A short-term rental (STR) DSCR loan lets you buy or refinance an Airbnb or VRBO property based on what it can earn per night. There's no lease and no personal income documentation. Lenders use a market projection or your booking history instead.
Why Regular Loans Struggle With Airbnbs
A conventional investment loan qualifies you on your personal income and, at best, a long-term lease. A new vacation rental has neither a lease nor rental history, so the property's earning power doesn't count. STR DSCR loans solve that by qualifying the property on its short-term rental income.
How Short-Term Rental Income Is Calculated
There are two common ways:
- Market projection: a third-party report, most often from AirDNA, estimates annual revenue from comparable listings nearby. Some lenders require a minimum market score.
- Booking history: if you've hosted the property for about 12 months, many lenders will use your actual revenue from platform statements and bank deposits.
Lenders then count a portion of the gross, typically 75–80%, to account for vacancy and seasonality, and calculate DSCR like any rental.
Example: a projection shows $84,000 a year in gross revenue. At 75%, the lender counts $63,000, or $5,250 a month. With a full payment of $4,100, the DSCR is 1.28x.
Short-Term Rental Loan Requirements
| Guideline | Typical | Strongest files, at some lenders |
|---|---|---|
| Credit score | 660–680 | From about 640 |
| Max LTV, purchase | 75% | Up to 80% |
| Max LTV, refinance | 70% | Up to 75% |
| Income counted | 75% of projected gross | Up to 80%, or actual history |
| DSCR | 1.00x | Lower with some programs |
| Reserves | 6 months | Less at some lenders |
| Hosting experience | Preferred | Not required at many |
STR vs. Long-Term Rental DSCR
| Short-term rental | Long-term rental | |
|---|---|---|
| Income source | Projection or 12-month history | Lease or appraiser's market rent |
| Typical max purchase LTV | 75% | 75–80% (85% at some) |
| Insurance | STR-specific policy, often higher | Standard landlord policy |
| Pricing | Often slightly higher | Baseline |
Check Local Rules First
This matters more than anything else. Before you go under contract, confirm:
- Short-term rentals are allowed in that zone, and whether you need a permit or license
- Whether the city limits non-owner-occupied rentals. Los Angeles, for example, generally limits them to the host's primary residence.
- The HOA allows rentals under 30 days
- Occupancy taxes and registration requirements
What Makes a Strong STR Market for Financing
- Clear, stable short-term rental rules
- Plenty of comparable listings, so the projection is reliable
- Demand across more than one season
- Insurance you can actually get at a reasonable price
Step by Step
- Pick the market and check the local rules.
- Get a revenue projection for the property.
- Run the numbers in the DSCR calculator, using about 75% of projected monthly revenue as rent.
- Get an insurance quote for short-term rental use.
- Send me the scenario, and I'll match it to the right lender.
Airbnb Loan FAQ
Can I get a DSCR loan for an Airbnb with no booking history?
Yes. Many lenders qualify new short-term rentals on a market projection such as an AirDNA report.
How much of the projected income do lenders count?
Usually 75–80% of projected gross revenue. Some lenders use actual 12-month booking history instead.
What's the down payment for a short-term rental loan?
Typically 25%, and 20% at some lenders for strong files.
Can I buy an Airbnb in an LLC?
Yes. Most STR DSCR lenders allow LLC ownership with a personal guarantee.
In the financial industry since 2015. Licensed loan officer in Los Angeles, California. NMLS #1493724, with UTM Financial, LLC (NMLS #2591548). More about Ivan
This article is general education, not financial, tax, or legal advice. Loan guidelines vary by lender and change often. Not a commitment to lend.