You can finance an Airbnb or VRBO property with a DSCR loan. Instead of a 12-month lease, the lender sizes the loan on short-term rental income, using either the property’s booking history or a third-party revenue projection such as AirDNA. Expect slightly lower leverage and stricter reserves than a long-term rental.
Key takeaways
- Lenders use 12 months of booking history, or an AirDNA or similar projection for new purchases.
- Many lenders discount short-term income (often to 75% to 80% of gross) or deduct a management and cleaning expense factor.
- Typical max LTV is 75% to 80% on purchases and 70% to 75% on cash-out refinances.
- Check local short-term rental rules and HOA bylaws before you apply. A ban kills the deal.
How Lenders Underwrite Short-Term Rental Income
Long-term rentals qualify on a lease. Short-term rentals don’t have one, so lenders use one of three income sources:
- Trailing booking history. 12 months of Airbnb or VRBO payout statements, or a property manager’s operating statement. This is the strongest evidence.
- Third-party projection. For a purchase, many lenders accept an AirDNA Rentalizer report or similar market data showing projected annual revenue.
- Appraiser’s short-term rent analysis. Some lenders ask the appraiser for an STR income estimate in addition to the standard market rent schedule.
Because short-term income is seasonal and carries higher operating costs, many lenders apply a haircut (for example, using 75% to 80% of projected gross revenue) before dividing by PITIA.
Example DSCR Calculation for an Airbnb
A mountain cabin projects $78,000 in annual gross bookings. The lender uses 80%: $62,400, or $5,200 per month. Monthly PITIA is $4,100. DSCR = 5,200 ÷ 4,100 = 1.27. The same cabin as a long-term rental might lease for $2,900 per month and fail at 0.71, which is why STR financing matters.
Typical STR DSCR Requirements
| Item | Typical requirement |
|---|---|
| Minimum DSCR | 1.0 to 1.15 on STR income |
| Credit score | 660 to 680+ |
| Purchase LTV | 75% to 80% |
| Cash-out LTV | 70% to 75% |
| Reserves | 6 to 12 months PITIA |
| Property | Single-family, 2 to 4 units, many condos; rural and condotel eligibility varies |
Check These Before You Apply
- Local regulations. Many cities require STR permits, cap the number of nights, or ban non-owner-occupied short-term rentals. Lenders may ask for proof the use is legal.
- HOA rules. Condo and HOA bylaws often prohibit rentals under 30 days.
- Insurance. Standard landlord policies may exclude short-term stays. Get a policy that covers STR use; the premium goes into your PITIA.
- Furnishing costs. These are not financed by the loan. Budget them separately from your down payment and reserves.
Refinancing an STR You Already Own
If you bought the property with cash, a bridge loan or a conventional second-home loan, a DSCR refinance can move it to investor financing based on your booking history. Twelve months of strong reviews and payouts typically produce better terms than a projection. See DSCR cash-out refinance for seasoning and LTV rules.
When the Numbers Run Thin
Seasonal markets sometimes fall just below 1.0 after the lender’s haircut. A larger down payment, a buydown, or a no-ratio DSCR program can still get the deal done.
Frequently Asked Questions
Can I use AirDNA to qualify for a DSCR loan?
Many DSCR lenders accept an AirDNA or similar market projection for a property you are buying. For a refinance, 12 months of actual booking history is usually preferred.
What LTV can I get on an Airbnb DSCR loan?
Typically 75% to 80% on a purchase and 70% to 75% on a cash-out refinance, depending on credit, DSCR and the market.
Do DSCR lenders finance condotels for short-term rental use?
Some do, but condotels and non-warrantable condos are a niche. Expect lower LTV and fewer lender options.
Is a DSCR loan better than a second-home loan for an Airbnb?
A second-home loan has lower rates but requires personal occupancy and limits rental use. If the property is a full-time rental, a DSCR loan is the correct product.
Have a deal in mind? Buying or refinancing a short-term rental? Tell us about the deal and we will match it with the lenders that fit.