Our DSCR program does not permit short-term rentals in New York City. That is a flat prohibition written into the Short-Term Rentals section of the guideline, and it is not waived by a strong DSCR, a large down payment, or a documented rental history.
The property itself is usually still financeable. What is not financeable is the short-term rental use and the short-term rental income. An NYC one-unit investment property that qualifies on a long-term lease is an ordinary DSCR file. The same property qualifying on nightly bookings is not a file we can open.
This page covers the rule as written, what it means if you already own an NYC property you intended to rent short-term, how the long-term path works on the identical asset, and the other New York restrictions that catch investors on the commercial side.
The rule, exactly as it appears
The Short-Term Rentals section of the DSCR guideline carries a list of conditions that apply to every short-term rental loan. One of those conditions is geographic.
There is no exception language attached. Elsewhere the same document writes carve-outs as "may be considered on a single loan variance basis" or "case-by-case." The NYC line has none of that. It sits inside a section that otherwise spells out LTV caps, DSCR floors and reserve add-ons — the negotiable things. This is not one of them.
Note also the sentence directly above it. Every short-term rental loan must be originated in accordance with federal, state and local regulations pertaining to short-term rentals. That is a separate and broader requirement, and it applies everywhere, not just in New York.
The city's own short-term rental law — registration, hosting rules, enforcement — is a legal question and it changes. We do not interpret it, and nothing here should be read as a summary of it. Ask your attorney. Our restriction stands on its own regardless of what the city's rules say in any given month.
What counts as a short-term rental under our program
This is where people get caught. The definition is broader than "I list it on Airbnb."
Three elements: a term under twelve months, variable duration, and often no traditional lease. A furnished corporate rental cycling through six-week tenants meets it. So does a unit rented by the month with no lease. Neither has to be listed on a booking platform.
On a two-to-four unit property there is a unit-count test:
So a two-family where one unit has a twelve-month lease and the other is furnished and rented by the week is a short-term rental property in its entirety. One of two units is 50%. The whole file is characterised as short-term. In New York City, that means the whole file is not permitted — not just the one unit.
A three-family with one short-term unit is under the threshold (one of three is 33%). A four-family with two is at 50% and is over.
The three separate places a listing hurts you
The guideline treats being listed on a short-term rental site as a fact with consequences in three different sections, and they are not the same rule repeated.
As qualifying income. Short-term rental income used to qualify triggers the whole section: 60% maximum LTV, minimum DSCR of 1.25, six additional months of PITIA reserves, and in NYC a prohibition.
As a short-term lease. Properties with a lease under twelve 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. That is a distinct and materially better outcome than being listed. The delisting is what buys it.
As a furnished vacancy. A fully furnished property with no lease in place is treated as vacant, which carries a 5% LTV reduction on refinances. The guideline attaches a condition: the property cannot be listed on any short-term rental website such as Airbnb or Vrbo. Furnished and unlisted is a vacant property. Furnished and listed is a short-term rental.
An active listing is not cosmetic. It is a characterisation trigger that moves your file between three different rule sets.
What is not restricted
The restriction is narrower than people assume.
New York City is not on our geographic exclusion list. The DSCR guideline names the markets where the product is unavailable outright — the Baltimore-Towson MSA, and certain areas of Philadelphia and Newark, New Jersey. New York City is not among them. Properties outside the United States, and in territories and commonwealths including Guam, Puerto Rico, the Virgin Islands, the Northern Mariana Islands and American Samoa, are also not permitted. Again, no New York.
New York also does not appear in the state-specific prepayment penalty table in Appendix A of the DSCR guideline, which names fourteen other states. The guideline is silent on any New York prepayment carve-out, and we are not going to invent one — ask us for the terms on your actual loan.
So: an NYC one-unit investment property, leased long-term to an unaffiliated tenant, borrowed for business purposes, is a normal file. The restriction is on a use and an income type, not on the city.
The alternative: qualifying the same property on a long-term lease
This is the path for an NYC owner. It is not a workaround — it is the program's main road, and the terms are better than the short-term terms would have been even if NYC were permitted.
