STR DSCR Requirements in 2026: LTV, Down Payment, Reserves, and Revenue Methods

What a DSCR loan is actually testing

A DSCR loan qualifies the property, not you. Instead of pay stubs and a DTI, the lender checks one thing: can the rental cover its own payment? That’s the DSCR ratio — gross revenue ÷ PITIA. Everything else on this list (LTV, reserves, FICO) exists to protect the lender around that core bet.

For short-term rentals the bet is riskier — revenue is seasonal, occupancy swings, and the city can change the rules — so STR programs carry slightly tighter terms than long-term-rental DSCR. If you’re weighing the two, see STR DSCR vs LTR DSCR. The requirements below are the 2026 baseline; specific lenders move the dials.

LTV and down payment

Most STR DSCR programs cap leverage at 75–80% LTV on a purchase, which means 20–25% down is the floor — and the best pricing usually starts at 25–30% down. Cash-out refinances are tighter, commonly 70–75% LTV.

• Purchase, strong file: up to ~80% LTV (20% down) is achievable but priced higher.
• Purchase, best pricing: 25–30% down (70–75% LTV) buys a lower rate and an easier DSCR.
• Cash-out refi: typically 70–75% LTV — expect to leave more equity in.
• Thin DSCR or sub-1.0: more down is the fastest fix — it shrinks PITIA and lifts the ratio.

Cash reserves and minimum FICO

Reserves

Reserves are liquid funds the lender wants to see after closing, measured in months of PITIA. For STR, 6 months of PITIA is the common ask — more than the 2–3 months typical of long-term-rental DSCR, precisely because nightly revenue is lumpier. Larger loan balances, multiple financed properties, or a thin DSCR can push this to 9–12 months.

Credit score

DSCR is property-based, but FICO still sets your pricing tier and sometimes your max LTV. A practical 2026 map of the bands:

The DSCR floor — and how the revenue is valued

Most STR lenders want a DSCR at or above 1.0×, with the best pricing at 1.20–1.25×. A growing set of programs allow sub-1.0× or no-ratio deals at a premium — useful when a strong property in a pricey market can’t quite cover PITIA. But the floor only means something once the revenue feeding it is one the lender accepts.

Form 1007 (appraisal route)

An appraiser completes a Single-Family Comparable Rent Schedule (Form 1007), increasingly with a short-term-rent addendum, from comparable nightly rates and occupancy. Because it’s from a licensed appraiser, nearly every DSCR lender accepts it.

Market projection (AirDNA/Rabbu route)

STR-specialist lenders accept a third-party data projection of gross annual revenue directly — faster and cheaper than waiting on an appraisal addendum, but only a subset allow it, and they scrutinize the comp count and radius. For the deeper trade-off, see AirDNA vs Rabbu vs the 1007 and how lenders qualify projected income.

If you have no operating history, that’s fine for many programs — a brand-new Airbnb can qualify on a projection. And ignore the 6-month seasoning myth: seasoning rules govern refinances, not whether a first purchase can use projected income.

Eligible property types (and the ones lenders flinch at)

STR DSCR programs are broadest on standard residential. The further you drift from a financeable 1–4 unit, the fewer lenders play and the tighter the terms:

• Single-family, 2–4 units, most townhomes — the core, widely financed.
• Warrantable condos — generally fine; HOA short-term-rental rules get checked.
• Condotels / non-warrantable condos — a specialist niche with higher down and rate; see DSCR on a condotel.
• Rural / unique / large-acreage — fundable but expect lower LTV and a thinner lender pool.
• Mixed-use, 5+ units — usually leaves DSCR for commercial financing.

The 2026 requirement tiers at a glance

Put together, here’s how the requirements stack from a baseline-qualifying file to a best-pricing one. Treat the numbers as illustrative ranges — every lender sets its own overlays.

Before you assume your file fits a column, run it. The feasibility check pulls the comp-based revenue, applies any legality haircut, computes the cap-adjusted DSCR at today’s rate, and shows which lenders’ floors you actually clear.