DSCR loan for Airbnb
Any DSCR loan for Airbnb follows the same approach as any DSCR loan, except the lender must decide the monthly earnings of a short-term rental.
How lenders calculate short-term rental income
A lease for a long-term rental sets rent at a fixed amount. Bookings rise and fall with the season in a short-term rental (STR), so lenders rely on either of two figures. When an owner has booking history, they show 12 months of payouts from either the platform or property manager. Without any history, a buyer relies on a market report that estimates how much similar listings nearby earn.
For the yearly total, lenders divide by 12 and put the monthly result over PITIA (principal and interest, property tax, insurance plus HOA dues). Before dividing, some lenders also subtract a share for cleaning, platform fees or vacancy, so find out which calculation the lender uses.
Working through a short-term rental example
Over the last 12 months, a cabin brought in $33,600 in payouts, which works out to $2,800 a month. The new loan amounts to $300,000, with a 7.25% rate across 30 years, which requires $2,047 each month for principal and interest. Monthly tax is $350 and insurance is $250, which puts PITIA at $2,647.
Dividing $2,800 by $2,647 gives a DSCR of 1.06. This passes a 1.00 minimum but falls short of 1.10. If the lender first subtracts 10% of the income for fees, the ratio falls to 0.95.
What else an STR loan file needs
The lender will likely check if the address is cleared for short-term letting under local rules. Some cities and HOAs ban this practice or require a permit. Coverage has to include paying guests, though a standard landlord policy may leave them out. For the same ratio, down payments and rates often run a step higher than for a long-term rental.
Use our DSCR loan calculator to enter the monthly income and payment, then review the terms each lender offers on the DSCR lenders page.