, or use it as a cross-check |
| Platform or manager statements | Existing host or manager | Only exists if the property already operates |
| Long-term rent schedule | Appraiser (Form 1007 or 1025) | Fallback, or a sanity check against the STR number |
Pick the row your lender accepts before you fall in love with a property. Wrong evidence, wrong number.
Why Form 1007 Can’t Carry an Airbnb
Form 1007 is the standard comparable rent schedule, and it was built for monthly, long-term rent. Class Valuation, an appraisal management company, explains that it cannot support short-term-rental income. Lean on it alone in a strong vacation market and you can end up with an artificially low coverage ratio.
Appraisers fill the gap with a narrative addendum. HousingWire reports that these addenda are often titled a Short-Term Rental Projected Income Analysis. They lean on occupancy, seasonal pricing, comparable STR performance, and stated expense assumptions.
One more trap. An appraiser can’t take a nightly rate and multiply it by 30 to get monthly rent. McKissock, an appraiser education provider, makes the same point and adds that the lender makes the final income determination.
Two-to-four-unit properties use Form 1025 instead, which is built around leases. The appraiser typically supplements it with nightly comp data.
How Underwriting Treats a Projection, Step by Step
Here is the path a first-time Airbnb file usually follows. Programs vary at each step, so treat this as the common shape, not a script.
1. The lender picks its evidence. Some programs accept a market-data projection. Others want an appraiser’s STR analysis. A few want both, and some fall back to long-term rent. Ask which before you write an offer.
2. The projection gets pulled. A tool like AirDNA’s Rentalizer builds a relevance-weighted index of nearby comparable listings. It layers in market-wide seasonality, demand, and revenue growth. It also reports a Comp Set Strength score, and adding custom comps can raise it.
3. The appraisal comes in. The appraiser forms an opinion of income. You don’t supply it, and it may land above or below the data report.
4. The underwriter adjusts the income. Underwriters commonly discount a raw projection to build in vacancy and uncertainty. The size of that discount differs by lender. No neutral benchmark exists, so don’t trust anyone who quotes one as universal.
5. The adjusted monthly income is divided by the full monthly obligation. That means principal, interest, taxes, insurance, and any HOA dues. The result is the debt service coverage ratio, or DSCR.
What decides the outcome? Which evidence the lender accepts, the haircut it applies, how good your comps are, the market’s seasonality, and the size of the payment. Five levers. You control the comps and, through the down payment, the payment.
Build the Case Before You Make an Offer
The smartest move is a conservative projection run before you offer. Appraisal fees come after you’re under contract, and the data report costs far less than a failed deal.
Choose comps like a skeptic. Match bedroom count, sleeping capacity, finish level, and location. Investor forums commonly note that views, finishes, and amenities don’t show up in a data model. If your house has a hot tub and the comps don’t, the model won’t know. If the comps have a lake view and you don’t, it won’t know that either.
Understand what the tool is. AirDNA’s own description of its Rentalizer agent lists comps, projected monthly revenue, average daily rate, and a seasonality chart. That is a solid starting point, not a promise. Accuracy cuts both ways: some hosts find these tools under-project their property, and others find them optimistic. Treat any published accuracy figure as a market-level average, not a forecast for your address.
Run three cases. Hypothetical numbers show how the ratio moves:
- Base case, using the data report as pulled: coverage near 1.25x.
- Conservative case, after a lender-style discount: coverage near 1.05x.
- Downside case, with a weak season and slow lease-up: coverage near 0.92x.
These are modeled assumptions, not market data. If the conservative case clears 1.00, you have a file that can survive an underwriter’s adjustment. If only the base case clears, you’re relying on the most flattering number in the stack.
Say the downside case lands below 1.00. That isn’t automatically the end. Many select programs start at 1.00, while a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Either route is reviewed against lender guidelines, credit, and the property.
The Package That Makes the Lender’s Job Easy
Underwriters reward files they can follow. A tidy package doesn’t change the facts, but it shortens the questions. Hand over:
- The projection report with the comp set visible, not just the headline number.
- A one-page assumptions summary listing nightly rate, occupancy, seasonality, and the expense lines you used.
- An expense schedule covering platform fees, cleaning, utilities, supplies, management, and maintenance. Show how you derived each line.
- A management plan. Self-managed or professional, and who handles guest turnover and emergencies.
- Your hosting or landlord background, if you have any. Programs often look at experience separately from the property’s own history.
- Reserves and credit documents in the usual form.
Write the assumptions in plain, modest language. Say what occupancy you assumed and why. Do not call the projection guaranteed, and do not inflate a peak-season rate into a year-round figure. Anchoring on peak season, double-counting cleaning fees, and ignoring vacancy are the usual reasons a projection gets challenged.
Where the Rule Breaks
The standard path above bends in a few named situations.
The property already operates. A seller with real platform statements gives the lender actual performance, which can skip the discount a pure projection gets. Refinances can also use actual history. First-time buyers of an operating Airbnb should ask the seller for the statements early.
