Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The Quick Read: On a short-term rental, the first thing to know is that purchase leverage across Lendmire’s wholesale network tops out at 75% LTV, which means 15% down sits above the ceiling and a 25% down payment is the realistic minimum. The rest of qualifying comes down to credit, hosting history, rental coverage and reserves. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
- STR purchase leverage reaches up to 75% LTV on the strongest files, subject to lender guidelines.
- Expect a credit score of 640 or better and about 12 months of landlord or host experience.
- The purchase floor for rental coverage is 1.00, and stronger ratios help the file.
- Reserves vary by lender, leverage and loan size, and commonly run around 6 months of PITIA.
- A bigger down payment helps the ratio, but it never overrides leverage caps, credit floors or property eligibility.
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 15, 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 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.
Many investors search for a 15% down short-term rental loan because it is how long-term rental buyers sometimes stretch their cash. The short-term version follows different rules. This article explains why, what qualifying looks like step by step, and what to do if your cash sits between 15% and 25%. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Why Is 15% Down Hard to Find on a Short-Term Rental?
Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Lenders treat vacation and short-term rentals as more volatile than a long-term lease, so they cap leverage lower. On a standard long-term rental purchase, select high-leverage programs can reach 85% LTV for borrowers with roughly a 700 score or better. Short-term rental collateral does not get that tier. Across the network, an STR purchase reaches up to 75% LTV, and a refinance or cash-out reaches up to 70%. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The reasoning is simple. Income that depends on nightly bookings swings with season, demand and local rules. A lender who holds less of the property’s value in the loan has more cushion if a bad year hits. That is why the same buyer can see 85% leverage on a long-term duplex and 75% on a short-term cabin. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Here is how the down payment levels line up against the short-term purchase ceiling.
| Down payment | Resulting LTV | Against the STR purchase ceiling |
|---|---|---|
| 15% | 85% | Above the 75% cap |
| 20% | 80% | Above the 75% cap |
| 25% | 75% | At the cap, strongest files only |
| 30% or more | 70% or less | Under the cap, more room on ratio |
If the plan is to buy the property as a short-term rental, budget for 25% down at minimum. If you only have 15% to work with, you have three honest choices. You can buy a cheaper property. You can underwrite the deal as a long-term rental, which carries its own rent and leverage rules. Or you can wait and save. Reaching for a lender that advertises 15% on STR deserves a written confirmation of the exact program, because the network’s STR purchase product does not offer it. For the broader mechanics, Lendmire’s short-term rental DSCR down payment rules page compares purchase and cash-out side by side. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
How Does Underwriting Actually Treat a Short-Term Rental?
Underwriting turns the property’s rental income into a ratio and compares it to the full monthly obligation. That obligation is principal, interest, taxes, insurance and any HOA dues, known together as PITIA. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. DSCR loans are designed for non-owner-occupied investment properties, so they are reviewed differently from a standard owner-occupied mortgage.
Here is the sequence a file follows.
1. Choose the income source. A property with no history needs a projection. A property already operating as a short-term rental can use its actual record.
2. Estimate qualifying income. The lender takes the projection or the trailing history and may reduce it before running the ratio.
3. Divide by PITIA. Qualifying monthly income divided by the full monthly obligation gives the coverage number.
4. Check the number against the program floor. For STR, the purchase floor is 1.00 and the refinance floor is 1.00.
5. Test the rest of the file. Credit, reserves, leverage, the entity and the property itself all get reviewed.
Notice that the ratio is only one gate. A file with a strong number can still fail on credit or reserves. A file with plenty of equity can still fail if the rent does not cover the payment. The strongest files clear both tests, enough equity and enough rental coverage.
What Counts as Income on a Purchase With No Hosting History?
A first-time purchase generally is reviewed on a projection instead of a track record. The two common inputs are an appraiser’s short-term rental analysis and a data-service report. Lendmire’s piece Can a Short-Term Rental Purchase Qualify on Projected Rent? goes deeper on that question.
Data-service projections are built from comparable listings. AirDNA’s Rentalizer searches for comparable properties within a 10-mile radius. It selects them by proximity and by similar bedroom, bathroom and guest counts, then takes a weighted average of their performance. Each projection also carries a Comp Set Strength score, which reflects how many comparables exist and how closely they match.
