Mid-term rental DSCR loans finance the fastest-growing middle lane of rental investing: furnished stays of one to several months rented to travel nurses, insurance-displaced families, corporate projects, and relocating professionals. MTR operators routinely gross 1.3–1.8× a comparable unfurnished lease — but DSCR underwriting doesn’t automatically give you credit for that premium, and knowing how lenders actually treat MTR income is the difference between a clean approval and a surprise loan-size cut a week before closing.
Why investors are moving to mid-term
Three pressures push operators into the 30–90 day lane:
- STR regulation. License caps, primary-residence requirements, and night limits keep tightening in major metros — see the license regimes documented in our DC short-term rental rules guide and Chicago shared-housing rules guide. Stays over 30 days generally sit outside those ordinances.
- The LTR cash-flow gap. At current rates, many markets don’t pencil on an annual lease. A furnished premium can move a property from negative to positive monthly carry.
- Durable demand. Hospital staffing contracts, insurance relocations, and project-based corporate work generate medium-stay demand that doesn’t depend on tourism seasons.
The 1007 problem: which income number qualifies
Here is the honest center of MTR financing. When the appraiser inspects your property, they complete a Form 1007 rent schedule — an opinion of long-term, unfurnished market rent based on comparable annual leases. Most DSCR programs qualify the loan on that number.
Your furnished MTR income — the $4,000/month the property actually collects — generally does not replace the 1007 figure. Some programs will consider in-place lease agreements above market rent with documentation; the furnished premium above the rent schedule is discounted or excluded far more often than new MTR operators expect. Plan your leverage around the conservative number and treat anything better as upside.
Worked example: the same property, two income figures
- Purchase price $330,000, DSCR loan at 80% LTV = $264,000, 30-year fixed at an illustrative 7.75%
- P&I ≈ $1,891; taxes and insurance ≈ $470 → PITIA ≈ $2,361
- Actual furnished MTR income: $4,200/month in travel-nurse stays
- Appraiser’s 1007 long-term rent: $2,600/month
Qualifying DSCR = $2,600 ÷ $2,361 ≈ 1.10 — the file clears a 1.0 floor on the rent schedule alone, and the furnished premium is pure operating margin. That’s the clean version.
Now suppose the 1007 comes back at $2,200: DSCR = 2,200 ÷ 2,361 ≈ 0.93. The identical property, printing $4,200 a month in real income, now fails a standard DSCR test — and the fix is structural, not argumentative: reduce leverage until the ratio clears, or move to a no-ratio program.
STR vs MTR vs LTR: how lenders see each
| Short-term (STR) | Mid-term (MTR) | Long-term (LTR) | |
|---|---|---|---|
| Stay length | Under 30 nights | ~30–90+ days | 12-month lease |
| Income documentation | Platform statements, 12-month history | Lease agreements, staffing/insurance contracts | Executed annual lease |
| How DSCR programs credit income | Often discounted; history required | 1007 long-term rent is the default basis | Lease or 1007 — cleanest file |
| Local licensing exposure | Highest — caps, night limits | Generally exempt over 30-day stays | Standard landlord rules |
| Insurance | STR/hospitality-grade policy | Landlord policy with furnished contents rider | Standard landlord (DP3) policy |
| Vacancy/turnover risk | High-frequency turnover | Weeks between placements | Lowest turnover |
Underwriting diligence that’s specific to MTR
- Insurance must match use. A standard landlord policy that excludes furnished corporate stays is a claim denial waiting to happen. Get the furnished-rental use in writing on the binder.
- Verify the 30-day line in your ordinance. Most STR regimes stop at 30 days, but the boundary and enforcement vary by city — confirm before you underwrite the premium.
- Furniture is capex, not decoration. A competitive MTR setup runs real money per unit; it belongs in your all-in basis when you compute true cash-on-cash.
- Demand concentration. One hospital system or one insurer feeding your bookings is a single point of failure; underwrite vacancy weeks between placements into your carry.
Exit optionality: the quiet advantage of MTR underwriting
Because the loan qualified on long-term market rent, an MTR financed this way carries built-in downgrade protection: if medium-stay demand softens — a hospital system insources staffing, a corporate account ends — the property converts to an annual lease and the DSCR you closed at still holds. Compare that to an STR underwritten on peak nightly income, where the fallback lease can leave the ratio underwater. When you model an MTR purchase, price all three operating modes (furnished medium-stay, unfurnished annual, and sale) against the same PITIA; if two of the three clear, the leverage is defensible. That framing also travels: the same property can start as a furnished MTR and later refinance into a straight rental file with no restructuring, because the qualifying income never depended on the furnished premium.
When no-ratio is the right tool
If the rent schedule math fails but the deal works on actual furnished income, a no-ratio DSCR loan waives the ratio test entirely at reduced leverage — typically around 75% LTV — with modestly higher pricing. That structure exists precisely for strong-asset, unconventional-income files like MTRs. If you’re recycling capital out of a renovated MTR, the no-seasoning DSCR cash-out guide covers pulling equity at appraised value without a seasoning clock.
Standard MTR-eligible DSCR terms at Jaken Finance Group: 5.75%–10.5%, 30-year fixed or ARM, up to 85% LTV purchase / 80% cash-out in select markets, $50,000 minimum, roughly 14-business-day closings, entity vesting.
