Almost all of Delaware's vacation rental demand sits in eastern Sussex County, where Rehoboth Beach, Dewey, Lewes, Bethany and Fenwick Island fill with families from Washington, Baltimore and Philadelphia every summer.
In short: LendingStreet makes DSCR loans on Delaware short-term rentals, and some programs size the loan on a third-party projection of short-term rental revenue rather than a 12-month lease. Qualification runs on the property, not your personal income: 620 minimum credit, loans from $150,000 with no stated maximum and LLC ownership allowed. Town rental licenses, the state's lodging tax on short-term rentals and flood insurance are the Delaware items that shape the numbers.
Rehoboth Beach and Dewey Beach are the busiest towns, with a boardwalk, restaurants and a lively summer scene. Lewes is quieter and historic, with Cape Henlopen State Park and the ferry to Cape May. Bethany Beach, South Bethany and Fenwick Island are family-focused, with many weekly summer rentals.
Inland communities around Millsboro, Milton and Ocean View have newer planned developments that rent to families who want a pool and a short drive to the beach. Wilmington and Newark see business and university travel, but they are a small slice of the STR market. Buyers in the beach towns compete with second-home purchasers, so prices are high relative to rents, and the revenue projection has to carry a large loan through a short season.
| Market | Who books | What to check |
|---|---|---|
| Rehoboth and Dewey | Summer crowds, weekenders | Town rental license, parking |
| Lewes | Families, couples, ferry travelers | City license, historic district |
| Bethany and Fenwick | Weekly family rentals | Town license, flood zone |
| Inland Sussex communities | Families wanting amenities | HOA rental rules |
Delaware's beach towns require rental licenses, and some set occupancy, parking and trash rules for rental homes. Unincorporated Sussex County has fewer town-level rules, but many newer communities have HOA covenants that limit rental terms or require registration.
Rules in these towns change, and enforcement tightens during the summer season. Confirm the license, occupancy limits and any HOA position for the exact address before relying on nightly or weekly income.
Instead of asking for your tax returns, the lender divides the property's income by its full monthly payment, including taxes, insurance and HOA dues. For a vacation rental with no history, some programs accept a third-party revenue projection built from comparable listings. If the property already rents nightly, its booking history can carry more weight.
Most programs look for a ratio of at least 1.0x, and sub-1.0 options exist. Purchase leverage goes up to 80% LTV and cash-out up to 75% LTV, with lower limits on some short-term rental programs and large loans. Loans start at $150,000, the minimum credit score is 620 and 30-year terms are available. Anything from a single condo to an eight-unit building fits the residential program; larger buildings go through commercial lending.
Delaware has no general sales tax, but in recent years it extended its lodging tax to short-term rentals, and some beach towns charge their own rental taxes or license fees. Confirm the current state and town figures and what the platforms collect for your address.
Delaware's property taxes are low compared with neighboring states, but its counties completed court-ordered reassessments in recent years after decades without one, so older tax bills are not a reliable guide. Use the current Sussex County figure for the property.
Flood insurance is generally required in mapped flood zones, which cover much of the area near the ocean and the bays. Coastal storms also affect wind coverage. In inland planned communities, HOA dues for pools and clubhouses go straight into the ratio.
This example is illustrative and not a quote. An investor buys a four-bedroom home in a community near Lewes for $690,000. A projection for comparable homes shows $61,000 a year in gross revenue. At 75% LTV the loan is $517,500, and estimated principal and interest on a 30-year term is about $3,618 a month. Add $210 in taxes, $260 in insurance and $210 in HOA dues, and the payment is about $4,298. $5,083 of average monthly revenue divided by that payment gives a DSCR of about 1.18x.
Putting 30% down changes the picture: a $483,000 loan, a payment of about $4,057 and a DSCR of about 1.25x, with $34,500 more due at closing. Low property taxes help Delaware ratios, but almost all of the revenue lands between June and September, so the projection needs real comparables from the same community.
| Item | Amount |
|---|---|
| Purchase price | $690,000 |
| Loan amount at 75% LTV | $517,500 |
| Down payment | $172,500 |
| Projected annual revenue | $61,000 |
| Average monthly revenue | $5,083 |
| Estimated principal and interest (30-year) | $3,618 |
| Property taxes | $210 |
| Insurance | $260 |
| HOA dues | $210 |
| Total monthly payment | $4,298 |
| DSCR | About 1.18x |
Delaware's beach season runs from Memorial Day through Labor Day, with weekly rentals common in July and August and strong weekends in June and September. Fall and spring weekends add some revenue, especially around festivals in Rehoboth and Lewes, and winter is slow. Some owners rent on monthly terms in the off season. The DSCR math uses the average over 12 months.
Most delays come from missing items. Pull these together first:
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, projected revenue and target leverage. The financing team checks the ratio at a few loan amounts, flags local permit or HOA issues it sees, and comes back with options, including a long-term-rent fallback if the nightly numbers are thin.
We lend throughout Sussex County and the rest of Delaware. Call (877) 298-1001 or use the form below to get a quote.
Yes, most do, along with occupancy and parking rules. Unincorporated areas rely more on HOA covenants. Confirm for the exact address.
Delaware has extended its lodging tax to short-term rentals in recent years, and some towns add their own. Confirm current figures and what platforms collect.
Delaware counties reassessed property in recent years, so older bills may be far below the current figure. Use the current assessment.
On some programs, yes. The projection averages all 12 months, so slow winter months count against strong summer weeks.
You can put more down, look at a sub-1.0 DSCR program or qualify on long-term market rent instead. Our guide to low STR projections, linked below, walks through each option.
Yes. LLC borrowers are standard on DSCR loans, and you sign for the loan personally as the owner of the entity.
No. Our investor loans are business-purpose loans on non-owner-occupied property, not second homes or residences.
Yes. The appraiser estimates market rent, and on short-term rental programs the revenue figure may come from a third-party projection or booking history. Both feed into the ratio.
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