The Quick Read: An STR projection report earns an underwriter’s acceptance when it is an address-level forecast from a recognized data product, built on comparable listings that truly match your property, covering a full 12 months, and reconciled against the appraisal before the lender applies its own income discount. No single standard defines “acceptable,” so each program sets its own rules. Your job is to match the report to the program before you order it.
- A short-term rental has no lease, so the underwriter needs another proof of income: actual hosting history, a projection report, or the appraiser’s long-term market rent.
- Order a report for the specific subject property, not a market overview of the town.
- Check the comparable listings behind the number. Mismatched comps are a common reason a report gets discounted.
- The lender applies a haircut (a discount on gross projected income) before it divides by the monthly obligation.
- A passing coverage ratio is not profit. Vacancy, repairs, management, and utilities sit outside the calculation.
Why a Short-Term Rental Needs a Projection at All
A long-term rental comes with a lease, and the underwriter can read it. A short-term rental comes with a booking calendar that changes every week. The lender needs a defensible monthly income number, and the report is how a property with no track record gets one.
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.
Underwriters call the underlying test the debt service coverage ratio, or DSCR. It divides the property’s monthly income by its monthly obligation: principal, interest, taxes, insurance, and any HOA dues. That obligation is abbreviated PITIA. Personal income does not drive the ratio. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
Across the wholesale network Lendmire works with, the income evidence for a short-term rental falls into three buckets.
| Situation | Evidence used | What the underwriter does |
|---|---|---|
| Already operating as an STR | Platform, manager, or bank history | Reads 12 months of actuals |
| Purchase or no history | Address-level projection report | Discounts it, then runs the ratio |
| Weak STR market or thin data | Appraiser’s long-term market rent | Runs the ratio on ordinary rent |
A projection is the path for a property without history. It does not replace records you already have. If you own a property with a full year of booking data, the lender generally wants to see that data first.
One more distinction matters. The property’s history is different from your own hosting experience. For short-term rentals, programs in the network typically expect about 12 months of landlord or host experience from the borrower, subject to lender guidelines. A strong report does not waive that expectation.
What an Accepted STR Projection Report Contains
Underwriters accept reports that are specific, recent, and traceable. Think of the report as a file exhibit, so every field should be there and every field should make sense. No published rulebook lists the fields, but across many lenders the same items come up again and again.
| Field | Why it matters | Red flag |
|---|---|---|
| Subject address | Proves it covers your property | Town-wide summary only |
| 12-month revenue forecast | Gives annual and monthly income | Peak-season figures only |
| Occupancy and daily rate | Lets the lender test the logic | Rate shown with no occupancy |
| Comparable listings | Shows what the forecast rests on | Few comps, or ill-matched ones |
| Bedroom and bath count | Must match the property | Inflated sleeping capacity |
| Report date | Lenders want a recent pull | Stale report |
| Market grade or score | Some lenders set a floor | Weak score with no explanation |
Next, separate property-level reports from market-level tools. A property-level report starts from the address and weights the performance of nearby comparable listings into a forecast. A market-level tool shows how a whole area performs. Lenders usually want the first, and Lendmire’s piece Market Data Report Requirements For STR Loans covers that distinction in more detail.
AirDNA is the best-known source. Its Rentalizer product returns projected revenue, occupancy, and daily rate for an address, and lender customers use it alongside market grades. A screenshot from a free calculator is a different thing. Many programs name the product they accept, so ask before you pay for anything.
How to Order and Prepare It, Step by Step
The sequence below works on most files. Programs differ on details, so treat it as a working order of operations.
1. Pick the income path. Existing history means you gather statements. No history means you order a projection.
2. Ask the broker which product the program accepts. Doing this before you order saves a repeat purchase.
3. Order it for the subject address. Enter the exact bedroom count, bathroom count, and sleeping capacity. Do not enter amenities the property does not have.
4. Read the comps. Check each one against the audit in the next section.
5. Order it early. Many investors pull the report before making an offer and bring it with the quote request. A deal that fails on paper is cheaper to find out about early.
6. Pull it again if it goes stale. Lenders care how recent the report is relative to closing, and a long negotiation can age it out.
Who orders it varies. Some lenders pull their own, some accept a borrower-ordered copy, and some appraisers add their own market data. Ask your broker which route the program uses.
Build and Audit the Comp Set
Comps decide the number. A forecast built on the wrong comparable listings is only a guess dressed up as data.
Underwriters generally check that comps match the subject on location, condition, square footage, and bedroom and bathroom count. They also look for outliers. One unusually high earner in the set can pull the whole forecast upward, and a lender may strip it out.