Price your MTR scenario
Bring the address, purchase price or current value, your furnished income history or projected placements, and the local long-term rent comp — we’ll tell you which income figure the file supports and at what leverage. Start here, or sanity-check the ratio yourself first with the DSCR calculator.
A 7.28% mortgage is context, not your coupon
The average 30-year fixed mortgage was 7.28% for the week of October 1, 2026. It was 7.03% the prior week, ending September 24. Source: FRED MORTGAGE30US.
That print is why many annual leases feel tight, and why a furnished premium looks attractive. Jaken Finance Group still quotes the rental loan from 5.75% to 10.5%. The file can land below or above 7.28%. Do not type the mortgage average into the DSCR calculator and call it your rate.
Owners’ equivalent rent, a national shelter index and not a lease, was 443.713 in August 2026. It was up 3.1% from 430.456 in August 2025. December 1982 is 100. The series is seasonally adjusted. Source: FRED CUSR0000SEHC. The index says shelter in the inflation basket kept rising. It does not replace the appraiser’s long-term rent schedule on your house.
Example: furniture the loan does not fund
This is an example, not a closed loan.
Purchase price $410,000. Furniture, linens, and kitchenware $22,000, paid in cash. The real estate loan is 80% of the purchase price, or $328,000. That is inside the purchase cap of 85% on a qualified DSCR file. The $22,000 of furniture is not added to the loan. It is cash on top of the down payment.
The example rate is 7.50% on a 30-year schedule, inside the 5.75%–10.5% band. Principal and interest is $2,293 a month. This illustration assumes $520 a month for taxes and insurance. That $520 is an assumption so the ratio can be shown. It is not a tax quote for any city.
Payment in the example: $2,293 + $520 = $2,813. If the appraiser’s long-term rent is $2,900, coverage is $2,900 ÷ $2,813 = 1.03. The loan can clear on the long-term rent.
If the furnished placements actually collect $4,100, that extra income is operating margin. It does not replace the $2,900 figure in a standard DSCR test. If the long-term rent instead comes in at $2,600, coverage is $2,600 ÷ $2,813 = 0.92, and the file fails the ratio even while the furnished stays look strong. The fixes are a smaller loan or a no-ratio DSCR loan at lower leverage. Cash-out, when the property is already owned, is capped at 80% in select markets. A rate-and-term refinance can reach 85%.
A complete DSCR file closes in about 14 business days. That is the rental clock. It is not the 7–10 business day window used on fix-and-flip and bridge.
Vacancy weeks and the power bill
Here is a calendar illustration, not a market vacancy rate. A guest stays 90 days, then the unit sits 14 days before the next placement. The cycle is 104 days. The empty share is 14 ÷ 104 = 13.5%. The occupied share is 86.5%.
If you underwrite $4,100 as if it arrives every month, you ignore that 13.5% gap. On this illustration, a year of cycles is not twelve full furnished months. Build the empty weeks into cash reserves even when the lender qualifies you on the lower long-term rent. The long-term rent is the loan test. The empty weeks are your operating test. Both have to work.
Power is part of that operating test when the host pays utilities. The U.S. city average electricity price was 19.6 cents per kilowatt-hour in August 2026, from 19.0 cents a year earlier. Source: FRED APU000072610.
Illustration only: a month at 900 kilowatt-hours costs 900 × $0.196 = $176.40 at the August 2026 price. A year earlier the same usage would have been 900 × $0.190 = $171.00. The difference is $5.40. The move is small, and it still belongs on the worksheet if your mid-term lease includes utilities. A tenant-paid meter takes the line off your DSCR, but only if the lease actually says so.
Documents that keep the 14-day close moving
Send the purchase contract or, on a refinance, the payoff and the current deed. Send entity documents and a landlord policy that names furnished stays. Send the appraiser’s long-term rent figure once you have it, plus your furnished leases. Add a short note on who pays utilities and how long units sit between guests. Send an insurance binder that matches the use, including contents if you own the furniture.
Call (833) 264-7776 with the address and both income numbers: the long-term rent you expect the appraiser to use, and the furnished rent you actually collect. Product terms for a standard rental file are on DSCR loans for investment property. The ratio check is the DSCR calculator. Use the long-term rent in that calculator first. Run the furnished rent only as a side column for your own cash flow.
Apply the empty weeks to the $4,100 illustration
Take the same 90-day stay and 14-day gap. The unit is occupied 90 of 104 days, or 86.5% of the cycle. If the furnished rate is $4,100 in an occupied month, the cycle average is 90 ÷ 104 × $4,100 = $3,548.
That $3,548 is still above the $2,900 long-term rent in the example, and it is still not the number the DSCR test uses. It is the number you use to see whether furniture, utilities, and the empty weeks leave you any cash after the $2,813 example payment. $3,548 − $2,813 = $735 before repairs, platform fees, and cleaning between guests. A tight $735 cushion disappears if two turnovers in a row need deep cleaning or if a guest damages the furniture you paid $22,000 to buy.
Keep the loan sized to the long-term rent. Keep the operating budget sized to $3,548, not to $4,100. Jaken Finance Group can close the rental loan in about 14 business days on a complete file. The empty weeks are your problem to reserve for, whether or not the ratio clears.