No. On our DSCR program, a borrower who does not meet the investor experience definition cannot use short-term rental income to qualify. The guideline is one line long and it is absolute: inexperienced investors are not permitted to qualify via short-term rental.
That does not mean you cannot buy the property, or run it as a short-term rental after closing. It means the income the loan is underwritten on has to be long-term market rent, not projected Airbnb or Vrbo revenue. If the property pencils on long-term rent, the loan works. If it only pencils on nightly rates, it does not — not yet.
This page covers the experience definition exactly, the look-back it turns on, the other overlays that come with being inexperienced, and the path forward.
The rule, stated plainly
Two things follow that people miss.
First, the test is the rental term, not the platform. A nine-month lease is a short-term lease; an Airbnb listing with a variable nightly calendar is a short-term rental. They are handled differently, and we cover the distinction below.
Second, the bar restricts the income used in the debt service coverage ratio, not what you do with the property. Nothing forbids an inexperienced investor from owning a property they later operate short-term. It forbids us from counting nightly-rate income when we size the loan.
What "experienced" actually means
The test turns on ownership history, and there is a specific look-back window. The eligibility section states the definition twice, and the two statements are not worded identically.
| Formulation in the guideline | The test |
|---|---|
| Stated first | At least one borrower or primary guarantor must have owned a home or property for 12 months or more in the last three years |
| Stated second, option one | Borrower or primary guarantor must have a history of owning and managing commercial or non-owner-occupied residential real estate for at least 12 consecutive months in the most recent three years |
| Stated second, option two | Borrower or primary guarantor must have had ownership in three or more properties, each for at least twelve months, over the past 24 months |
Note what the second formulation requires that the first does not: owning and managing. Living in a house you own for 12 months is ownership; it is not managing income-producing real estate. That distinction is the whole reason the short-term rental door stays closed.
Note also the shape of the look-back. It is not "12 months at some point in your life." It is 12 consecutive months inside the most recent three years, or three properties held twelve months apiece inside a 24-month window. Experience goes stale — a landlord who sold everything years ago and has held nothing since is, by this definition, inexperienced today.
"First-time investor" and "first-time homebuyer" are different gates
This trips up more people than the experience definition does.
Two separate lines to be on the right side of:
- The first-time homebuyer bar. Owned no residential property at any point in the last three years, and you are not eligible for this program at all. Not at a lower LTV, not with more reserves.
- The experience test. Clear the first bar but not the experienced-investor definition, and you are eligible as an inexperienced investor — with the overlays below.
A third requirement stacks on the second, and is easy to overlook:
Read that carefully. It is present-tense and continuous: you must currently own a primary residence, and have owned it for at least a year. A borrower who sold their home six months ago and is renting while shopping for a first rental does not satisfy it, even if they owned that home for a decade. Neither does someone who bought their house four months ago.
The other overlays that come with being inexperienced
The short-term rental bar is the headline, not the only consequence. Plan around all of these at once.
| Overlay | What it means in practice |
|---|---|
| Minimum DSCR 1.0 | The property must at least break even against PITIA. DSCR below 1.0 is separately listed as not permitted for inexperienced investors. |
| Maximum LTV / LTC 75% | A ceiling, not a grant. The grid may already put you lower on credit score, unit count, loan amount and purpose. You get the lower of the two. |
| Maximum loan $1,000,000 | Against a standard program maximum of $2,000,000. |
| Own a primary residence 1+ year | Covered above. |
| Blanket mortgages not permitted | Portfolio and cross-collateralized structures are out; the portfolio product separately requires an experienced investor. |
Two deserve emphasis. The 75% LTV figure sits on top of the grid, not under it: on the standard grid a 660 score is limited to one unit and caps at 75% for purchase and rate/term at the $1,500,000 loan tier, 65% for cash-out. Higher scores open more room — a 700 score at that tier reaches 80% on purchase and rate/term — but the 75% inexperienced cap still binds whatever the grid would otherwise allow.
The DSCR 1.0 floor matters because the program does contemplate coverage below 1.0 for other borrowers, with six months of PITIA reserves. That option is closed to you, as is the portfolio route, which requires three properties minimum and an experienced investor.
Minimum FICO on this program is 660 for all guarantors, and with a single individual guarantor the middle score determines both rate and LTV. That applies to everyone, experienced or not.
Why the restriction exists
The logic tells you what changes when you become experienced.
A long-term lease is an asset characteristic. A signed twelve-month lease at market rent is largely a function of the building, the unit count, the neighborhood and the rent roll. Change the owner and the rent barely moves — an appraiser can estimate it from comparables on a Form 1007 without knowing who owns the property.
Short-term rental revenue is an operating characteristic. The same three-bedroom house grosses very different numbers depending on photography, pricing strategy, calendar management, minimum-stay rules, cleaning turnaround, review history and how fast someone answers a message at 11pm. Those are management outputs. They travel with the operator, not the deed.
That is why the program discounts short-term rental income even for experienced investors:
A 20% haircut hits gross short-term revenue before it reaches the coverage test, and a higher coverage floor sits on top. The mechanics are covered in [how lenders discount Airbnb income on a DSCR loan](/blog/how-lenders-discount-airbnb-income-on-a-dscr-loan).
Given that the income is already treated as fragile, the experience requirement is the second half of the same thought: if the number depends on operator skill, we need evidence of operator skill. A borrower with no record of running income-producing property has no such evidence yet. Not a worse borrower — an earlier one.
