The Quick Read: The best provider for your situation depends on the property, your hosting history, and how much leverage you need, so no single ranked list can answer it. Lendmire is a mortgage broker, so it shops a wholesale network of DSCR lenders and matches the file to the program that fits. Here is what matters most:
- On short-term rental collateral, cash-out refinance leverage typically tops out at 70% LTV, subject to lender guidelines.
- Most programs expect a 640+ credit score and about 12 months of hosting history.
- Coverage starts at 1.00 on select programs, and the lender sizes the loan at the lower of the value limit and the rent-coverage limit.
- An unbuilt ADU generally adds nothing to value or rent. Its income counts only once it exists, is permitted, and is documented.
- Which rent figure the lender uses can change how much coverage the file shows, so it matters alongside the property itself.
You are not really shopping for a name. You are shopping for a program that treats your income, your renovation, and your timeline the way your deal needs. That is the job of a broker, and it is what the rest of this page explains.
DSCR Cash-Out Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Nov 5, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
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As of Nov 5, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
What Is a Short-Term Rental Cash-Out Refinance?
A cash-out refinance replaces your current loan with a larger one and hands you the difference in cash. On a short-term rental (a property rented by the night or week), a DSCR version qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
DSCR stands for debt service coverage ratio. You divide the rent used for lender review by the full monthly obligation: principal, interest, taxes, insurance, and any association dues, together called PITIA. A result of 1.00 means rent equals the payment. Anything higher means rent covers it with room to spare.
Investors use this loan for two common jobs. One is paying off a short-term rehab loan after a renovation. The other is pulling equity from a stabilized rental to fund an improvement, such as building an ADU (accessory dwelling unit, a small second dwelling on the same lot). Our complete DSCR loans guide covers the loan family. This page covers the short-term rental, renovation, and ADU case.
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.
How Underwriting Treats This Loan, Step by Step
Underwriting follows a fixed order. Knowing it tells you where a deal will pinch.
Step 1: The lender picks an income basis
On short-term rental files, programs use one of three bases:
- Documented platform history, typically about 12 months of statements.
- A market-data projection from a rental analytics service.
- The appraiser’s long-term rent as a fallback.
Programs differ on which they accept. Across a wholesale network you see all three. Some lenders in the network accept only documented history. Others will weigh a projection. The same property can clear coverage under one basis and fall short under another, which is why matching matters.
Step 2: The appraisal sets value and rent
The lender orders an appraisal, and that appraisal sizes the loan. It does not use your projected after-repair value. It values the property as it stands when the report is written.
Rent is trickier. Appraisers often report market rent on Form 1007, the single-family rent schedule. Fannie Mae’s Appraiser Update states that Form 1007 cannot estimate a short-term rental’s nightly fee and calls for monthly-lease comparables. McKissock, an appraisal education provider, adds that business income is out of scope for that form and suggests the income approach may suit short-term rentals better.
Here is the practical result. If a lender defaults to the 1007 figure, a strong Airbnb can look like an ordinary long-term rental on paper. Some lenders accept a narrative addendum with projected income. For a duplex through fourplex, the multi-unit equivalent is Form 1025.
One more point: a 1007 is an agency form. Its name gets borrowed in the investor world, but it does not govern a DSCR file. The lender’s own guidelines do.
Step 3: The coverage test
The lender runs the ratio using whichever income basis it accepts. Many lenders also apply an expense factor to gross short-term rental income before running the ratio, so a property that looks like 2.0x on gross bookings can land well lower. 1.00 is where select programs start. Stronger ratios open better pricing and leverage.
Be careful with one assumption. Clearing 1.00 is not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
Step 4: The loan is sized at the lower of two limits
The lender takes the lower of the value limit (the LTV cap) and the rent-coverage limit (the DSCR). Then the payoff comes out first: the hard-money or bridge balance, accrued interest, fees, and closing costs. What remains is your cash.
Strong coverage never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Step 5: Seasoning and the value basis
Seasoning is the waiting period between buying a property and refinancing it. About 6 months is the common expectation for cash-out across most of the network. Before seasoning clears, a lender may size the loan on your cost basis. After it clears, the appraisal sets value.
Why does that matter for a renovation? If you bought low and rehabbed, the cost basis may sit below the finished appraisal. Waiting for seasoning can unlock more proceeds. If your bridge loan matures first, you may need a payoff-only refinance now and a cash-out later. That means two sets of closing costs.
