The Quick Read: The right provider depends on how your income is documented and how long the property has operated as a short-term rental. Lenders that write this loan qualify the property’s rental income instead of your tax returns. Leverage on short-term-rental collateral is lower than on standard rentals, and the file is built around hosting history.
- On short-term-rental collateral, cash-out refinance typically tops out around 70% LTV, versus about 75% on standard rentals.
- Most programs expect a credit score of 640 or higher and about 12 months of hosting history.
- Refinance programs generally start at a 1.00 coverage ratio. A separate select-lender path goes below 1.00, with leverage and terms adjusted.
- Rent coverage can cap your loan before equity does, so test the ratio after the pull.
- No list can name the best provider for you. Your property, credit, and documents decide which program fits.
Why There Is No Ranked List Here
A ranked list of lenders would mislead you. Each lender sets its own rules for short-term rentals, and those rules change. The lenders that write this loan depend on your hosting history, credit profile, leverage need, and how the property is titled.
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
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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.
Lendmire is a mortgage broker, not a lender. It arranges DSCR investor loans through a wholesale network of lenders across 41 markets, including Washington, D.C. A DSCR loan is a mortgage that qualifies primarily on the property’s rental income covering the payment, subject to lender guidelines. That is the “non-traditional income” in this topic, and the complete DSCR loans guide covers the basics.
A broker’s job is matching. You bring the scenario, and the broker sends it to the programs most likely to fit. This article shows what those programs look for, so you can judge any provider, including a broker.
What “Non-Traditional Income” Actually Means
It means income that is not a W-2 paycheck or a tax-return figure. In the non-QM world, two products fit that description, and they work in opposite ways. Non-QM means a loan that falls outside standard consumer-mortgage boxes.
A bank-statement loan qualifies the borrower by reviewing personal or business deposits. HousingWire’s non-QM guide notes that these lenders review 12 to 24 months of actual deposits. They suit self-employed borrowers whose deposits tell a stronger story than their tax returns.
A DSCR loan qualifies the property. It does not use your debt-to-income ratio or personal income. It asks whether the rent covers the payment. That suits an investor whose returns are heavy with write-offs.
Neither product means “no documentation.” A DSCR file still documents the property’s income, pulls credit, and checks reserves. The documents just point at the property instead of your paycheck.
One more option sometimes comes up: a second-home loan for an Airbnb. It rarely works, because second-home rules limit how much you can rent the property out. A genuine short-term rental belongs in an investor program.
How Underwriting Treats Short-Term Rental Income
Underwriters treat short-term rental income with more caution than long-term rent. Revenue swings by season, and a month of strong bookings proves little. So the file needs an income figure that survives scrutiny. Here is how it runs, step by step.
Step 1: Pick the income method
Programs generally use one of three income sources. The first is trailing-12-month income, meaning what the property actually earned over the last year of operation. The second is the appraiser’s market-rent figure. The third is a projection from third-party market data.
Each source can produce a different loan size on the same property. A refinance on an operating rental leans toward actual history. A purchase has no history, so it leans on projections or appraisal.
Step 2: Understand the appraisal limit
Most DSCR appraisals include a rent schedule, called Form 1007 for one-unit properties. Freddie Mac’s rent schedule form is the standard example. It is built around market rent for a lease. Fannie Mae’s appraiser guidance says the form needs monthly-lease comparables and cannot estimate nightly short-term rates.
This is the appraisal problem for short-term rentals. A property can clear 1.00 on Airbnb income and fall short on paper if the program defaults to long-term rent. Two to four unit properties use a different appraisal form, the 1025. The same limit applies.
These forms are appraisal tools only. They do not set DSCR program rules. The network’s program parameters do that.
Step 3: Apply an expense factor
Most lenders do not count gross short-term revenue at face value. Operating costs run higher than on a long-term lease, so they trim the income before running the ratio. The size of that trim varies by lender and program. Ask about it up front.
Step 4: Divide by the full payment
The DSCR is the rent used for lender review divided by the full monthly payment. That payment is principal, interest, taxes, insurance, and any HOA dues, together called PITIA. Some analytics publishers describe the ratio with net operating income over debt service, as AirDNA’s DSCR explainer does. The programs in the network use the rent-over-PITIA version.
Clearing 1.00 does not mean the property makes money. Repairs, vacancy, management, utilities, cleaning, and furnishing all sit outside the calculation. Treat the ratio as a lender test, not a profit forecast.