Run this audit before you submit:
- Bedrooms and baths. A four-bedroom comp does not support a two-bedroom subject.
- Property tier. A luxury listing with a pool and hot tub is not a fair match for a basic bungalow.
- Distance. Comps from a different submarket may have different demand.
- Amenities. Count only what the subject truly has.
- Outliers. Flag any comp far above the rest and be ready to explain it or drop it.
If the set looks wrong, fix the inputs and rerun the report. Do not argue a bad set past the underwriter. A cleaner, more modest forecast usually survives review better than an optimistic one.
From Report to coverage figure
The lender takes the projected annual revenue and applies a haircut. It then converts the result to a monthly figure and divides by the full PITIA. Haircut sizes differ by program, and that is the main reason two lenders can produce different coverage numbers on the same property.
The loan size then comes from the lower of two tests. One is the loan-to-value cap, meaning the loan amount as a percentage of the property’s value. The other is the coverage test, meaning the largest loan at which the discounted income still clears the program floor. On many short-term-rental files, coverage is the one that binds.
Run the numbers on a modeled property. These are illustrative assumptions, not market data. Say the raw projection covers the monthly obligation about 1.40 times.
| Scenario | Income used | Modeled coverage |
|---|---|---|
| Raw projection, no haircut | Full forecast | About 1.40x |
| Mild haircut | Forecast less a modest discount | About 1.20x |
| Heavier haircut | Forecast less a larger discount | About 1.05x |
| Long-term rent fallback | Appraiser’s market rent | About 0.90x |
Look at the spread. The same property reads 1.40x on paper and 1.05x after a heavier haircut. Test your deal against the heavier case before you commit, not just the friendly one.
Notice the last row. At 0.90x, the long-term rent fallback sits below 1.00. For short-term rentals, the coverage floor in the network is typically 1.00 on purchases, and it is also 1.00 on refinances. A file below that line is not necessarily dead. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted, and qualification stays subject to lender guidelines, credit approval, and property review.
Here are the other typical parameters for this property type, always subject to lender guidelines:
- Purchase leverage: up to 75% LTV on the strongest short-term-rental files.
- Refinance and cash-out: around 70% LTV on short-term-rental collateral.
- Credit: a 640 minimum score is typical.
- Loan size: up to $3,000,000 on standard programs, with smaller balances routed through select lenders. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Our complete DSCR loans guide covers how these pieces fit together across property types.
Reconciling the Report With the Appraisal
The appraisal runs in parallel, and it does not use your projection. The appraiser values the real estate. Furniture, fixtures, equipment, and the hosting business itself are excluded. McKissock, an appraiser-education publisher, notes that the lender makes the final call on how income from any source is counted.
The standard appraisal rent form does not fit short-term rentals. Form 1007 is the single-family comparable rent schedule, and HousingWire reports that it was designed only to estimate long-term monthly rent. Nightly pricing, seasonality, cleaning and management costs, and local regulation have no place on it. HousingWire also reports that the practical fix is a narrative addendum for short-term rental income, specified in the engagement letter.
A Fannie Mae appraiser update, reproduced by the Nevada Real Estate Division, says Form 1007 documents estimated monthly market rent on a one-unit investment property. It adds that the form is only required when rental income is used to qualify. That is a contrast point, not a rule for DSCR files.
Class Valuation, an appraisal management company, describes the alternative as a short-term rental projected income analysis. Its elements are market-supported occupancy plus seasonal and event-driven pricing patterns.
What does this mean for you? Two numbers will land on the underwriter’s desk: the projection and the appraiser’s long-term rent. When the projection is far above the market rent, expect questions. Be ready to explain the gap, such as strong seasonal demand or a unit type that out-earns standard rentals.
Why Files Get Discounted or Rejected
Most problems are fixable once you know what to look for.
| Symptom | Likely cause | Fix |
|---|---|---|
| Report discounted heavily | Mismatched or outlier comps | Correct inputs and rerun |
| Report refused | Wrong product or market-level only | Ask which product the program takes |
| Coverage short of the floor | Heavy haircut on a thin forecast | Lower the loan amount or add equity |
| Report far above appraisal rent | No reconciling story | Document the demand drivers |
| Stale report | Long gap before closing | Pull a fresh one |
Operator experience helps here. On STR files, coverage on long-term rent assumptions often looks thin, while the property-level forecast clears more comfortably. The files that move smoothly usually run both scenarios before submission, so the broker already knows which number carries the loan.