The Structures That Exist
Think in provider types rather than company names. Each fits a different job. The table below compares the types, not individual companies.
| Provider type | Best for | Income used | Renovation fit |
|---|---|---|---|
| Wholesale DSCR lender via broker | Short-term rental with history | Varies by program | Refinance after rehab |
| Large retail lender | Owner-occupied or standard rentals | Personal income | Weak for STR collateral |
| Hard-money or bridge lender | Short-term rehab funding | Property value | Strong, then exit |
| Construction or renovation loan | Funds drawn during the build | Plan and budget | Strong during the build |
Large retail lenders often struggle with short-term rental collateral because they underwrite personal income and use long-term rent. A broker gives you access to many wholesale lenders instead of one rulebook. Each lender prices, sizes, and documents differently, so one lender’s no may be another’s workable file.
Term structures vary too. The spine is the 30-year fixed. Extended terms such as 40-year and interest-only periods are available through select lenders in the network, and ARM structures exist for investors who want them. Interest-only can raise the coverage ratio, since the payment drops, but eligibility depends on the program.
Loan sizes reach up to $3,000,000 on standard programs, and balances below the standard-program minimum route through select lenders in the network. Reserves vary by lender, leverage, loan size, and transaction type. About 6 months of PITIA is common, with larger loans stepping up.
Renovation vs. ADU: Where the General Rule Breaks
A renovation and an ADU look similar on a budget. Underwriting treats them very differently.
A completed renovation. Once the work is done, the appraisal reflects the improved condition. An improvement may support a higher appraised value, depending on comps and underwriter review. The lender never simply accepts your after-repair number.
An ADU that exists. A finished, permitted ADU can add a rentable unit. How its rent is documented depends on whether it is treated as extra income on one property or as a second unit. Permits and a certificate of occupancy matter here. An unpermitted ADU is a collateral problem, not just an income problem.
An ADU that does not exist yet. Cash-out can fund the build. But the ADU’s rent counts only after it exists, is permitted, and is documented. So the loan is sized on the property as it stands today. If you want to count ADU income, you may refinance again after completion.
Agency programs treat ADU income cautiously too. HUD Mortgagee Letter 2023-17 says ADU rental income cannot be used as effective income to qualify for an FHA cash-out refinance. That is an owner-occupant policy, not a DSCR rule. It simply shows that agency loans restrict ADU income on cash-outs, while DSCR programs look at the property’s rent.
Sequencing: refinance first, renovate first, or bridge then refinance
Three paths exist, and each has a cost.
- Refinance first, then renovate. You pull equity on today’s value and spend it on the work. The loan is sized on the as-is appraisal, so proceeds may be smaller. You avoid the bridge and its payoff.
- Renovate first, then refinance. You fund the work another way, then refinance after the improvement. The appraisal may reflect the better condition, but you carry the interim financing.
- Bridge, then refinance. A short-term loan funds the project. A DSCR cash-out is the exit. Seasoning and the value basis decide how much you recover, so plan for the timeline.
For a true cash buyer, a delayed-financing path can sometimes allow a refinance before normal seasoning passes. Proceeds are generally capped near the price paid, and renovation spending is usually not returned. That varies by lender.
Where STR Leverage Differs From a Standard Rental
On short-term rental collateral, the network’s cash-out refinance leverage tops out lower than on a standard rental. For a standard rental cash-out, the ceiling sits around 75% LTV. For short-term rental cash-out, it is typically up to 70% LTV. A short-term rental purchase tops out at 75% LTV on the strongest files.
That gap changes the math. Say you owe a bridge balance and the appraisal comes in modestly. At 70% on short-term rental collateral, the payoff eats more of the available loan than it would at 75%. The same deal can pass as a long-term rental and fall short as a short-term one. The cost basis and the spread to appraised value both matter.
Other short-term rental expectations on most files: a 640+ credit score, about 12 months of hosting history, and a 1.00 coverage floor on refinances. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. A new host with no history leans on a market projection or a narrative appraisal, and that narrows the lender pool.
Projections can miss in either direction. They describe a typical property, not yours. Treat any projection as an estimate, and ask which income the lender will actually use before you apply.
Ineligible property types stay out regardless of income. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR 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.
How to Choose a Provider
Since no honest list can rank lenders, use this scorecard to judge any provider, including a broker.
1. Which income does it accept? Platform history, projection, or appraiser rent. Ask this first.
2. What leverage applies to short-term rental cash-out? Confirm the figure is for short-term rental collateral, not a standard rental.