Step 5: Size the loan on the tightest test
Three tests set the loan amount. They are seasoning, rent coverage, and the LTV tier. Whichever is tightest wins.
Seasoning is the waiting period between buying a property and refinancing it. About 6 months, counted from the deed recording, is the common expectation across the network. Seasoning is lender policy, not law.
Step 6: Net out the cash
Cash to you is the new loan minus the payoff of the old one, closing costs, and any holdbacks. Reserves are separate. They are liquid funds the lender wants left over after closing.
The Program Numbers for Short-Term Rental Cash-Out
Across the wholesale network, these are the typical ranges, subject to lender guidelines. Programs change, and every file is underwritten individually.
| Factor | Short-term rental | Standard rental |
|---|---|---|
| Cash-out LTV | Up to 70% | Around 75% |
| Purchase LTV | Up to 75% | 75%-80% typical |
| Credit score | 640+ | About 660 typical |
| Hosting history | About 12 months | Not applicable |
| Coverage | 1.00 on purchases and refinances | 1.00 where select programs start |
Loan sizes reach up to $3,000,000 on standard programs. Balances below the standard-program minimum route through select lenders in the network. Above $2,500,000, the network generally holds to 30-year fixed structures. Reserves vary by lender, leverage, loan size, and transaction type. Around 6 months of PITIA is common, and larger loans typically step up from there.
A bigger down payment or more equity lowers the payment and can lift the ratio. It never erases leverage caps, credit floors, or reserve rules. The strongest files clear both tests: enough equity and enough rental coverage.
Not every property qualifies. Manufactured homes, log homes, and barndominiums are not offered in these programs.
A Worked Example: Equity Versus Coverage
This example is illustrative, not a quote, and the inputs are modeled assumptions. It uses percentages and ratios only.
Say you own a short-term rental with a well-documented trailing-12-month history. Your existing loan balance is 50% of the property’s appraised value. The program caps short-term-rental cash-out at 70% LTV. The equity test alone leaves room for a pull of up to 20% of value, before closing costs and holdbacks. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Now run the coverage test. Say your qualifying income against the current payment produces roughly 1.35x. Pulling the full 20% raises the loan, and the payment rises with it. The ratio might slide to around 1.05x. That still clears a 1.00 floor.
Change one input. Suppose the lender trims your income more heavily, or the appraisal defaults to long-term rent. The post-pull ratio could land below 1.00. Then equity is no longer the limit. Coverage is, and the loan shrinks to whatever amount keeps the ratio where the program wants it.
A path below 1.00 exists, available through select lenders in the network, with leverage and terms adjusted. Expect a lower loan-to-value and different terms on that route.
The lesson is simple. Test the ratio after the pull, not before. Investors who size cash-out from equity alone can get surprised at the coverage step.
Structures and Variations
The spine of the network is the 30-year fixed loan. Several variations sit around it.
- Extended terms. 40-year structures are available through select lenders in the network. They lower the payment, which can help the ratio.
- Interest-only periods. Also available through select lenders. They reduce the early payment, which helps coverage, though the balance does not pay down during that period.
- Adjustable structures. ARM options exist for investors who want them.
- Prepayment penalties. Many DSCR loans carry one. The usual structure is a declining charge over several years, and some programs let you shorten the period at an added cost. If you refinance often, this term matters as much as the leverage cap.
- Entity ownership. Many investors hold the rental in an LLC. Subject to lender program eligibility, an entity borrower can be accepted, and entity documents join the file.
Where the General Rule Breaks
The 12-months-of-history rule is the norm, but several situations bend it. Treat these as paths to discuss with a broker, not promises.
Under 12 months of hosting
A property that has hosted for only 3 or 4 months does not yet have the history most refinance programs expect. Some lenders fall back to the appraiser’s long-term rent. Others use a market-data projection. The same property can produce very different loan amounts under each method.
A recent conversion from long-term rental
Say you rented a house on annual leases for years and started hosting recently. The long-term lease history does not count as hosting history. Some programs will size the loan on market rent, then revisit after a full year of short-term income. Others want the full year first.
Paid-off properties
A property with no loan is the simplest equity picture, but the coverage test still applies. The new loan creates the whole payment. Size the pull so the ratio holds, not just so the LTV fits.
Co-owned and entity-held properties
Titling affects who signs and which documents the lender needs. Partnership agreements, entity filings, and guarantor information can all enter the file. Discuss ownership structure before you apply, since each program handles it differently.
Local rules and HOA limits
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. If a rule bars short-term stays, that income cannot be counted. A lender can only underwrite income the property may legally earn.