How the income is calculated
On a purchase, we obtain Appraisal Form 1007 and use 100% of the gross market rent in the DSCR calculation. A buyer needs no rental history at all — the appraiser's market rent is the number.
On a refinance, we obtain both a current lease agreement and Appraisal Form 1007. Gross rent comes from the lesser of the lease or the 1007, with one exception: if the actual rent on the lease is above market rent, the amount used for qualifying cannot exceed 10% over the market rent on the appraisal. If the actual rent is above market but within 10% of it, the lease amount can be used.
An expired lease with language converting it to month-to-month once the initial term expires is allowed.
Compare that with how short-term rental income is treated — the 80% multiplier and the twelve-month documentation trail — which we cover in [how lenders discount Airbnb income on a DSCR loan](/blog/how-lenders-discount-airbnb-income-on-a-dscr-loan) and [the short-term rental 12-month income history requirement](/blog/short-term-rental-loan-12-month-income-history-requirement). On the long-term path, none of that machinery applies.
The two paths side by side
| Long-term lease (12 months or more) | Short-term rental | |
|---|---|---|
| Permitted in New York City | Yes | No |
| Maximum LTV | Per the eligibility matrix, up to 80% | 60% for Standard and Cross-Collateralized (Blanket) transactions using short-term rental income to qualify |
| Minimum DSCR | Program minimum by loan characteristics | 1.25 |
| Reserves | 3 months PITIA at DSCR at or above 1.0; 6 months below 1.0 | Base reserves plus an additional 6 months PITIA |
| Income haircut | None; lesser of lease or 1007, capped at 10% over market | Gross monthly rent multiplied by 80% |
| Inexperienced investors | Permitted, with separate conditions | Not permitted to qualify via short-term rental |
Every column on the right is worse, and in NYC unavailable regardless.
That 80 is the top of the Standard matrix — 700 minimum credit score, one to four units, loan amount up to $1,500,000, purchase or rate-and-term refinance, DSCR at or above 1.00. Your own ceiling depends on score, loan size and transaction type.
The credit floor
Where there are multiple borrowers or guarantors, rate and LTV are based on the guarantor with the lowest middle score, and all other guarantors must still meet 660. This is the DSCR figure. Our commercial program uses different numbers, and they do not cross over.
Converting an NYC short-term rental into a financeable file
If you own the property today and it is operating short-term, here is what actually has to change.
Sign a lease of twelve months or more with an eligible tenant. It must be fully executed by both the tenant and the borrower or guarantor as landlord; in the name of the borrower/guarantor or their verified property manager; at a rate and on terms consistent with those prevailing in the local market; on a form customary to the area, complying with applicable legal requirements including all required disclosures; and it must cover 100% of the square footage of the residential unit.
Use a genuinely unaffiliated tenant. An eligible tenant is any party other than a borrower or guarantor, any affiliate, any officer, director, executive employee or manager of the borrowing entity, and any family member — spouse, siblings, ancestors, lineal descendants — of any of those. A lease to your brother is not a lease for our purposes.
Get the timing right relative to the appraisal. This is the detail that costs people the most money.
Read that twice. A lease signed after the appraiser's inspection does not count. And you cannot fix it with a second inspection — re-inspection to verify occupancy is explicitly not acceptable. If you are converting an NYC short-term rental to a long-term lease in order to refinance, the tenant needs to be signed and in the unit before the appraiser walks through it.
Delist the property. As covered above, a live listing keeps the property in the short-term rental characterisation even where a lease exists, and the short-term-lease relief at 60% LTV is conditioned on the property not being listed.
The vacancy math on a 2-4 unit
Occupancy is defined by unit counts, not percentages, and the counts are not intuitive:
| Property | Units that must be occupied or leased |
|---|---|
| Single-family | 1 |
| Two-family | 2 |
| Three-family | 2 |
| Four-family | 3 |
Fall below that and the property is unoccupied or unleased, which carries a 5% LTV reduction on any refinance. The reduction does not apply to purchases. Separately, a DSCR below 1.00 is not permitted on vacant properties, and a two-to-four unit must have at least 50% occupancy.
