Why do lenders haircut short-term gross?
Nightly income is lumpy. Seasonality, platform fees, and occupancy swings are real. Many business-purpose programs do not take 100% of short-term or vacation-rental gross. They apply a haircut, then divide that qualifying income by PITIA. That ratio is lender DSCR.
What does the estimator default to?
75% of gross. It is an educational illustration — common enough to start from, not GI policy, not a program matrix, and not a quote. Edit the chips or the field. Some files with a clean T12 can defend more. Projections often take less.
How does haircut change the two views?
Lender DSCR uses haircut income ÷ PITIA. Full-income cash flow uses 100% of the monthly gross you entered, minus PITIA and any optional vacancy / maintenance / PM you typed. Those optional percentages do not change lender DSCR. The STR DSCR estimator shows both numbers side by side so you do not mix them.
What this is not
A haircut on a worksheet is not an approval and not a denial. The capital source sets the method. Local rules can kill the rent story before any percentage matters. Income construction is in STR income methods. Purchase vs refinance is in the FAQ.