A lease shorter than twelve months on a property that is not listed on Airbnb, Vrbo or any other short-term rental site is capped at 60% LTV — and in exchange, no rental history is required. That is the whole trade, and it is the single sentence most mid-term rental operators have never been told.
This is a real third category. It is not a standard annual lease, and it is not a short-term rental. Travel-nurse housing, corporate relocation units, thirteen-week contract lets and furnished mid-term rentals almost all land here. It has its own LTV consequence, its own documentation path, and it is spared several penalties that apply to true short-term rentals.
The three buckets, side by side
The difference between the three is not how long the occupant stays. It is the written lease term combined with whether the property appears on a short-term rental platform.
| Annual lease (12+ months) | Short-term lease, not listed | Short-term rental | |
|---|---|---|---|
| Lease term | 12 months or more, fixed | Less than 12 months | Less than 12 months, variable, often no lease at all |
| Listed on Airbnb / Vrbo | No | No | Yes, or income comes from platform stays |
| Maximum LTV | Per the eligibility matrix | 60 | 60 |
| Rental history required | Lease and Form 1007 | Not required | 12 months of statements on refinance |
| Income haircut | None | None stated | Gross rent multiplied by 80% |
| Minimum DSCR | Program minimum for the loan | Program minimum for the loan | 1.25x |
| Extra reserves | None | None stated | Additional 6 months PITIA |
Read the middle column carefully. It shares the 60% LTV ceiling with short-term rentals and almost nothing else. The 80% operating haircut, the 1.25x DSCR floor and the additional six months of reserves are written specifically to short-term rentals. The short-term-lease provision carries none of them.
Where the line actually sits: the listing test
The dividing line between the middle bucket and the short-term rental bucket is not the length of the stay. It is the listing.
Our short-term rental definition is properties in which the rental term is less than twelve months, relatively variable in duration — a short weekend, two weeks, several months — and which may not be subject to a traditional lease agreement. That definition is loose on purpose. The short-term-lease provision then carves out of it the specific case where there is a real written lease and the property is not listed on any short-term rental website.
So the test is practical:
- A written lease of a fixed term, tenant not sourced from a platform, unit not advertised on one. Middle bucket. 60% LTV, no rental history requirement.
- The unit appears on a short-term rental platform, or the income being used to qualify comes from platform stays. Short-term rental. All of the short-term rental rules apply, including the 80% haircut on gross rent and the 1.25x minimum DSCR. Our companion article on [how lenders discount Airbnb income on a DSCR loan](/blog/how-lenders-discount-airbnb-income-on-a-dscr-loan) walks that calculation.
The listing is what moves you. If you run a furnished mid-term portfolio and also keep the unit posted on a platform to fill gap weeks between contracts, you are not in the middle bucket. You are in the short-term rental bucket, with the haircut and the reserve add.
What the 60% ceiling actually costs
The standard eligibility matrix is meaningfully higher than 60% for a borrower with clean credit. For a single-property DSCR loan with a DSCR of 1.00 or better, a 700 credit score and a loan of $1,500,000 or less, the maximum LTV is 80 on a purchase or rate-and-term refinance and 75 on a cash-out refinance. At 660 — our minimum credit score, required of all guarantors — the same loan size runs 75 purchase and rate-and-term, 65 cash-out, on one unit.
Against that, 60% is not a rounding error. On a $600,000 property it is the difference between $360,000 of proceeds and $450,000 or $480,000.
The 60 is a ceiling, not a starting point. Every other restriction still applies underneath it. An inexperienced investor is separately capped at 75% LTV with a maximum loan of $1,000,000 and a minimum DSCR of 1.0, so that borrower is at 60 either way. A non-warrantable condominium carries a 10% LTV reduction with a maximum of 70% LTV/LTC. Our guideline does not spell out a stacking order between the 60% cap and every other reduction, and we are not going to invent one — assume the lowest applicable number governs.
The furnished overlay is a separate rule, and it bites differently
Almost every property in the mid-term category is furnished. Furnishing is governed by its own provision, and it interacts with the lease question in a way that catches operators out.