A larger down payment lowers the monthly obligation and can lift coverage. It never erases leverage caps, credit floors, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
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.
What DSCR Coverage Does Not Tell You
Clearing 1.00 does not mean the property makes money. DSCR compares rent to PITIA and nothing else. Vacancy, repairs, management fees, utilities, cleaning, and capital expenses sit outside the ratio. Short-term rentals carry more of those costs than most long-term rentals.
Remember too that a projection is a model, not a booking calendar. Actual results can land above or below it. The AirDNA case study describes one lender that, before adopting the tool, turned away deals on conservative long-term projections, demanded larger down payments, and asked for 12 months of history. That is a vendor-published story, so read it as one lender’s anecdote and not a general accuracy figure.
Run your own cash-flow budget separately from the lender’s coverage test. 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. 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.
The Submission Package
Bring everything the underwriter is likely to ask for. A tidy package reduces back-and-forth.
- The property-level projection report, current and for the exact address.
- The comp list, with notes on any comp you dropped and why.
- Evidence the property can legally operate as a short-term rental, such as permits or licenses where they apply.
- Current insurance that fits short-term rental use.
- Entity documents, if the property will be held in an LLC, subject to lender program eligibility.
- For operating properties: platform exports, bank statements, or a property-manager statement covering 12 months.
- Proof of your hosting or landlord experience.
Where the General Rule Breaks
The steps above cover the common file. These edge cases bend them.
Two to four units. Appraisers use Form 1025, the small residential income property report, which pairs monthly rents with an operating income statement. They typically supplement it with nightly comp data or a narrative addendum for each unit. Part of the income may come from long-term leases.
Business income treatment. A lender can treat short-term rental income as business income instead of rental income. If it does, Form 1007 does not apply, and business-income underwriting takes over.
Weak short-term market. When STR demand is thin, the long-term fallback may be the number that clears the loan, and the projection becomes a footnote.
Thin comp sets. Unusual, oversized, or remote properties tend to get more conservative numbers. Some lenders stress-test against the off-season.
Rehab or construction takeout. After a rehab or build, a projection may size the permanent loan. Existing history is not available, so the report carries the file.
Ineligible property types. Manufactured homes, log homes, and barndominiums are not offered through these DSCR programs, regardless of how strong the projection looks.
Key Terms Defined
DSCR: the ratio of a property’s monthly income to its monthly debt obligation, with 1.00 where select programs start.
PITIA: principal, interest, taxes, insurance, and association dues, the full monthly cost the ratio divides into.
LTV: loan-to-value, the loan amount as a percentage of the property’s value.
Haircut: the discount a lender applies to gross projected income before running the ratio.
Comps: comparable listings used to build a forecast for the subject property.
FF&E: furniture, fixtures, and equipment, which an appraiser excludes from real estate value.
Frequently Asked Questions
Can I use any Airbnb calculator printout?
Usually not. Lenders typically name the product they accept and require it to cover the subject address. Ask your broker which report the program takes before you spend money on one.
Will the lender take the report’s number at face value?
No. Underwriters check the comps and apply a haircut before running coverage. The discount differs by program, which is why lenders can quote different ratios on the same property.
What if the property has no hosting history?
A projection report is the usual path. The borrower’s own experience still matters, and programs in the network typically expect about 12 months of landlord or host experience, subject to lender guidelines.
Does the appraiser’s rent schedule show my Airbnb income?
No. Form 1007 documents long-term monthly market rent, not nightly-rate income. An appraiser may add a narrative addendum for short-term income, but the appraisal values the real estate only.
What if my coverage falls short of 1.00?
You have options. A lower loan amount, more equity, or a cleaner comp set may lift the ratio. Select lenders in the network also take coverage below 1.00, with leverage and terms adjusted, subject to credit approval and property review.
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 mortgage broker, Lendmire arranges financing through select lenders in its wholesale network, with programs in 41 markets, including Washington, D.C. Bring your projection report and a rough budget to the first conversation, and the coverage math becomes much easier to read.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. AirDNA
2. McKissock — Form 1007 and short-term rental appraisals
3. HousingWire — Short-term rentals are breaking the appraisal playbook
4. Fannie Mae appraiser update (via Nevada Real Estate Division)
5. Class Valuation — Why Form 1007 can’t be used for short-term rentals
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 an STR DSCR Loan Treats a Management Company’s Cut · How to Qualify for a DSCR Loan in Massachusetts · How to Qualify for a DSCR Loan in Missouri
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- 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.