3. How does it treat seasoning? Ask whether renovation receipts and the payoff change the value basis.
4. How does it handle an ADU? Permitted and finished, or still planned.
5. What are the reserve and credit requirements? These move with leverage and loan size.
6. Can the LLC borrow? Vesting in an LLC is common, subject to lender program eligibility.
7. Are there alternate paths? Sub-1.00 coverage or interest-only terms through select lenders, with terms adjusted.
A broker’s advantage is comparison. Lendmire works with a multi-state network of wholesale lenders, so one scenario can be matched against several rulebooks. The best program for your situation depends on your property type, credit profile, leverage need, and documentation. Programs change, and every file is underwritten individually.
Illustrative Walkthrough: Two Scenarios
These are modeled assumptions, not market data.
Renovation scenario. Say you finished a rehab on a short-term rental you hosted for about a year. Credit sits comfortably above 640. The appraisal supports value and the platform history supports income. At up to 70% LTV on short-term rental collateral, the bridge payoff comes out first. Coverage clears around 1.2x on the lender’s chosen income basis. Whatever remains after payoff, fees, and closing costs is your cash. If the appraisal lands light, the payoff consumes more of the loan and your cash shrinks. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
ADU scenario. Say you own a stabilized short-term rental and want to build an ADU. You refinance on the as-is value at the short-term rental ceiling. The ADU adds no rent in underwriting yet, so coverage is judged on the main house alone. After the ADU is permitted, finished, and documented, a later refinance could count its rent. That means a second closing.
Run your own figures through the illustrative calculator on the site, which gives an estimate only.
Documents to Prepare
Expect a lender to ask for some or all of the following:
- Purchase and rehab receipts, plus the bridge or hard-money payoff statement.
- Platform statements, or a market-data report if the program accepts one.
- Lease agreements for any long-term units.
- LLC documents, if the property is vested in an entity.
- Permits and a certificate of occupancy for an ADU or major renovation.
- Insurance written for short-term rental use.
Missing paperwork is a common friction point, so gather it before you apply.
Key Terms Defined
Seasoning: the waiting period between buying a property and refinancing it.
DSCR: the ratio of rent used for lender review to the full monthly property payment.
PITIA: principal, interest, taxes, insurance, and association dues combined.
As-is value: what the property is worth in its current condition, before planned work.
After-repair value (ARV): your estimate of the property’s worth after improvements, which a lender does not simply accept.
Non-owner-occupied: a property you do not live in, which is the setup DSCR loans are built for.
Form 1007: an appraisal form that estimates long-term market rent.
What the Decision Looks Like in Practice
Start with the exit, not the lender. Decide whether you are paying off a bridge, funding a build, or pulling cash from a stable property. Then check your hosting history and credit against the 12-month and 640+ expectations. Next, find out which income basis you will face, because that single answer often decides the loan.
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. Reach the team at 828-256-2183, or request a quote.
Frequently Asked Questions
Can I refinance a short-term rental without a full year of hosting history?
Sometimes. Most programs expect about 12 months of hosting history, so a newer host has fewer options. Some lenders in the network lean on a market projection or a narrative appraisal instead. That narrows the pool, and eligibility depends on the lender, the property, and the file.
Will the lender use my after-repair value?
No. The lender uses its own appraisal of the property as it stands. An ADU that is not yet built generally adds neither value nor rent.
Can one provider cover both the renovation loan and the refinance?
Occasionally, but it is not required. Many investors fund the work with a bridge or hard-money loan, then use a DSCR cash-out as the exit. A broker can line up the exit program while the renovation is underway, so seasoning and the payoff fit together.
How much cash can I take out on a short-term rental?
Cash-out on short-term rental collateral typically tops out at 70% LTV, while a standard rental cash-out tops out around 75%. The payoff of your existing loan comes out first, and the lender sizes at the lower of the value limit and the coverage limit. Terms are subject to lender guidelines.
Does the property need to be non-owner-occupied, and can an LLC borrow?
Yes, DSCR programs are built for non-owner-occupied investment properties. An LLC can often be the borrower, subject to lender program eligibility. Credit, reserves, and property eligibility are still reviewed.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. Fannie Mae Appraiser Update, June 2024
2. McKissock
3. HUD Mortgagee Letter 2023-17
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Short-Term Rental Cash-Out Refinance Lenders When Borrowing Through an LLC · Top Short-Term Rental Cash-Out Refinance Providers on a Free-and-Clear Rental · Short-Term Rental Cash-Out Refinance Requirements for an Out-of-State Investor
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.