DSCR Loan Guide

DSCR Loans for
Short-Term Rentals

Airbnb, VRBO, and other short-term rental properties qualify for DSCR financing — but income is calculated differently than long-term rentals. Here's exactly how it works and what you need to close.

🏠 Get Your DSCR Quote → 🔄 I Want to Refinance →
✓ Airbnb & VRBO income accepted ✓ No personal income required ✓ LLC vesting available ✓ Purchase & cash-out
DSCR for Short-Term Rentals

Can You Use a DSCR Loan for an Airbnb or Short-Term Rental?

Yes — DSCR loans are one of the best financing tools available for short-term rental investors. No personal income documentation, no W-2s, no tax returns. Qualification is based entirely on the property's income potential. The key difference from long-term rental DSCR loans is how that income is calculated.

On a standard long-term rental DSCR loan, income is based on a signed lease or market rent from the appraisal. On a short-term rental, there's no annual lease — income varies by season, platform, and occupancy. Lenders handle this differently, and knowing which method your lender uses before you apply can mean the difference between qualifying and not.

Why STR DSCR Works Well

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Short-term rentals often generate higher gross incomePer-night rates frequently produce more annual income than a long-term lease on the same property — especially in tourist or urban markets.
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No personal income documentationYou qualify on the property's cash flow, not your tax return. Heavy write-offs won't hurt you.
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LLC vesting availableClose in your entity and keep personal liability separate. Most STR DSCR programs support LLC borrowers.
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Works for purchase and refinanceFinance a new STR acquisition or cash-out on an existing one using platform income history.

What Makes STR DSCR Different

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Income calculation varies by lenderSome use 12-month gross platform revenue. Others use the appraiser's market rent. The method matters — it directly affects your DSCR ratio.
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Fewer lenders offer STR-specific programsNot all DSCR lenders underwrite short-term rental income. You need a lender who specializes in it.
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Seasonality can affect income averagesLenders averaging 12 months of actual income will capture slow seasons. A new property without history may use a different method.
The Critical Detail

How STR Income Is Calculated for DSCR

This is the most important thing to understand before applying for a DSCR loan on a short-term rental. Lenders use different income methods — and the method determines whether you qualify and at what loan amount.

Method 1: Actual Platform Revenue

The lender uses 12 months of documented gross income from your Airbnb, VRBO, or other platform — typically from a 1099-K or platform earnings report. A percentage (usually 75–90%) is applied to account for vacancy and expenses.

Best when: You have an established property with a strong 12-month earnings history. Your actual revenue is significantly higher than what the appraiser would estimate for market rent.

Method 2: Appraiser Market Rent

The lender uses the long-term market rent from the appraisal — same as any standard DSCR loan. The property is valued as if it were a conventional rental, regardless of STR income potential.

Best when: The property is new or has limited STR history. Market rent is strong in the area. Sometimes this method produces a better DSCR ratio than actual STR revenue in markets with high long-term rental demand.

Method 3: AirDNA / Short-Term Rental Income Report

Some lenders accept third-party STR market data from platforms like AirDNA to estimate projected annual revenue for properties without an established income history. A licensed appraiser may incorporate this data into a rental income projection. This method is especially useful for new acquisitions where you can't yet document 12 months of actual income.

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Ask your lender which method they use before you apply

The income calculation method can change your DSCR ratio significantly — and therefore whether you qualify at all. Bayou Mortgage will identify which method produces the best outcome for your specific property and guide you to the right DSCR program before you start the application.

The Math

Calculating DSCR on a Short-Term Rental

DSCR = Net Operating Income ÷ Total Annual Debt Service. Most DSCR lenders require a ratio of 1.0 or higher — meaning the property generates at least enough income to cover the loan payment. Here's how it works with STR income.

STR DSCR Example

Property: STR grossing $72,000/year — Purchase Price $550,000

ItemAmount
Gross STR Revenue (12 months)
$72,000/yr
Lender income factor (75%)
$54,000/yr = $4,500/mo
PITIA (est. 7%, 20% down, taxes + insurance)
$3,850/mo
DSCR Ratio
$4,500 ÷ $3,850 = 1.17 ✓ Qualifies

Illustration only. Actual qualification depends on lender, credit score, property, and current rates. Bayou Mortgage — NMLS #1845349.

What You Need

STR DSCR Loan Requirements

RequirementTypical Standard
Credit Score
680+ (some programs allow 660)
Min. Down Payment
20–25% for STR properties
Min. DSCR Ratio
1.0 (some programs allow 0.75 with larger down)
Income Documentation
12 months platform reports, 1099-K, or AirDNA
Personal Income Docs
Not required
Tax Returns
Not required
Property Types
SFR, condos, 2–4 unit (lender-specific)
LLC Vesting
Available on most STR DSCR programs
Max Loan Amount
Up to $3M+ on most programs
Reserves
6–12 months PITIA after closing
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Higher down payment than long-term rental DSCR

STR properties typically require 20–25% down vs. 15–20% for long-term rentals. Lenders view short-term rental income as slightly less stable than a signed annual lease — the larger down payment compensates for that additional volatility. Properties in heavily tourist-dependent markets may face even stricter requirements from some lenders.