What the short-term rental terms look like once you qualify
These are the terms once an experienced investor qualifies on short-term rental income.
| Requirement | Short-term rental |
|---|---|
| Maximum LTV | 60% for all standard and cross-collateralized (blanket) transactions using short-term rental income to qualify |
| Minimum DSCR | 1.25 |
| Income haircut | Gross rent multiplied by 80% |
| Reserves | An additional 6 months of PITIA on top of the base requirement |
| Interest-only | Permitted; qualify on ITIA, with DSCR at program minimum plus .10 |
| Geography | New York City short-term rentals are not permitted; all loans must comply with federal, state and local regulation and restrictions pertaining to short-term rentals |
| 2-4 unit test | The property is deemed a short-term rental if 50% or more of the units are being used as short-term rentals |
Base reserves are three months of PITIA at DSCR 1.0 or above, six months below 1.0. The short-term rental add-on stacks on top of that.
Notice what that implies. Even at your most experienced, a purchase is underwritten on market rent from the appraisal. Operating history only becomes usable evidence on a refinance of a property you have owned and run for twelve months. That is the structural reason the path below works.
The actual path: qualify on long-term rent now
1. Underwrite the deal on long-term market rent before you make an offer
Take the property's realistic long-term rent — what a tenant on an annual lease would pay — and test it against PITIA at the loan amount you need. That is exactly how we will do it:
No haircut. Long-term market rent from the 1007 goes in at 100%, against a 1.0 coverage floor. Compare that to short-term rental treatment — 80% of gross against a 1.25 floor — and long-term rent is often the stronger qualifying path even for borrowers who could use either.
If the property clears 1.0 coverage on long-term rent at 75% LTV or below, the deal is financeable today. You can still list it nightly after closing; you cannot borrow against the nightly number. If it only clears on short-term projections, the honest answer is that this property does not fit this program for you right now.
2. Own and manage it for twelve consecutive months
The clock runs on ownership and management of non-owner-occupied residential or commercial real estate for at least twelve consecutive months inside the most recent three years. One property, held and operated for a year, starts satisfying that test.
If you intend to self-manage, there is a separate requirement:
3. Revisit on the refinance, not the purchase
Twelve months of ownership is also when short-term rental income documentation becomes available. So the moment to revisit short-term rental qualification is a refinance of the property you have been operating — not your next purchase, where market rent from the appraisal governs anyway. At that point you are tested against 60% LTV and a 1.25 coverage floor on 80% of gross.
Edge cases that catch people
A short-term lease is not a short-term rental. Properties with a lease under 12 months that are not listed on any short-term rental website such as Airbnb or Vrbo are limited to 60 LTV, but rental history is not required — a distinct treatment. A nine-month corporate or academic-year tenant, unit not listed anywhere, is in this bucket.
Furnished with no lease reads as vacant. A fully furnished property with no lease in place is treated as vacant, and a 5% LTV reduction applies; the property cannot be listed on any short-term rental website. If a furnished property does have a lease and current rent exceeds market rent, we revert to market rent.
The vacancy reduction is refinance-only. Unoccupied or unleased long-term rental properties take a 5% LTV reduction to the grid maximum on any refinance. It does not apply to purchases.
Half the units reclassifies a small multi. On a 2-4 unit property, if 50% or more of the units are used as short-term rentals, the whole property is deemed a short-term rental. A duplex with one nightly unit and one annual tenant is a short-term rental here.
Occupancy red flags. All loans here are business purpose only, and no property may be occupied by any borrower or guarantor. Flags include a borrower currently living rent free or renting their own primary residence, a subject that could reasonably function as a second home, documents showing the subject as a current primary residence, and a subject whose value significantly exceeds the value of the borrower's primary residence. A first-time investor buying a vacation-market property they will also use is exactly the profile these flags are written for. We reserve the right to decline any loan indicating the property is not intended exclusively for business purposes.
This answer is different on the commercial side
Everything above is the 1-4 unit DSCR program. Investor experience is defined differently on small balance commercial, and the tiering there does not map to these rules. If your deal is a five-plus unit apartment building, mixed-use, or another commercial property type, read [do you need experience to qualify for a commercial real estate loan](/blog/do-you-need-experience-to-qualify-for-a-commercial-real-estate-loan) instead. Do not carry the numbers on this page across.
What this page does not do
This is not an approval, a pre-qualification, a rate quote, or a commitment to lend. Nothing here reserves terms or pricing.
It does not tell you whether a property will appraise, what its 1007 market rent will come back at, or what its PITIA will be. Those come from the appraisal, the tax bill, the insurance certificate and the note rate on your file. It does not cover pricing, rate, points, prepayment penalty structures by state, credit event seasoning, asset documentation, entity formation, or the full eligibility grid. Each has its own rules.
The guideline is silent on how long an exception or variance review takes and on what any of it costs, so we have supplied no number for either. Where a term is discretionary — the single loan variance for properties owned six to twelve months — we have preserved that language rather than converting it into a promise.
Short-term rental regulation is local law. Whether a municipality permits nightly rentals at your address, what registration it requires, and how zoning treats it are questions for the municipality and your attorney. The same goes for tax treatment of rental income and entity structuring: ask your accountant and your attorney. We underwrite to the program; we do not advise on any of that.
Guideline DSCR V28 · Reviewed August 31, 2026
Published September 1, 2026 · Updated September 1, 2026
How to use this guide
This article is educational guidance, not an offer or commitment to lend. Rules, property facts, credit, leverage, documentation, and full underwriting still control any actual scenario.