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.