Borrowers whose strength is personal income
If your personal deposits are stronger than the property’s earnings, a bank-statement loan may fit better. That is a different product, and a broker can tell you whether it is worth comparing.
How to Judge Any Provider
Whether you work with a broker or call lenders directly, the same questions separate good fits from bad ones.
1. Which income method will the file use? Trailing-12-month, appraisal rent, or projection. Get the answer before you pay for an appraisal.
2. How is the income trimmed? Ask what expense factor applies to short-term revenue.
3. What is the leverage cap on your collateral? Short-term rentals sit lower than standard rentals. Confirm which number applies to you.
4. What does seasoning look like? Ask how it is counted and what it is measured from.
5. How much do you need in reserves? Reserves vary by loan size and leverage. Ask for the number on your file.
6. What is the prepayment structure? Know the length and the cost of shortening it.
7. Will the ratio hold after the pull? Ask the provider to run it at the loan amount you actually want.
8. How many lenders does the provider shop? One lender shows you one set of rules. A broker comparing several can match your scenario to the program built for it.
A broker is paid by the lender or by the borrower, depending on the file. Ask how, and compare the full terms either way. No provider, broker or lender, should promise an outcome before reviewing your property.
What to Prepare
For an operating short-term rental, expect to assemble these items.
- Platform earnings exports from Airbnb or Vrbo, covering the full history.
- Bank statements that match the deposits shown on the platforms.
- A trailing-12-month profit-and-loss statement.
- Entity documents, if the property sits in an LLC.
- Proof of insurance and current mortgage statements.
- Evidence of reserves.
Run all rentals through one account where you can. Clean, matching records make the income figure easier to defend. Lenders want actual platform statements, not a dashboard screenshot.
Underwriters generally average the full year instead of using peak months. Plan for a figure that reflects your slow season.
Key Terms Defined
DSCR (debt service coverage ratio): the property’s rent used for lender review divided by its full monthly payment, a measure of whether the rent covers the loan.
PITIA: principal, interest, taxes, insurance, and any HOA dues, the full monthly payment used in the ratio.
LTV (loan-to-value): the loan amount as a percentage of the property’s appraised value.
Cash-out refinance: a new, larger loan that pays off the old one and pays you the difference.
Seasoning: the waiting period between acquiring a property and refinancing it.
Hosting history: the length of time a property has operated as a short-term rental, shown on platform statements.
Non-QM: a loan that sits outside standard consumer-mortgage guidelines, including DSCR.
Trailing-12-month income: the income a property earned over the most recent 12 months of operation.
Frequently Asked Questions
Can I get a short-term rental cash-out refinance without traditional personal-income documentation?
Yes, on a DSCR program. The loan is reviewed primarily on the property’s rental income covering the payment, subject to lender guidelines. You still document the property’s earnings, and the lender still checks credit and reserves. Personal income documentation is not the focus.
How much can I pull out of a short-term rental?
Typically up to about 70% LTV on short-term-rental collateral, versus around 75% on a standard rental. Rent coverage can lower that amount. The loan is sized on the tightest of seasoning, coverage, and the LTV tier.
Do I need 12 months of hosting history?
Most programs expect about that much. With less, some lenders size the loan on the appraiser’s long-term rent or a market projection, usually producing a smaller loan. Ask a broker which programs in the network fit your timeline.
Does clearing a 1.00 ratio mean the property cash flows?
No. The ratio compares rent to the full payment only. Repairs, vacancy, management, utilities, cleaning, and furnishing all sit outside it. Clearing 1.00 means the lender’s coverage test is met, not that you are profitable.
What credit score do I need?
A short-term rental file typically needs a 640 or higher. Standard rentals generally want around 660, and some programs reach lower. Scores of 700 or more open the strongest leverage tiers, subject to lender guidelines.
The 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. The calculator on the site gives an illustrative estimate only, and loan terms remain subject to lender review and approval.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. Recognized as a Scotsman Guide Top Mortgage Workplace in 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. HousingWire: Non-QM Loans Guide
2. Freddie Mac: Single-Family Comparable Rent Schedule
3. Fannie Mae: Appraiser Update June
4. AirDNA: Debt Service Coverage Ratio
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: 5 Short-Term Rental Cash-Out Refinance Options in a City With New Short-Term Rental Rules · Where to Get a Short-Term Rental Cash-Out Refinance as a Foreign National Investor · When a Short-Term Rental Cash-Out Refinance Makes Sense With a 30-Year Term
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.