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Long-Term Rental Financing

Loans for Long-Term Rental Properties

A 12-month lease is the simplest income basis a lender can work with. If your property is leased long-term, or you’re buying one to hold that way, financing tends to be the most straightforward path we handle.

The Simplest Income to Document

Why Long-Term Rentals Are the Cleanest Underwrite

Every other property type on this site (Airbnb, Vrbo, Furnished Finder, Booking.com, mid-term rentals) involves some version of turning platform revenue into a defensible income number. A long-term rental skips that step entirely.

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A Lease Is Direct Evidence

A signed 12-month lease at a fixed monthly rent is the strongest, simplest income documentation a lender can ask for. No projections, no platform exports, no seasonal haircuts.

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Predictable, Not Seasonal

The rent is the rent, every month, for the term of the lease. There’s no summer peak and winter trough to account for, which simplifies the DSCR calculation considerably.

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Faster Underwriting

Fewer moving parts usually means a faster file. Less back and forth on income treatment, fewer conditions tied to platform data or market projections.

What is a rental income loan? A rental income loan, also called a DSCR loan (Debt Service Coverage Ratio), qualifies on the property’s rental income rather than your personal W-2 or tax returns. For a long-term rental, the lease’s monthly rent is compared against the full loan payment (principal, interest, taxes, insurance, and any HOA dues). A ratio at or above 1.0 means the rent covers the payment.
Income Documentation

Qualifying With Long-Term Rental Income

The documentation path here is simpler than any other property type, and there are really only two scenarios: you already have a tenant, or you’re buying and haven’t leased it yet.

1

Existing lease

A current, signed 12-month lease at fixed monthly rent is used directly. No haircut, no projection. The lender compares that rent against the loan payment to calculate DSCR.

2

Vacant or new purchase

If the property isn’t leased yet, most lenders use a market rent estimate from the appraisal (an appraiser-completed rent schedule) as the income basis. This is standard practice for long-term rental properties, not a special exception.

3

Multi-unit properties

For a 2-4 unit property, each unit’s lease (or market rent, if vacant) gets totaled to determine the property’s overall income for the DSCR calculation.

Your personal income, W-2, and tax returns aren’t part of the income qualification. Credit score and reserves still matter, and requirements vary by lender.

At a Glance

  • Simplest income documentation of any property type
  • Lease or appraiser rent schedule as income basis
  • LLC closing available
  • 20 to 25% down payment
  • 660+ credit score preferred
  • No property cap
  • 1-4 unit properties
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Choosing a Strategy

When a Long-Term Lease Makes More Sense Than an STR

Not every property should be a short-term rental. A few situations where a long-term lease is often the better call:

  • The market has restrictive or banned short-term rental rules, and STR income can’t be used to qualify anyway
  • You want the simplest possible ownership experience, with minimal turnover and management
  • The property or HOA doesn’t allow short-term rental use
  • You’re prioritizing predictable, steady income over the higher (but more volatile) revenue ceiling of an active STR
  • You’re transitioning a property out of active STR management and want a simpler hold
Loan Requirements

What the Loan Requires

Down Payment

20 to 25 percent for a purchase. Cash-out refinances go up to 70 to 75 percent LTV depending on the lender.

Credit Score

660 or above preferred. Some lenders go lower with rate adjustments.

Income Evidence

Signed lease, or an appraiser rent schedule if the property’s vacant at closing.

LLC Closing

Available at most lenders. Standard entity documents required: Articles of Organization, EIN, operating agreement.

Reserves

Typically 3 to 6 months of PITIA in liquid reserves at closing.

What You Don’t Need

W-2 income, tax returns, or personal debt-to-income ratio. Qualification runs on the property.

Have a leased property, or buying one to hold long-term?

Submit your scenario and we’ll walk you through the numbers, same business day.

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