DSCR Loans for Airbnb and Short-Term Rental Properties
Short-term rental properties generate higher gross revenue than traditional long-term leases, but most conventional lenders refuse to count Airbnb income at all. DSCR loans built for STRs solve this problem.
Why Conventional Lenders Struggle with Short-Term Rentals
Fannie Mae and Freddie Mac guidelines treat short-term rental income conservatively or exclude it entirely for qualification purposes. Their concern: STR income is variable, platform-dependent, and difficult to verify using standard tax return schedules.
This leaves Airbnb investors in a bind — a property generating $4,500/month in STR revenue might not qualify for a conventional loan because the lender can only count
How STR DSCR Loans Work
DSCR lenders that explicitly allow short-term rentals use one of two income measurement approaches:
- AirDNA market data: AirDNA aggregates actual listing revenue from millions of STR properties. Lenders use the AirDNA "Market Gross Revenue" estimate for the subject property's market and property type to calculate projected annual income. This is divided by 12 to get a monthly figure.
- Actual operating history: If the property is an active Airbnb, the lender may accept a 12-month operating statement (from the Airbnb host dashboard) showing actual gross revenue. This is particularly useful for properties with a strong track record that exceeds AirDNA projections.
The resulting monthly income is then plugged into the DSCR formula (Monthly STR Income ÷ Monthly PITIA) to determine qualification.
STR DSCR Loan Terms and Restrictions
Investors should be aware of a few STR-specific nuances:
- Platform concentration risk: Some lenders apply a haircut (10%–15%) to AirDNA income projections to account for platform policy changes, seasonal volatility, or delistings.
- HOA restrictions: Condominiums and planned developments with HOA restrictions on short-term rentals may not be eligible. Always verify the HOA CC&Rs before submitting a loan application.
- Local ordinances: Municipalities increasingly regulate or prohibit STRs. If your target market has restrictive STR ordinances, lenders may decline or require a lower LTV.
- Insurance: Standard landlord insurance policies do not cover STR operations. Lenders require commercial STR insurance (such as Proper or CBIZ) or a program like Airbnb AirCover that meets their coverage minimums.
For business-purpose loans on non-owner-occupied investment properties only.