The Quick Read: A projection is a forecast built from comparable listings and market data. Booking history is proof of what the property actually earned. Which one a DSCR lender counts depends mostly on whether you are buying a property with no record or refinancing one that already has about a year of bookings. DSCR, or debt service coverage ratio, compares the property’s rent to its full monthly housing obligation. The lender’s income choice changes the top half of that math.
- Projections tend to fit purchases, conversions, and first-time hosts with nothing to document.
- Booking history tends to fit existing short-term rentals and refinances, where a real record is expected.
- Either way, lenders often count only part of the income, and the full housing payment stays in the denominator.
- STR loans in the network typically expect a 640+ credit score and about 12 months of hosting experience, subject to lender guidelines.
- No single industry rulebook governs this, so each program sets its own income basis.
Here is the honest answer on who each path serves. A projection is for the investor who is buying, with no operating record to show. Booking history is for the investor who already runs the property and wants the loan to reflect real earnings. Neither is the better path in the abstract. The better one is whichever your property and transaction can support. The sections below lay out the trade-offs, so you can see which side your file falls on.
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.
Side-by-Side
The table below compares the two income bases as they typically work across select lenders in Lendmire’s wholesale network. Program details vary by lender, borrower, and property, so treat the cells as ranges, not promises.
| Factor | Projected Income | Booking History |
|---|---|---|
| Review basis | Forecast from comparable listings | Actual trailing earnings |
| Documentation | Market report, appraiser STR analysis | Platform exports, deposits, manager statements |
| Typical transaction | Purchase with no record | Existing STR, refinance, cash-out |
| Hosting record | Projection, leaned on when no hosting record exists | About 12 months commonly expected |
| Leverage (STR collateral) | Purchase up to 75% LTV | Refinance around 70%; cash-out 70% |
| Coverage floor | 1.00 on purchases | 1.00 on refinances |
| Property types | Same eligible types either way | Same eligible types either way |
| Entity vesting | LLC possible per program | LLC possible per program |
| Reserves | Commonly around 6 months PITIA | Commonly around 6 months PITIA |
| Main risk | Forecast runs optimistic | Window may miss peak or slow seasons |
PITIA stands for principal, interest, taxes, insurance, and association dues. LTV, or loan-to-value, is the loan amount as a percentage of the property’s value. A few notes on the table. Reserves are the liquid funds a lender wants you to hold after closing. They vary by lender, leverage, loan size, and transaction type, and conservative files at modest leverage can see them reduced. Loan sizes on standard programs run up to $3,000,000. Manufactured homes, log homes, and barndominiums are not offered in these DSCR programs under either income basis.
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. Entity vesting in an LLC is available subject to lender program eligibility.
Key Terms Defined
Projected income: A forecast of what the property should earn, built from comparable listings or an appraiser’s short-term-rental analysis. It is not your own bookings.
Booking history: The record of what this specific property earned, usually shown through platform earnings reports, bank deposits, or property-manager statements.
Qualifying income: The income figure the lender actually uses in the ratio. It is often lower than gross revenue because of an expense discount.
Haircut: The discount a lender applies to STR income before calculating coverage. It trims income only. It does not change the payment.
Seasoning: The waiting period or operating record a lender wants before it relies on a certain kind of evidence.
How the Math Differs Between the Two
DSCR is qualifying monthly income divided by the full monthly housing obligation. The formula stays the same under both income bases. What changes is the number in the numerator and how much the lender trusts it.
With a projection, the lender usually wants a market report built from comparable properties. A sound report matches comps on property type, bedroom count, location, amenities, and seasonality. Lenders commonly expect it to be recent. Many also look for a minimum occupancy assumption in the report. Projections get discounted because they are a forecast. Nobody has proven the property will hit the number.
With booking history, the lender averages what the property earned over the record. A vacant month counts as zero in that average. Documents are tied together, so the platform report should match the deposits hitting the bank account. Actuals are usually discounted less severely than a forecast, because the property has already shown what it can do. That is also why a refinance or cash-out leans on history.
Here is a modeled example, not a program figure. Say a purchase projection puts gross rental coverage at 1.30x. If the lender counts 80% of that income, the ratio falls to 1.04x. The property did not change. The lender’s view of the income did. Now picture the same property after a year of operation. Say actual bookings produce gross coverage of 1.15x and the lender counts 90% of it. The ratio lands near 1.04x again, from a different starting point. The two paths can converge or split apart, depending on how the forecast compared with reality.