New vs. Established STR

Financing a New STR vs. an Existing One

Whether you're buying a new short-term rental or financing one you already operate changes which income documentation approach is available to you.

New STR Acquisition (No Income History)

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Market rent from appraisalThe appraiser provides a market rent schedule. Used exactly like a long-term rental DSCR loan.
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AirDNA or comparable STR dataSome lenders accept projected STR income from third-party data providers. Must be verified by a licensed appraiser.
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Cannot use platform revenueNo income history means no 12-month documentation. You need one of the two methods above.

Existing STR (12+ Months Operating)

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12-month gross platform revenueMost lenders prefer this — actual income history is the strongest documentation you can provide.
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1099-K from Airbnb or VRBOThe platform issues a 1099-K for gross payments processed. Most lenders accept this as documentation.
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Platform earnings dashboard exportsScreenshots or exports from the platform's earnings dashboard are accepted by most STR DSCR lenders alongside the 1099-K.
Comparison

STR DSCR vs. Long-Term Rental DSCR

Both are DSCR loans — but the underwriting nuances for short-term rentals are distinct. Here's how they compare across the factors that matter most.

FactorSTR DSCRLong-Term Rental DSCR
Income Source
Platform revenue or STR market data
Lease or market rent (appraiser)
Min. Down Payment
20–25%
15–20%
Lender Availability
Fewer lenders
Widely available
Income Potential
Often higher gross income
Stable but typically lower gross
Income Stability
Variable — seasonal
More predictable
New Property Option
Yes (market rent or AirDNA)
Yes (market rent)
LLC Vesting
Available
Available

Ready to Finance Your Short-Term Rental?

Bayou Mortgage works with DSCR lenders who specialize in short-term rental income. Tell us your property, your income history, and your goals — we'll match you to the right program.

🏠 Get Your DSCR Quote → 📞 337-476-2623
Common Questions

STR DSCR Loan FAQ

What income documentation do I need for an Airbnb DSCR loan? +
For an existing STR, most lenders want 12 months of platform revenue documentation — typically a 1099-K from Airbnb or VRBO plus a platform earnings dashboard export. Some lenders also accept bank statements showing consistent STR deposits. For a new property with no income history, you'll need the appraiser's market rent estimate or a third-party STR income report from a provider like AirDNA. Bayou Mortgage will tell you exactly what documentation is required for your specific program before you apply.
Do lenders use gross or net STR revenue for DSCR? +
Most lenders use gross platform revenue and then apply an expense factor — typically 75–90% — to arrive at effective income. This is similar to how long-term rental DSCR loans use 75% of market rent. The exact factor varies by lender. Some more conservative lenders may use net revenue after platform fees; others use the full gross 1099-K amount before applying their factor. Bayou Mortgage will show you the exact calculation each lender applies to your numbers.
Can I get a DSCR loan on a property that's only seasonally rented? +
Yes — seasonal STR properties qualify, but the 12-month income average naturally incorporates slow seasons into the calculation. If your property earns heavily in summer and sits quiet in winter, the annual average is what counts. For a highly seasonal property, the market rent approach (using the appraiser's estimate of long-term rental value) may actually produce a better DSCR ratio than the 12-month STR average. Bayou Mortgage will run both calculations for your property.
Does the property need to be actively listed on Airbnb to qualify? +
Not necessarily — but if you're using platform revenue as the income source, you need documentation to support it. An actively operating STR with 12 months of history on a platform has the cleanest documentation path. A property you intend to convert to STR but haven't yet listed will need to use market rent or AirDNA projections instead. The key is matching the income documentation method to the property's actual situation.
Can I use a DSCR loan to buy an Airbnb in another state? +
Yes — DSCR loans are investment property loans with no owner-occupancy requirement. You can finance a short-term rental in any state where Bayou Mortgage is licensed. We serve 33 states for DSCR lending. See all states we serve →
What if local regulations restrict short-term rentals in that market? +
This is a real risk that lenders are increasingly aware of. Some DSCR lenders require confirmation that the property is in a market where STR is legally permitted before funding. If you're buying in a market with pending or recent STR restrictions, some lenders may revert to long-term market rent for income calculation — or decline the STR program entirely. Always verify local STR ordinances before purchasing. Bayou Mortgage will ask about this early in the process.
Can I refinance an existing STR with a DSCR cash-out loan? +
Yes — DSCR cash-out refinances are available on short-term rentals, subject to the same income documentation requirements. A property with a strong 12-month earnings history makes for a clean cash-out refi using actual platform revenue. Most STR DSCR cash-out programs allow up to 70–75% LTV. The cash can be used for any purpose — another property down payment, renovations, or business capital. See DSCR cash-out refinance →