Three things follow.
First, a furnished unit sitting empty between contracts is a vacant unit. Not a seasonal unit, not a turning unit. Vacant. On a refinance that is a 5% reduction to the maximum LTV permitted by the grid. The reduction does not apply to purchase transactions. If your model is thirteen-week contracts with two-week gaps, the timing of your appraisal and your application relative to a signed lease is worth real money.
Second, furnished properties lose the over-market cushion. For an ordinary lease, gross rent used in the DSCR calculation comes from the lesser of the lease agreement or the appraisal Form 1007 — with one allowance. If the lease is higher than market rent on the appraisal, the qualifying amount cannot exceed 10% over market rent; if actual rent is above market but within that 10%, the lease amount can be used. The furnished-property rule has no such allowance. It says plainly: revert to market rent.
That matters because furnished mid-term rent is very often above unfurnished market rent — that is the entire economic premise of the model. A furnished travel-nurse unit renting at $3,400 against a 1007 market rent of $2,600 does not qualify at $3,400, and it does not qualify at $2,860 either. It qualifies at $2,600.
| Scenario | Lease rent | 1007 market rent | Qualifying rent |
|---|---|---|---|
| Unfurnished, lease 5% over market | 1050 | 1000 | 1050 |
| Unfurnished, lease 20% over market | 1200 | 1000 | 1100 |
| Fully furnished, lease over market | 3400 | 2600 | 2600 |
The first two rows are the examples printed in our guideline. The third row applies the furnished-property rule to illustrative figures we made up; the numbers are invented, the treatment is not.
Third, the no-listing condition is repeated here. The furnished-property provision independently states the property cannot be listed on a short-term rental site. You cannot furnish a unit, list it, and expect the mid-term treatment.
Documentation: what the middle bucket asks for, and what it does not
The relief in this category is real. For a short-term lease that is not listed, rental history is not required. Compare that to the short-term rental path on a refinance, which needs twelve months of third-party rental management statements or twelve months of borrower bank statements evidencing rental deposits, capped at 125% of market rent, with $0 used for any month without rent.
What you do need is a lease that satisfies our general lease requirements. These apply to every lease, and mid-term operators fail them more often than annual landlords do:
- Fully executed by both an eligible tenant and the borrower or guarantor as landlord.
- An eligible tenant is any party other than a borrower or guarantor, an affiliate, an officer, director, executive employee or manager of the borrowing entity, or a family member — spouse, siblings, ancestors, lineal descendants — of any of those.
- In the name of the borrower or guarantor, or their verified property manager, as landlord.
- Rental rate and terms consistent with rates and terms prevailing in the local market.
- On a form customary to the area, complying with all applicable legal requirements in all material respects, including required disclosures.
- Covers 100% of the square footage of the applicable residential unit.
- No lease term of three years or more.
- All tenants on leases must be natural persons. Exceptions for other entity types may be considered on a case-by-case basis.
- Rent-to-own arrangements and contracts for deed are ineligible.
Two of those deserve their own discussion, because they are where corporate and travel-nurse structures break.
The entity tenant problem
Corporate rentals and a large share of travel-nurse housing are leased to a company, not a person. The staffing agency, the relocation vendor or the insurance carrier signs the lease and places the occupant.
Our requirement is that all tenants on leases must be natural persons. Exceptions for other types of entities may be considered on a case-by-case basis. That is a real exception path, and it is deliberately hedged — it is not a rule you can rely on in advance, and we are not going to tell you it is automatic. If your entire rent roll is corporate leases, raise it at the front of the file, not at the end.
Where the placement allows it, the workable structure is a lease in the individual occupant's name with the agency as guarantor or payer, rather than the agency as lessee. That puts a natural person on the lease and keeps the corporate credit behind it.
The 100% of square footage problem
A lease must cover the entire residential unit. Room-by-room arrangements — three travel nurses each on their own lease for a bedroom in a four-bedroom house — do not satisfy that requirement, because no single lease covers 100% of the unit.