Multi-unit properties. Form 1025 rests on leases, so appraisers add nightly comps or an addendum. Expect more explaining from you.
Weak or seasonal markets. A thin comp pool or heavy seasonality makes a projection harder to trust. Lenders can look harder at these markets. That calls for a more conservative base case, not a rosier one.
Local rules. 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 form is changing. HousingWire reports that the UAD 3.6 appraisal standard will retire legacy forms, including Form 1007. Narrative STR addenda stay essential either way.
Agency contrast. For context only: a Fannie Mae notice describes Form 1007 as documenting monthly market rent for a one-unit investment property in conventional lending. DSCR loans are not agency products, so those conventional rules don’t govern your file.
What the Loan Itself Looks Like
Projected income is only half the file. Equity and credit sit on the other half. A bigger down payment lowers the monthly obligation and can lift coverage, but it never erases leverage caps, credit floors, reserve rules, or property eligibility.
Across the select lenders in Lendmire’s network, short-term-rental programs typically look like this:
- Purchase leverage: up to 75% LTV (loan-to-value, the loan as a share of the property’s value) on the strongest files.
- Short-term-rental refinance and cash-out: up to 70% LTV on short-term-rental collateral. Standard long-term rentals reach 75% on cash-out.
- Credit: a 640 score or better.
- Coverage: 1.00 is where select programs start on both purchases and refinances, with stronger ratios opening better pricing and leverage.
- Experience: about 12 months of landlord or host experience is usually expected.
- Loan size: up to $3,000,000 on standard programs, with smaller balances routed through select lenders.
- Reserves: commonly around 6 months of PITIA (principal, interest, taxes, insurance, and association dues), varying by lender, leverage, and loan size.
That experience line matters for a first-timer. If you’ve never hosted or been a landlord, tell your broker on day one, because programs differ in how they review a file like that. Every file is underwritten individually and programs change. Nothing here is a commitment to lend.
DSCR covers rent against the housing payment, nothing more. Clearing 1.00 does not mean the property produces positive cash flow, because repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Your own expense schedule covers that gap. 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.
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.
For the full picture of how these programs fit together, see Lendmire’s complete DSCR loans guide. If you want the next layer on how lenders count a projection, Lendmire has a piece Qualifying An Airbnb With Projected Rental Income.
Key Terms Defined
DSCR (debt service coverage ratio): monthly rental income divided by the monthly housing obligation. At 1.00, income equals the payment.
PITIA: principal, interest, taxes, insurance, and association dues. It is the full monthly obligation used in the ratio.
LTV (loan-to-value): the loan amount as a percentage of the property’s value.
Form 1007 / Form 1025: the appraiser’s rent schedule for one unit (1007) and for two to four units (1025). Both were built around long-term rent.
Narrative STR addendum: the appraiser’s written short-term-rental income analysis, using comps, occupancy, and seasonality.
Haircut: the discount an underwriter applies to a projection before dividing by the payment.
ADR (average daily rate): the average nightly price a property earns across booked nights.
Frequently Asked Questions
Can I get a DSCR loan on a first Airbnb with no hosting history?
Possibly, depending on the program. Select lenders in the network review projection-based purchases, but short-term-rental programs typically expect about 12 months of landlord or host experience and a 640 score or better. Leverage tops out around 75% on a purchase. Lender guidelines, credit, and the property all decide the result.
Who produces the projected income, me or the appraiser?
The appraiser forms the opinion of income on an appraisal, and the lender decides what it counts. You supply supporting evidence, such as a market-data report and your assumptions. The borrower doesn’t write the coverage figure.
Is my own spreadsheet enough?
Not by itself. A spreadsheet helps the lender understand your assumptions, but it rarely replaces a third-party report or an appraiser’s analysis. Use it as the explanation layer on top of independent evidence.
What if the appraisal comes in lower than my projection?
The lender typically works from the more conservative evidence it accepts, so coverage can drop. Your options include a larger down payment to lower the payment, a different program, or a structure with adjusted leverage and terms. Running the conservative case before your offer shows you how much room you have.
Does the projection have to cover the whole payment?
The ratio compares adjusted income to the full monthly obligation, including taxes, insurance, and any HOA dues. Many select programs start at 1.00, while a separate select-lender path goes below 1.00 with leverage and terms adjusted. Stronger ratios generally open better leverage.
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. As a broker arranging financing through select lenders across 41 markets, including Washington, D.C., Lendmire can walk through your evidence options at 828-256-2183. For an Airbnb funded off a cash-out, its piece Can You Cash Out on Projected Airbnb Income With a DSCR Loan? covers that separate case.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines. This approach can suit self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Class Valuation: Appraisal Form 1007 and short-term rentals
2. HousingWire: Short-term rentals are breaking the appraisal playbook
3. McKissock: Form 1007 and short-term rental appraisals
6. Fannie Mae notice on short-term rentals and Form 1007 (hosted by Nevada Real Estate Division)
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: Airbnb Loan With Booking History vs Without: What Changes · How Much Down Payment Does an Airbnb Loan Require? · Can You Get a DSCR Loan on a Condo?
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.