A short-term rental loan is a DSCR loan on an investment property you let by the night or week, based on the income the rental brings in rather than your personal income. We finance Shore rentals across Monmouth County and the Jersey Shore, for business purposes only: nobody on the loan may live in the property or use it as a second home.
See what the income supports, then talk the deal through.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Fidelity Residential is a direct mortgage lender licensed in New Jersey under a Residential Mortgage Lender License. Our New Jersey office is at 121 NJ-36, Suite 230, West Long Branch, and our licensed branch is at 1 Yorktowne Drive, Manalapan (branch NMLS ID #2103558).
A Shore rental raises its own questions: how a year of bookings that peaks in summer is counted, what insurance the property carries, and whether the town allows nightly letting. A licensed loan officer who works with Monmouth County investors can go through them with you before you make an offer.
Nightly income is seasonal and costs more to run than a lease, so programs count it in their own way.
A Shore rental earns most of its income in the summer and much less in the off-season. On a refinance, most programs average your booking statements over a full year, so the busy weeks and the quiet months count together. Some count only part of that average, to allow for the costs of running a nightly rental.
The counted income is compared with the full monthly payment: principal, interest, property taxes, insurance, including flood insurance if the property needs it, and any association dues. That payment is due in the off-season too, and a ratio of one or more is the usual floor.
Run the DSCR calculatorSome programs accept a projection: the appraiser’s short-term rent analysis, or a data provider’s forecast that meets occupancy and market tests, often counted at a discount. Others use the long-term market rent only.
A worked example, in words. Say you own a house near the beach that you let by the week in summer and by the night in the quieter months, and you want to refinance it.
The DSCR calculator does this arithmetic with your own figures, including flood insurance. It is an estimate, not a decision.
Because nightly income is seasonal, the most you can borrow against the value is usually a little lower than with a long-term lease. Business purpose investor loans are for investment property only.
Short-term rental rules are local and vary from town to town. Before you make an offer on a Shore property, check the town’s rules on renting by the night or week, and for a condominium, the association’s rules as well.
Where local rules require a permit or licence for short-term letting, the property must have one, and several programs ask for a third-party report confirming it. Ask your tax adviser about the taxes that apply to your rental income.
No tax returns or pay stubs. Most hosts and investors can start with these.
Want the detail? Our short-term rental loan guide sets out what the programs ask for and the documents to gather, our DSCR loan guide explains the ratio, and the DSCR calculator works it out from the monthly income and the costs you enter, including flood insurance.
Yes, as investment property for business purposes only. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), which holds a New Jersey Residential Mortgage Lender License; you can check it on NMLS Consumer Access (opens in a new tab).
Our office is at 121 NJ-36, Suite 230, West Long Branch, NJ 07764, and our licensed branch is at 1 Yorktowne Drive, Manalapan, NJ 07726. Call 732-686-9999 to talk with a licensed loan officer.
On a refinance, most programs average your booking statements over a full year, so the summer and the off-season count together, and some count only part of that average. The result is compared with the full monthly payment, which is due every month of the year.
No. A short-term rental financed this way is investment property and may not be used as your own second home, even for part of the year. For a vacation home you will use yourself, see financing a second home.
Where local rules require a permit or licence, the property must have one, and several programs ask for a third-party report confirming it. Rules vary from town to town, so check your town’s rules before you buy.
Yes, if the property needs it. Insurance is part of the full monthly payment the rental’s income must cover, and the DSCR calculator has a line for flood insurance.
In some programs, yes: they accept a projection from the appraiser’s short-term rent analysis or a data provider’s forecast that meets occupancy and market tests, often counted at a discount. Other programs use the long-term market rent only.
The counted income is compared with the full monthly payment. A ratio of one or more is the usual floor; a few programs want more, and a few allow less. The DSCR calculator works it out from the income and costs you enter.
Yes, for business purposes. A short-term rental loan can buy a property to let short-term, refinance one you already run, or take cash out of it. Your booking income, credit, assets and the appraisal are checked the same way.
On a purchase, most programs want you to have run a short-term rental or owned rentals before, and one program considers first-time investors on tighter terms. On a refinance of a rental you already run, your booking history is the main thing.
Yes. Title can be in your own name or in a company such as a limited liability company, and the owners sign as personal guarantors. We tell you which company documents to send.
Yes, a condominium can be financed this way where the town’s rules and the association’s rules both allow short-term letting. Check both before you make an offer.
A Shore house let to a tenant on a lease is financed as a long-term rental with a DSCR loan, and the most you can borrow against the value is usually a little higher than with nightly income. See DSCR loans in New Jersey.
Get a quote online, or call and talk the deal through with a licensed loan officer.
Business purpose investor loans are for investment property only.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, property, rent and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.