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. STR owners carry more of those costs than long-term landlords, so a thin ratio deserves a hard look at the operating budget.
When Projected Income Is the Better Fit
A projection is the right tool when no record exists. That covers a purchase of a property that has never operated as a short-term rental, a conversion from a long-term lease, and a first-time host buying in a market where sellers don’t hand over statements. In those cases, booking history simply cannot be produced.
Projections also make sense when the history you do have undersells the property. Perhaps the prior owner ran it badly, listed it poorly, or blocked the calendar for personal use. A comp-based forecast can show what a well-run listing in that area earns. A lender may weigh that, though many programs will still ask for evidence of your own hosting experience.
Three caveats apply. First, a projection is only as good as its comps. A thin market with few comparable listings produces a shaky report, and a shaky report produces a discount, or a decline. Second, projections run optimistic. Third, the appraisal won’t rescue a weak forecast. The appraiser values the real estate, and the lender decides which income figure goes into the ratio.
On that last point, McKissock, an appraiser-education provider, explains that the standard rent schedule documents monthly rent rather than nightly rent or business income, and that income is ultimately the lender’s call. The Nevada Real Estate Division reproduces agency guidance saying the form cannot estimate a nightly short-term-rental fee, and that multiplying a nightly rate by 30 is incorrect. It ignores furniture, services, vacancy, and business expenses. So the old shortcut of nightly rate times 30 will not hold up in a file.
Purchase leverage on STR collateral tops out at 75% LTV on the strongest files, with a 1.00 coverage floor on purchases. Expect a 640+ credit score and roughly 12 months of landlord or host experience on most programs, though specific lenders differ. If you are buying with no hosting record at all, ask early which lenders in the network will review the file, because not every program will.
When Booking History Is the Better Fit
Booking history wins when the property already has a record and you are refinancing or pulling equity. Lenders generally want proof on those files, because the property is operating and the data exists. A year of real earnings is hard to argue with.
History also helps when the property performs better than a generic forecast would suggest. A well-reviewed unit with strong repeat occupancy can beat its comps. The record lets the lender see that.
The weak spots are different. A short window can mislead. A trailing period taken at peak season flatters the average, and one taken in a slow stretch punishes it. Owner stays can complicate things, because programs differ on whether personal use breaks the operating record. Seller-supplied history is another question. It can be useful evidence on a purchase, but lenders tend to want it supported by deposits and platform reports, not just a spreadsheet.
Refinance leverage on STR collateral runs around 70% LTV, and a cash-out on STR collateral is also 70%. The coverage floor on refinances is 1.00. Standard long-term rentals on a cash-out run higher, up to about 75% LTV, so the STR label really does change the numbers. For a closer look at the cash-out version of this decision, see Lendmire’s piece Projected STR Income vs. Booking History for a DSCR Cash-Out Refinance. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Which One Wins When They Disagree?
The one the lender’s program names for your transaction wins. You rarely get to choose. On a purchase with no record, the projection governs. On a refinance with a full record, history usually governs. Some programs look at both, but you should not assume it.
When the two disagree on a file where both exist, the gap tells you something. If history comes in below the projection, either the property is underperforming or the forecast is inflated. Treat that as information. A lender is likely to anchor on the lower, proven number. If history comes in above the projection, the comps may be conservative, and the record is your best argument.
Before you order an appraisal, ask which income basis the program will use. Two lenders can reach different coverage numbers on the same listing. Asking first saves you from paying for work that points at the wrong figure.
Thin, Partial, and Seasonal History
Most real files are not clean. You bought eight months ago. You converted from a long-term lease partway through the year. Your best months were in summer, and the trailing window starts in autumn.
In those cases, a few lenders in the network may blend actual months with market projections. Others want the full record. Others will fall back to the appraiser’s long-term rent schedule, which can sit well below true short-term potential and produce a lower ratio. That fallback is a cross-check, not an insult. It reflects how a monthly lease is valued, not what your calendar actually earned.
Seasonality matters either way. A projection smooths the year. A trailing record exposes every dip. If your property lives on summer or holiday demand, a lender may weigh a full year more heavily than a partial one.
