The Oswald Group at eXp Realty
A short-term rental can be financed on what the property earns instead of what you earn, and that changes what a lender asks for. In September 2026 the options changed again, when Fannie Mae issued new rules for counting short-term rental income on a conventional loan.
The figures below are planning ranges as of September 2026, not quotes. Every lender prices its own program and terms move with the market. Use them to plan, then get a written quote from a licensed lender before you make an offer.
The two routes
There are two main ways to borrow against a Charleston short-term rental. One looks at the property. The other looks at you, and since September 2026 it can count part of the property's short-term rental income too.
| Loan | Qualifies on | What to know |
|---|---|---|
| DSCR loan | The property | Underwrites the rental income against the monthly payment instead of your tax returns. A popular route for investors. Privately priced, with no official rate benchmark. |
| Conventional | You | Underwrites your income and debts. Fannie Mae rules issued 2 September 2026 let lenders count part of the short-term rental income on a one-unit investment property, including projected income on a purchase. |
Fannie Mae's rules (Selling Guide update SEL-2026-08) count 50 percent of the gross short-term rental income, and the property must be legally permitted as a short-term rental. Unless you have at least 12 months of property management experience, that income can cover the property's own payment but cannot count as extra qualifying income. Lenders can use the rules now and must for applications dated on or after 1 November 2026.
The numbers
Planning ranges as of September 2026 for a short-term rental, which usually prices a little above a long-term rental. A lender's quote for your own file is the only number that counts.
Roughly high six percent to mid eight percent. That usually sits above a conventional mortgage, which averaged 6.95 percent for a 30-year fixed in Freddie Mac's survey of 17 September 2026, though the best DSCR quotes can match or beat it. An advertised rate under 7 percent almost always assumes top credit, twenty-five percent down and a prepayment penalty.
Twenty-five percent is the realistic planning number. Many lenders cap short-term rental loans at seventy-five percent of value, so the fifteen percent down programs advertised for long-term rentals often are not available.
Lenders generally want at least 1.0. Some short-term rental programs want 1.15 to 1.25 just to qualify, and the best pricing sits above 1.25. Programs below 1.0, and no-ratio programs, exist on worse terms.
A rental with a booking history can be underwritten on what it has actually earned. A new one has to be underwritten on a projection, and some lenders discount short-term rental income before they calculate the ratio. Ask which figure they will use and how they document it, because the answer moves the ratio.
The ratio
DSCR stands for debt service coverage ratio. It is the property's qualifying income divided by its payment, and you can run it yourself before a lender does.
Principal and interest, plus property taxes, insurance and any association dues. Use real quotes for tax and insurance, not the figures on the listing.
Not the best month and not the seller's number. For an existing rental that may be its booking history. For a new one it is a projection, and the lender has to agree with it.
At a $4,000 monthly payment, a lender asking for 1.25 needs to see $5,000 a month of qualifying income. At 1.0 it needs $4,000.
Re-run the ratio with income twenty percent below the projection. If it falls under 1.0, the rent no longer covers the payment in a bad year, and no loan changes that.
The dollar figures above are arithmetic for illustration, not a projection for any property.
Before your next showing
Our full eight-step underwriting checklist on one page, with space to write the numbers in. Print it and fill it in at the showing, while you are standing in the property and the agent is telling you what it could earn.
Download the ChecklistOne page · PDF · No sign-up
Vacation Ventures
A DSCR loan is only as sound as the income figure behind it. Through Vacation Ventures we manage short-term rentals in the same Charleston submarkets our clients buy in, so the income and expense figures in an analysis come from running properties, not from a calculator.
Financing is step four of the purchase sequence on the how to buy a short-term rental in Charleston page, and the full underwriting method is on the Charleston STR property analysis page. For how we work with short-term rental investors, start at the Charleston short-term rental investment specialist page.
If there is an address you are looking at right now, send it over. You will get the permit position, the revenue projection, the full cost to open, the financing options and the cash flow, whether or not it turns out to be a deal worth doing.
Book a ConsultationThe Oswald Group at eXp Realty. This page is investment insight, not tax, legal or financial advice, and we are not a mortgage broker or lender. Rates, down payments and coverage ratios shown are illustrative ranges as of 21 September 2026, not an offer or commitment to lend, and actual terms are subject to lender underwriting. Short-term rental rules differ by municipality and change often. Revenue projections are estimates, are not guaranteed, and will vary with management, seasonality and local regulation. Verify current permit availability with the municipality and confirm pricing with a licensed lender before you invest. Equal Housing Opportunity.