Short Term Rental DSCR Loans for Airbnb Investors

Hunter Letendre
Dec 18, 2025
3 min read

Short term rental Debt Service Coverage Ratio (DSCR) loans have become one of the most popular financing options for Airbnb and vacation rental investors. Unlike traditional mortgages, these loans focus on property income rather than personal income, making them ideal for investors scaling a short term rental portfolio.

With Airbnb demand remaining strong in vacation and secondary markets, DSCR loans offer flexibility and speed for both first-time and experienced investors.

What Are Short Term Rental DSCR Loans?

Short term rental DSCR loans are investment property loans that qualify borrowers based on the property’s debt service coverage ratio rather than W-2 income or tax returns.

DSCR is calculated by dividing the property’s gross rental income by its annual debt obligations. Most lenders require a DSCR of 1.0 to 1.25, meaning the property must generate at least enough income to cover the mortgage payment.

For Airbnb properties, lenders typically use projected short term rental income from market data or rental analysis platforms rather than long-term lease estimates.

How Do Short Term Rental DSCR Loans Work for Airbnb?

Airbnb DSCR loans are specifically designed to account for nightly rental income. Instead of relying on a signed lease, lenders often use third-party short term rental data to estimate monthly revenue.

Key features commonly include:

No personal income verification
No tax returns required
Qualification based on rental performance
Properties titled in an LLC allowed by many lenders

Interest rates are typically higher than conventional loans, reflecting the increased flexibility and risk profile, but the trade-off is faster approvals and fewer documentation requirements.

What Are the Benefits of Short Term Rental DSCR Loans?

Short term rental DSCR loans provide several advantages for Airbnb investors:

Easier qualification for self-employed borrowers
Ability to scale multiple properties quickly
No limits on the number of financed properties with many lenders
Works well for vacation markets and seasonal rentals

According to AirDNA market data, professionally managed short term rentals in strong vacation markets often outperform long-term rentals by 20 to 50 percent in gross revenue, making DSCR loans a viable option for maximizing cash flow.

What Are the Typical Requirements for Airbnb DSCR Loans?

While requirements vary by lender, common criteria include:

Minimum credit score of 620 to 680
Down payment of 20 to 25 percent
DSCR ratio of 1.0 or higher
Property must be investor-owned, not owner-occupied
Cash reserves of three to six months of payments

Some lenders allow lower DSCR ratios with larger down payments or higher interest rates.

Are Short Term Rental DSCR Loans Right for You?

Short term rental DSCR loans are best suited for investors focused on cash flow and portfolio growth rather than owner-occupied financing. They are especially effective in high-demand Airbnb markets where nightly rates and occupancy support strong revenue projections.

Investors should carefully analyze local regulations, seasonal trends, and operating expenses to ensure long-term profitability.

Final Thoughts on Short Term Rental DSCR Loans

Short term rental DSCR loans offer a powerful financing strategy for Airbnb investors who want flexibility, scalability, and fewer barriers to entry. With the right property and market analysis, these loans can accelerate portfolio growth and improve cash flow without relying on traditional income documentation.

If you are considering buying or financing an Airbnb or short term rental property, reach out to me, Hunter Letendre, REALTOR® with Berkshire Hathaway HomeServices Verani Realty. I serve New Hampshire, Maine, and Northern Massachusetts, and I am here to help you with all of your real estate needs.

Hunter Letendre, REALTOR®

Berkshire Hathaway HomeServices Verani Realty

Cell: 603-268-9559

Hunter.Letendre@Verani.com

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