If you are under the usual record, you have three options. Wait and season the property. Look for a lender that blends history with a projection. Or run the long-term-rent version of the file to see whether it clears on its own. Some programs allow coverage below 1.00 through select lenders in the network, with leverage and terms adjusted. That is a separate path, and it does not move the floor on standard programs.
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 the Appraisal Fits
The appraisal sets value, and value sets the LTV cap. It also typically produces a rent schedule for the property. Fannie Mae’s appraiser update describes Form 1007 as the single-family comparable rent schedule, documenting monthly market rent on a one-unit investment property. Form 1025 is the small residential income property report used for two-to-four-unit properties.
That guidance speaks to conventional lending and the form itself. It does not set DSCR rules. DSCR programs are set by each lender, and the rent schedule often serves as a long-term fallback or cross-check, not the final STR income figure. The takeaway is practical. Do not expect the appraiser to count your Airbnb earnings.
Build History, Then Refinance?
Buying on a projection and refinancing once you have a record is a common sequence. It has real appeal. You get into the property, prove the income, and move to a loan that reflects actual earnings.
The trade-off is that the refinance leverage on STR collateral is lower than purchase leverage, and the property has to perform. If the record comes in below the forecast, the refinance ratio may be thinner than the purchase ratio was. Build the plan assuming the forecast misses, not hits. Run the stress test at a 20% income shortfall before you buy, and see whether the file still clears.
If the property later moves back to a long-term lease, the evidence changes again.
Documentation Checklist
For the projection path, gather:
- A recent third-party market or forecast report for the property
- The appraiser’s STR analysis, if the program orders one
- Three or four comparable listings, matched on type, bedrooms, and location
- Proof the property can legally operate as a short-term rental
For the booking-history path, gather:
- Platform earnings exports, month by month
- Bank statements showing the matching deposits
- Property-manager statements, if you use one
- Evidence of your hosting record, about 12 months on most programs
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. Neither path requires personal income documents. The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
The Verdict
Projection and booking history are not rivals. They are two answers to two different situations. A projection covers the gap when no record exists, at the price of a deeper discount and a stronger need for solid comps. Booking history covers the gap when a record exists, at the price of exposing every slow month.
If you are buying a property with no record, plan around the projection and test the file against a miss. If you already operate the property, plan around the record and check that the window is representative. Reserves, credit, leverage, and property eligibility still apply on both paths, and a bigger down payment never erases them. For the full picture of how DSCR loans work, see Lendmire’s complete DSCR loans guide. 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.
Frequently Asked Questions
Can I get a DSCR loan on a short-term rental with no booking history?
Sometimes, on a purchase. Lenders can lean on a market projection, an appraiser’s STR analysis, or both. Many programs still look for about 12 months of hosting experience from you, and not every lender reviews STR files at all. Refinances usually want a real record.
Why do lenders discount STR income?
STR income swings with seasons, vacancy, and operating costs, and a long-term lease does not. A discount builds in a cushion. It trims the income side only, so the full housing payment stays in the ratio. A lower count means a lower coverage number.
Does the seller’s booking history count on a purchase?
It can serve as supporting evidence, but lenders typically want it backed by platform reports and bank deposits, not a bare summary. It also describes the seller’s operation, not yours. Some programs still want your own hosting record.
What if my ratio lands just under 1.00?
Standard programs start at 1.00 for STR purchases and refinances. A separate path through select lenders in the network takes coverage below 1.00, with leverage and terms adjusted. Qualification is subject to lender guidelines, credit approval, and property review.
Can I mix projected and actual income in one file?
Some lenders blend a partial record with market data. Others use only one basis for a given transaction type. Ask which basis the program uses before you order the appraisal, since that decides which documents you gather.
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 mortgage broker arranging DSCR investor loans through select lenders in its wholesale network across 41 markets, including Washington, D.C. It is not a commitment to lend, and every file is underwritten individually.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. McKissock: Form 1007 and Short-Term Rental Appraisals
2. Nevada Real Estate Division: reproduction of agency short-term rental guidance
3. Fannie Mae Appraiser Update
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 to Qualify for a DSCR Loan in Massachusetts · How to Qualify for a DSCR Loan in Missouri · Can You Get a DSCR Loan on Retirement Income Alone?
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
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.