Two cautions matter for your math. First, a projection is an estimate of host revenue, not a promise. Second, programs may discount projected or gross revenue before the ratio is run, and the size of that discount varies by program. An independent review at Rental Recon found the tool most reliable in data-rich markets and less so in small markets or for unusual properties. In those cases the comp set needs refining by hand.
For context, AirDNA’s national benchmark put U.S. short-term rentals at 57.2% occupancy and a $258.91 average daily rate across 1.73 million available listings. That is a national figure only. Your own comps decide your projection.
Where the Appraisal Fits In
The lender also orders an appraisal. On a one-unit property, the appraiser typically completes a rent schedule on Form 1007. On a two- to four-unit property, the appraiser typically uses Form 1025. The 1007 figure is long-term market rent, and it often sits well below what a strong vacation property earns nightly. Some programs fall back on that long-term rent for an STR, which lowers qualifying income and weakens coverage.
So ask early which income the program will use. A property that clears 1.00 on short-term income can come up short if the program defaults to the 1007 number.
How Do You Stress-Test the Projection Before Making an Offer?
Run the ratio at several revenue levels before you offer, not after. Treat the projection as a best case. Then ask how far revenue can fall before the file stops working.
Here is a modeled assumption, not a market fact. Suppose a projection produces coverage of 1.25x at your leverage. If the lender discounts that revenue by 20%, the ratio drops to 1.00x, which is right at the purchase floor. A further 5% miss leaves the file below it. A cushion that looks comfortable on paper can vanish after one adjustment.
Leverage moves the same number. A higher loan amount raises the monthly obligation, which lowers the ratio. That is why a 25% down payment often produces a stronger coverage number than the same property would at 20% down, and why a lender may hold weaker-ratio files to lower leverage.
The same logic applies to local conditions. 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. A strong projection means nothing if the property cannot operate as a rental.
Coverage below 1.00 is a separate path. Some select lenders in the network will review coverage below 1.00, but leverage and terms adjust, and that route usually rewards a stronger profile. Treat it as a structured exception, not a plan.
What Does the Rest of the File Need?
Beyond income and leverage, five items decide most STR files. These are typical ranges across the network, and each file is reviewed individually.
Credit. Short-term rental files typically want a 640 or better score. Across the wider network, most programs prefer around 660, and 700 or higher opens the strongest leverage tiers. A higher score can help pricing and leverage, but it does not lift the 75% purchase ceiling on STR.
Hosting experience. Lenders usually expect about 12 months of landlord or host experience before they give short-term income full credit. A first-time host can still buy, but the file may need a stronger profile or different structuring.
Reserves. Reserves are liquid funds held after closing. They vary by lender, leverage, loan size and transaction type. About 6 months of PITIA is common. Loans above $1,500,000 typically step up to about 9 months. A larger loan with seasonal income deserves a bigger cushion in your own plan anyway.
Loan size. Standard programs run up to $3,000,000. Above $2,500,000, the network generally holds to 30-year fixed structures. Smaller balances route through select lenders in the network.
Property type. Manufactured homes, log homes and barndominiums are not offered through the network’s DSCR programs. If the vacation cabin you love is a log home, the DSCR route is closed.
Some programs also differ on whether the down payment can be borrowed. A plan built entirely on borrowed funds can fail on that point alone, so confirm it before you commit to a contract.
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 Does the General Rule Break?
The 75% ceiling is a rule for typical files. A few situations change the picture.
- First STR with no history. Without actual income, the file leans on the projection and on your other experience. Expect more scrutiny, and expect the ratio to carry more weight.
- Refinance instead of purchase. Projections are mainly a purchase tool. A refinance generally leans on actual history, and leverage is capped lower, around 70%.
- Long-term rent fallback. If the program qualifies the property only on long-term rent, a strong vacation market may not show up in the number.
- Multi-unit. Two- to four-unit properties can qualify through the 1025 report, with the same short-term considerations applying.
- Entity ownership. Buying in an LLC is common, and it works subject to lender program eligibility, with entity documents and a guaranty added to the file.
No-ratio qualification exists only through select lenders, generally for borrowers who already own a primary residence. It is not a route to 15% down on an STR.
What Does Clearing 1.00 Actually Tell You?