There is a narrow permitted structure for shared living, and it is written for student housing, not for contract workers. Properties leased to students sharing a common area such as a living area, kitchen or entryway are permitted only if all of the following are met: the lease is annual and includes a parent guarantee; all leases have the same start and end date; the property is located close to or near a local college or university, under five miles; and a 5% reduction in LTV applies. That structure requires an annual lease by its own terms, so it is not available to a sub-twelve-month arrangement.
Single room occupancy properties are separately an ineligible property type outright.
Month-to-month lands in the same place
There is a second route to 60% LTV that mid-term operators stumble into: month-to-month terms. Within the rental receipt requirements, an original lease or a new lease with month-to-month terms will be limited to 60% LTV.
Note what that provision does not say. An expired lease containing language that the agreement becomes a month-to-month tenancy once the initial term ends is expressly allowed as a current lease, and no rental receipt is required for it. The 60% limitation is written to a lease whose stated terms are month-to-month.
The receipt rules are worth having in one place, because they decide whether you need to produce bank records at all:
| Situation | Rental receipts required |
|---|---|
| Current lease provided | None |
| Expired lease with month-to-month language | None |
| Expired lease with extension or addendum showing a new rate | None |
| No lease available | 3 months of proof |
| Month-to-month, no original lease available | 3 months of proof |
| Expired lease, no month-to-month language and no extension | 3 months of proof |
| Short-term lease under 12 months, not listed | Rental history not required |
How to structure a mid-term operation to land in the better bucket
If your objective is leverage above 60%, there is one structure that gets you there, and it is not a clever one. It is a live, fixed-term lease of twelve months or more, in a natural person's name, covering the whole unit, on a property that is not listed on any short-term rental platform.
That is compatible with more mid-term business than operators assume:
Write a twelve-month lease with a break clause rather than a thirteen-week lease. A twelve-month term with an early termination provision is a twelve-month lease on its face. Whether your specific clause is enforceable, and what your state requires in it, is a question for your attorney.
Do not write the lease month-to-month. A month-to-month stated term is the 60% bucket by a different door.
Keep the occupant on the lease. Agency as guarantor or payer, occupant as lessee.
Take the listing down and keep it down. This is binary.
Sequence the lease before the appraisal inspection. A lease signed after the inspection will not be accepted and the unit is deemed vacant.
Expect the appraiser's 1007 to govern your qualifying rent if the unit is furnished. Underwrite your own acquisition at market rent, not at furnished rent.
If your model genuinely cannot support a twelve-month lease — pure travel-nurse contract work, insurance displacement, corporate relocation on ninety-day cycles — then price the deal at 60% LTV from the start and take the offsetting benefits. No rental history requirement. No 80% haircut on gross rent. No 1.25x DSCR floor. No additional six months of reserves. Base reserves are three months of PITIA for the subject property at a DSCR of 1.00 or better, six months if the DSCR is under 1.00.
For most mid-term operators, that is a better outcome than being pushed into the short-term rental bucket at the same 60% LTV with all four penalties attached. The middle category is worth landing in deliberately.
What this page does not do
This is not an approval, a quote, a rate sheet or a commitment. Nothing here reserves terms for a specific property.
It does not cover the short-term rental treatment in any depth. If your unit is listed on a platform, or you intend to qualify on platform income, the calculation is different and the companion article on discounting Airbnb income is the right starting point.
It does not resolve the earlier change-log entry setting a short-term rental DSCR floor at 2.0. That entry dates from December 2022; the later October 2023 entry and the current body text set the short-term rental floor at 1.25x, and the newer figure is the one we apply. That question does not affect the short-term-lease category at all.
It does not answer whether your particular staffing agency's lease form, corporate master lease, or room-by-room arrangement will be accepted. Entity tenants are a case-by-case exception, and a case-by-case exception is decided on a file, not on a web page.
It does not state a unit-count threshold for mixed mid-term and annual leasing in a 2-4 unit property, because our guideline does not state one.
And it does not give legal, tax or zoning advice. Lease enforceability, early-termination clauses, short-term rental ordinances, business licensing and the tax treatment of furnished rental income belong to your attorney, your accountant and your municipality.
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.