Airbnb & Short-Term Rental Loans (DSCR)

Buying or refinancing a short-term rental property — Airbnb, VRBO, Booking.com, or a direct-book vacation rental — is a different animal from buying a primary home. Traditional mortgage underwriters can’t count your projected Airbnb income, your tax returns show depreciation losses, and most lenders won’t even let you close the loan in an LLC.

DSCR loans solve all three problems. Qualify on the property’s short-term rental income — no personal tax returns, no W-2s, LLC vesting allowed, loans up to $3.5M.

Check Airbnb / STR Loan Eligibility Talk to an STR Loan Specialist — (833) 350-9185

How STR / Airbnb DSCR Loans Work

A DSCR (Debt Service Coverage Ratio) loan qualifies you based on the property’s rental income, not your personal income. The formula:

DSCR = Gross Monthly Rental Income ÷ Total Monthly PITIA (principal, interest, taxes, insurance, HOA)

For traditional long-term rentals, DSCR uses a signed lease or market rent appraisal. For short-term rentals, lenders accept:

12 months of actual Airbnb / VRBO / PMS income — booking history, payout statements, or tax documents from the property (if operating)
AirDNA projection reports — for properties being purchased that don’t have a personal track record yet
Appraiser’s Rent Schedule (Form 1007) — long-term market rent, often used as a conservative fallback

Most lenders will use the higher of the two valid income sources. If the property has a strong existing Airbnb history, that’s used. If not, AirDNA projections typically fill the gap.

At a DSCR of 1.00, rental income covers the mortgage payment exactly. Above 1.00 is positive cash flow. Minimum for most STR DSCR programs: 1.00 (some programs go as low as 0.75 for strong borrowers).

Why Most Traditional Lenders Won’t Do Airbnb Loans

Conventional Fannie/Freddie loans struggle with STR properties for several reasons:

Income can’t be counted without 2 years of tax returns showing the STR income — which excludes all new investors
Most loans require occupancy certification (owner-occupied or primary residence) — STR properties aren’t that
Depreciation reduces taxable rental income — so even investors with profitable Airbnbs show a loss on their 1040s, making conventional DTI impossible
LLC ownership not allowed — most Airbnb investors want LLC for liability and portfolio management
10-property cap — conventional investor loans cap at 10 financed properties, cutting off growth

DSCR non-QM financing sidesteps all five issues.

STR DSCR Loan Requirements

Feature	Standard STR DSCR	Jumbo STR DSCR
Loan amounts	$100K-$1.5M	Up to $3.5M
FICO	620+	680+
Purchase LTV	Up to 80%	Up to 75-80%
Cash-out LTV	Up to 75%	Up to 70%
Minimum DSCR	1.00	1.00-1.15
Income docs	None	None
Vesting	LLC or personal	Same
Property types	SFR, condo, 2-4 unit	Same
Reserves	3-6 months	6-12 months

Common STR DSCR Scenarios

Purchase: existing Airbnb with 12-month track record

Purchase price: $525,000 (3BR mountain cabin, permitted STR)
Down payment: $131,250 (25%)
Loan amount: $393,750
12-month Airbnb gross: $62,400 (~$5,200/month)
Monthly PITIA: $3,850
DSCR: $5,200 / $3,850 = 1.35
Result: Approved, strong ratio. Closed in LLC, no personal tax returns.

Purchase: new acquisition, no STR history

Purchase price: $380,000 (2BR beach condo)
AirDNA projection: $3,900/month gross (conservative comp-based)
Appraiser Form 1007 (long-term): $2,600/month
DSCR uses: $3,900/month (higher of two valid sources)
Monthly PITIA: $3,200
DSCR: $3,900 / $3,200 = 1.22
Result: Approved using AirDNA projection. If AirDNA projection hadn’t been high enough, loan could still close with long-term rent fallback at lower DSCR or different program structure.

Cash-out refinance: converting long-term to STR

Current value: $680,000 (ski-town condo, just permitted for STR)
Current mortgage: $280,000
Cash out to: 70% LTV = $476,000 loan
Cash to borrower: $196,000
Projected STR income: $5,800/month
Projected PITIA on new loan: $4,900
DSCR: 1.18
Result: Approved. $196K cash out at 70% LTV, funds used to acquire next STR property.

