How New City Financial underwrites short-term and vacation rental financing
Short-term rentals earn revenue one night at a time, so a conventional lender that expects two years of steady lease history and personal tax returns rarely knows what to do with them. New City Financial underwrites this asset class on the property's own cash flow rather than your W-2s or returns — we build the picture from the unit's projected or documented nightly and seasonal income, net the operating costs a hosted property genuinely carries (cleaning, turnover, platform fees, management, and higher utilities), and measure the result against the loan payment as a debt-service coverage ratio. Deals that pencil at 1.0 DSCR or better on those numbers are our core business, which is what lets an individual investor, an LLC, or a partnership qualify a cabin, condo, beach house, or urban rental on the income it actually produces instead of on a personal-income file.
On terms, we lend up to 75% of value, on loan amounts from $75,000 to $50 million, with a 500 FICO floor and closings in under three weeks when the appraisal, insurance, and title come together. Fixed-rate structures over 3, 8, and 30 years — with no balloon payments — give short-term rental owners a debt cost they can hold steady even when nightly rates and occupancy swing with the season, so a soft shoulder month never threatens the loan. As a commercial lending firm we operate across 40+ states, and any rates shown here are illustrative only; your real pricing depends on the property, the market, your leverage, and your track record as a host or operator.
Vacation rental deals we finance
We finance the full range of short-term and vacation rental strategies: acquiring a turnkey, already-listed property with a booking history; buying a long-term rental or a tired second home and converting it to a nightly operation; and value-add plays where you renovate, furnish, and reposition an under-performing unit to lift both its revenue and its appraised value. Single cabins and condos, beach and lake houses, and small portfolios of nightly-rental units all fit the model, whether they run on a major booking platform or through direct, off-platform reservations.
On the refinance side, a rate-and-term refinance replaces a maturing or higher-cost loan and locks in a fixed payment, while a cash-out refinance pulls equity out of a seasoned rental to fund your next acquisition or a furnishing-and-upgrade budget. Every one of these loans is business-purpose, made to investors and operators — so we finance income-producing vacation rentals rather than a primary residence you live in, and a home you occupy full-time is not eligible. If you own or operate the property as a business, including short-term rental space in a mixed-use building you run, it can qualify. The fastest way to learn whether a specific listing pencils is a short conversation about its revenue history or projections, its operating costs, and your plan for the asset.
How to prepare a vacation rental loan file
Because we qualify the deal on the asset rather than on your personal income, the strongest applications lead with the numbers a short-term rental actually generates. For a property with a track record, that means the nightly-rate and occupancy history reflected in your booking-platform statements or a property-management report; for a conversion or a new listing, a defensible, market-based revenue projection carries the same weight. Pair that revenue picture with an honest operating-expense schedule — cleaning and turnover, platform and management fees, utilities, supplies, insurance, and taxes — so the net income we run against the payment reflects what a hosted property truly costs to operate. The clearer that operating story, the more precisely we can size the loan.
A few practical items keep the file moving toward a closing in under three weeks. Carry a landlord or short-term-rental insurance policy suited to transient occupancy rather than a standard owner-occupant homeowner policy; have the entity that will hold title — an LLC, a partnership, or your own name as an investor — ready with its formation documents; and be prepared for an appraisal that supports the value behind an up-to-75% loan-to-value request. Because these are business-purpose loans across 40+ states with a 500 FICO floor and a 1.0 DSCR or better standard, the underwriting conversation stays centered on the property and your plan for it. As a commercial lending firm we will confirm the loan sits inside our $75,000 to $50 million range and pair it with a fixed 3-, 8-, or 30-year structure that carries no balloon payment; any rates discussed along the way are illustrative only until your file is priced.