For an NYC two-family coming off short-term use, both units need long-term tenants before a refinance — not one.
The other New York restrictions worth knowing
An NYC investor almost always runs into a second problem before the short-term rental rule: the property type.
Co-ops are not financeable on either program
Cooperative ownership is an unacceptable form of ownership under the DSCR guideline, and Cooperative Ownership is an ineligible property type on the commercial program. Given how much NYC housing stock is co-op, this is frequently the first and last question. Condominiums are eligible on DSCR, subject to a condominium questionnaire and insurance certificate from the association.
Mixed-use and 5+ unit buildings are not DSCR files
Mixed-use properties and multifamily of five or more units are both named ineligible property types on the DSCR program. The classic NYC asset — a storefront at grade with apartments above, or a six-unit walk-up — does not belong on the 1-4 unit investor program. It belongs on the small balance commercial side, where the second set of New York rules lives.
Rent-stabilized and rent-controlled buildings are ineligible on the commercial program
That language appears twice — once under the Multi-Family definition and once under Mixed-Use — so it reaches both. Regulatory status is checkable before anyone spends money on third-party reports: the guideline points to the state's Rent Regulated Building search at apps.hcr.ny.gov/BuildingSearch. Check it first.
Note the hedging in the second sentence and preserve it: outside New York, the lender reserves the right to review rent control and stabilization statutes for marketability impact. That is a discretionary review, not an announced ineligibility.
Individuals cannot borrow in New York on the commercial program
The commercial guideline prohibits loans to individuals in New York. Borrowing must be through an eligible legal entity — an LLC, LP, partnership, corporation or revocable trust, domiciled in the United States, in good standing, with natural person members. Separately, we will not lend where the borrower or guarantor resides in the residential component of a multi-family or mixed-use property of six units or fewer in New York or New Jersey.
Airbnb units are deemed vacant on the commercial side too
On multi-family and mixed-use, units utilized for Airbnb purposes will be deemed vacant. Multi-family units must be rented on a non-transient basis such that tenants consider their unit to be their permanent residence, and properties offering weekly or monthly housing are an ineligible property type. So the short-term rental problem does not disappear by moving up in building size — it changes shape.
A worked illustration
The figures below are invented for illustration only. Not a quote, and not drawn from any actual loan.
Suppose an investor owns a one-unit NYC condo, currently furnished and listed nightly, and wants to refinance. The 1007 shows market rent of $4,200. PITIA at the note rate would be $3,700. The short-term path is closed in New York City regardless of what its arithmetic would produce.
On the long-term path, with a signed twelve-month lease at $4,300 in place and the tenant occupying at the time of inspection: the lease is 2.4% above the 1007 market rent, inside the 10% tolerance, so $4,300 is usable. $4,300 divided by $3,700 gives a DSCR of roughly 1.16. Above 1.00, so three months PITIA in reserves rather than six, and the eligibility matrix rather than a 60% cap governs LTV.
The same asset, the same investor, the same month. The difference is the lease and the listing.
What this page does not do
This is not an approval, a rate quote, a term sheet, or a commitment to lend. Nothing here reserves pricing or leverage for you.
It does not interpret New York City's short-term rental law, its registration regime, or any enforcement action. Those are legal questions for your attorney, and city rules change independently of our guidelines. Our restriction stands on its own.
It does not address zoning, certificates of occupancy, building department violations, condominium or co-op board approval, or landlord-tenant law — those go to your attorney and the relevant municipal office — and it does not address the tax treatment of converting from short-term to long-term use, which is a question for your accountant.
It does not cover the short-term rental income haircut mechanics or the twelve-month history documentation in detail — those are separate pages, linked above.
It does not price your loan. Rate, prepayment terms and final leverage depend on the credit file, the appraisal, the transaction type and the loan amount.
And it does not promise that a property operating short-term in NYC becomes eligible the moment a lease is signed. Eligibility depends on the whole file — property type, ownership form, credit, occupancy at inspection, business-purpose certification. What it does establish: the short-term route in New York City is closed under our program, and the long-term route on the same property is open, better levered, and well defined.
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.