STR-Specific DSCR Considerations

Permit status is critical. STR regulations vary wildly by city and county. Before lending, most DSCR programs verify the property can legally operate as a short-term rental:

Does the jurisdiction allow non-owner-occupied STR?
Is there an annual permit? Has it been issued or renewed?
Are there booking limits (e.g., 90 or 120 day caps) that would reduce income?
Are there HOA or condo-association STR prohibitions layered on top?

Underwrite around legal income. If the city caps STR bookings at 120 nights/year, your annualized income should reflect that cap. Never assume 365-night occupancy in a regulated market.

Shoulder season / seasonal income matters. Ski towns, beach destinations, and wine country have highly seasonal income. Lenders typically average across 12 months so a spring/fall dip isn’t a problem — but it must be factored into projections.

Property management fees are a real cost. If you use a PM company (typical 20-30% of gross), factor that into your net cash flow thinking, though DSCR is calculated on gross rent.

Furnishing and startup costs are not financed. DSCR loans cover the real estate — not the $20-60K you’ll spend furnishing and ramping up an Airbnb. Budget for it separately.

STR-Friendly Markets We Finance In

Short-term rental dynamics vary. Some markets have strong STR demand + loose regulation; others have strong demand + aggressive regulation; others have light demand + loose regulation. We finance DSCR STR in most states where we originate DSCR.

Strong STR demand + generally permissive:

Texas — Dallas, Austin, Houston, San Antonio (city-specific rules apply), Fredericksburg, Hill Country, Galveston, South Padre
Florida — Orlando area (Disney proximity), Miami, Tampa, Panhandle, Keys
Tennessee — Nashville, Smoky Mountains (Gatlinburg, Pigeon Forge), Chattanooga
North Carolina — Asheville area, Outer Banks, mountain markets
Georgia — Atlanta, Savannah, Blue Ridge

Strong STR demand + more regulated (verify permit before underwriting):

California — select coastal + mountain markets where permitted (Big Bear, Mammoth, Sonoma, Palm Springs)
Arizona — Scottsdale, Sedona, Flagstaff
Colorado — Breckenridge, Vail, Aspen, Telluride, Steamboat

Caution markets (STR heavily restricted or prohibited):

Los Angeles, San Francisco — effectively primary-residence-only for STR
New York City — Local Law 18 prohibits most STR in multi-unit
Much of Hawaii — county-by-county restrictions; verify carefully

Always verify the specific property’s permit status BEFORE committing.

Frequently Asked Questions

Yes. DSCR programs accept AirDNA market projections for properties being purchased without a personal STR track record. AirDNA analyzes comparable short-term rentals in the area and produces a conservative income estimate. Most DSCR lenders will use the higher of AirDNA projection or the appraiser’s long-term rent schedule.

12 months is the standard. If the property has been operating under 12 months, we can typically use a combination of partial-year actual income + AirDNA projection to establish qualifying income. Very new properties (under 3-6 months) typically rely fully on AirDNA.

We underwrite to the legal cap. If the city limits to 120 nights at an average nightly rate of $250, that’s $30,000/year, or $2,500/month. We qualify on that capped figure — not the uncapped 365-night potential. Always verify permit caps before making an offer.

Yes. LLC vesting is standard on DSCR loans and strongly recommended for STR operators for liability protection. We accept LLCs registered in any state, including Delaware, Wyoming, and the property’s operating state.

Reserves vary by program and loan size. Standard DSCR programs require 3-6 months of PITIA in reserves; jumbo DSCR often requires 6-12 months. Reserves can be held in personal or business accounts, investment accounts, or retirement accounts (typically discounted 40% for non-liquid holdings).

Yes. DSCR cash-out refi is a core play for STR investors building portfolios — pull equity out of your current STR property (up to 75% LTV) to fund the next acquisition. No personal tax returns required. The refinanced property still qualifies on its own STR income.

DSCR loans finance ready-to-operate properties. For fix-and-flip or substantial rehab work, consider our hard money or rehab loan programs instead. Once rehab is complete and the property is rented (or projected), refinance into a long-term DSCR loan.

Typically yes, by 0.25-0.75 points. STR income is seen as more variable than long-term lease income, so lenders price in additional risk. For properties with strong 12-month track records and lower LTV, the spread tends to narrow.

Get Started

Ready to finance an Airbnb or short-term rental? Call (833) 350-9185 or check eligibility .

Airbnb & Short-Term Rental Loans (DSCR) — 2026 Guide