It tells you the rent covers the payment on paper. It does not tell you the property makes money. The ratio compares income to PITIA only. Repairs, vacancy, management, utilities, cleaning and capital expenses all sit outside it. A short-term rental with a cushion of 1.10 can still lose money in a slow quarter.
That is the real investor decision. A DSCR loan answers whether the lender will finance the property. Your own budget answers whether you should own it. Put the two side by side before you commit.
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.
Key Terms Defined
DSCR: The debt service coverage ratio, found by dividing qualifying monthly rental income by the full monthly obligation.
PITIA: Principal, interest, taxes, insurance and any HOA dues, which together make up the monthly obligation in the ratio.
LTV: Loan-to-value, the loan balance as a percentage of the property’s value or price.
Reserves: Liquid funds you hold after closing, usually counted in months of PITIA.
Form 1007: The appraiser’s long-term rent schedule for a one-unit property.
Comp Set Strength: AirDNA’s score of how many similar listings support a projection and how closely they match.
How Do You Decide If You Can Qualify?
Work through these checks before you tour a property.
1. Confirm the program’s STR purchase leverage in writing, and plan for 25% down. 2. Check that your credit score meets the 640 minimum, and ideally 660 or better. 3. Count your hosting months against the 12-month expectation. 4. Run the ratio at the projection and at a discounted revenue level. 5. Total your cash: down payment, closing costs and reserves, not only the down payment. 6. Confirm the property is an eligible type and can legally operate as a rental. 7. Ask whether the program allows borrowed down payment funds, if that is part of your plan. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
If you fall short, the fixes are practical. A larger down payment lifts the ratio, a lower price shrinks the payment, and a stronger credit score can help leverage. Time as a host builds the history lenders want. The weakest spot in your file tells you which fix to use first.
Is 15% Down Ever the Right Move?
Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
For a long-term rental, putting less down preserves cash and can speed up scaling, but it costs coverage because the payment is higher. For a short-term rental, the question is mostly moot because the network caps purchase leverage at 75%. The more useful question is whether to put 25% down or 30%. The extra 5% lowers the loan and the monthly obligation, which can add cushion to the ratio. Against that, it ties up cash that could serve as reserves or fund furnishing and startup costs.
Investors who plan to scale often keep a reserve cushion above the minimum, because several seasonal months in a row can strain a thin account. Investors with one property and strong savings may prefer the larger down payment for a safer ratio. Neither choice is wrong. The right one depends on your cash, your credit and how much volatility you can absorb.
Frequently Asked Questions
Can I get 85% LTV on a short-term rental purchase?
Not on the short-term rental purchase product in this network, where leverage reaches up to 75% LTV on the strongest files. Select high-leverage programs that reach 85% LTV apply to standard long-term rental purchases for borrowers with roughly a 700 score or better. If you want 85% leverage, the property would need to be underwritten as a long-term rental.
Do I need hosting experience to buy my first short-term rental?
Lenders usually expect about 12 months of landlord or host experience before giving short-term income full credit. A first purchase can still be reviewed, but the file leans harder on the projection, credit and reserves. Experience does not have to be on this exact property.
What coverage ratio do I need?
The STR purchase floor is 1.00, and the refinance floor is also 1.00. Stronger ratios generally open better pricing and leverage. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted.
Does a bigger down payment guarantee approval?
No. More equity lowers the payment and can lift the ratio, but it never erases credit floors, reserve rules, leverage caps or property eligibility. Each file is underwritten individually, and nothing here is a commitment to lend.
Can I use projected income if the property has no booking history?
Yes, on a purchase, income can be based on an appraiser’s analysis or a data-service projection. Programs may discount that revenue before running the ratio.
Next Step
The short-term rental route works best when you budget for the real down payment, test the projection and confirm the property qualifies. The complete DSCR loans guide explains the wider program landscape. 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, with financing arranged through select lenders in its wholesale network across 41 markets, including Washington, D.C.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
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. AirDNA Help – Rentalizer Revenue Calculator
2. Rental Recon – Rentalizer accuracy
3. AirDNA – Rentalizer Agent blog
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 Meet DSCR Down Payment Source Requirements for a Rental Purchase · DSCR Purchase LTV vs Refinance LTV on a Rental Property · Putting 15% Down vs. 25% Down on a Short-Term Rental DSCR Loan
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
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.