Vermont taxes a rental differently from a home its owner lives in. Rentals and second homes pay the nonhomestead education tax rate, which is often the largest part of the bill on a high-value Stowe or Burlington property.
In short: LendingStreet offers jumbo DSCR loans of about $1.5M to $5M+ on Vermont rentals with 1 to 8 units, qualified on the property's rent with no W-2s or tax returns. Nonhomestead education taxes, a higher transfer tax for property that will not be the buyer's primary home, and seasonal ski income are the Vermont-specific items to plan for. Max LTV varies by program.
Ski towns hold most of Vermont's jumbo rental property: Stowe, Killington, the Sugarbush and Mad River Valley area, Okemo in Ludlow, and Stratton and Mount Snow in southern Vermont. Manchester and Woodstock have historic homes with year-round visitor demand.
Burlington's Hill Section and South End, along with Shelburne and the Lake Champlain shoreline, have large homes and small buildings near the University of Vermont and the medical center. Most of the rest of the state has modest values, where jumbo balances are rare.
Vermont's rental demand at the top end is closely tied to recreation. Ski homes earn most of their income from December through March, with a smaller bump during fall foliage, while Burlington's market is driven by the university, the medical center and a tight overall housing supply. Year-round leases in Burlington tend to be easier to underwrite than ski-season income.
| Area | Typical high-value property | What to check |
|---|---|---|
| Stowe, Killington, Sugarbush | Ski homes and condos | Seasonal income, rooms tax, winter access |
| Manchester, Woodstock | Historic homes | Older systems, comparable leases |
| Burlington Hill Section, Shelburne | Large homes, small buildings | City rental rules, nonhomestead tax rate |
Vermont splits property into homestead and nonhomestead classes for education taxes. A home the owner lives in is homestead; rentals and second homes are nonhomestead and pay the nonhomestead rate, which is set each year and has risen in recent years. Municipal taxes are added on top.
Budget on the nonhomestead bill for your purchase price, not the seller's homestead bill. Town listers can help, and most towns reappraise when their values drift too far from market.
Older buildings and rural systems are the other Vermont factor. Many ski-area and village homes are converted farmhouses or older chalets with oil or propane heat, private wells and septic systems, and mud season makes some roads hard to travel each spring. Insurers and appraisers will ask about heating, roofs and water, and tenants paying high seasonal rent expect reliable systems. Recent inspections help a large file.
This example is illustrative and not a quote. An investor buys a six-unit building in Burlington's Hill Section for $1,800,000. Units lease for about $2,200 each, so gross rent is $13,200 a month. Nonhomestead and municipal taxes are budgeted at $2,700 a month and insurance at $550. The table compares two loan sizes; estimated principal and interest assumes a 30-year amortization.
At 75% LTV the loan is $1,350,000, estimated principal and interest is about $9,095, the total payment is about $12,345 and DSCR is about 1.07x. At 70% the loan is $1,260,000, the payment is about $11,739 and DSCR is about 1.12x. At 75% the ratio is just above the 1.0x standard minimum; at 70% it has more room. On 5-8 unit buildings max LTV is often lower than on a single home and varies by program.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $1,800,000 | $1,800,000 |
| Loan amount | $1,350,000 | $1,260,000 |
| Down payment | $450,000 | $540,000 |
| Estimated principal and interest | $9,095 | $8,489 |
| Taxes and insurance | $3,250 | $3,250 |
| Total monthly payment | $12,345 | $11,739 |
| Monthly rent | $13,200 | $13,200 |
| DSCR | About 1.07x | About 1.12x |
Vermont requires short-term rental operators to register for and collect the state meals and rooms tax, and the state has fire safety registration rules for short-term rentals. Towns set the rest; Burlington regulates short-term rentals more tightly than most, while ski towns have generally been more open.
Ski-season income is strong but concentrated in winter. Some programs qualify on projected STR revenue, and the lender will look at how the property earns in summer and fall.
Outside ski towns and Burlington, very few Vermont rentals reach $1.5M. Larger loans elsewhere usually mean several rentals combined.
A blanket portfolio loan can combine five or more rentals, and some programs can include properties in New Hampshire or New York.
The qualifying idea does not change: rent divided by the full payment of principal, interest, taxes, insurance and any HOA dues, with 1.0x as the standard minimum. The credit floor is still 620, LLC ownership is normal and 30-year terms are available.
What changes is the depth of review. On jumbo balances, max LTV is often below the 80% purchase and 75% cash-out limits, reserve requirements are usually higher and some programs order a second appraisal or a desk review. Pricing on large loans is set case by case.
Vermont's property transfer tax is paid by the buyer, and the amount is higher when the property will not be the buyer's primary residence. Recent laws have adjusted the tiers, so get the current figure from your attorney. A clean water surcharge also applies.
Bring these with your first request and the review goes faster.
Our investor loans are business-purpose loans on non-owner-occupied property, and we lend on 1 to 8 unit rentals in Lamoille, Rutland, Washington, Bennington, Windsor and Chittenden counties and elsewhere in Vermont.
Share the property address, purchase price or estimated value, current or market rent and your target loan amount. The team will size the loan at a few leverage levels and show where the ratio lands. Use the form below or call (877) 298-1001 to get a quote.
Rentals pay the nonhomestead education tax rate, which is often higher than the homestead rate the seller paid.
The buyer, and the amount is higher for property that will not be the buyer's primary home. Confirm the figure with your attorney.
Yes, if it is non-owner-occupied investment property. Some programs qualify on projected STR revenue, and seasonality will be reviewed.
Yes. Short-term rental operators register for and collect the Vermont meals and rooms tax.
No. The loan qualifies on the property's rent. You still need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
Yes. Cash-out goes up to 75% LTV on standard programs, often lower on jumbo balances, and seasoning varies by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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