DSCR loans for Airbnb: how lenders underwrite short-term rentals
Updated October 1, 2026 · 7 min read · By STRROI Research
A DSCR loan qualifies you on the property’s income instead of your personal income. For investors with complicated tax returns or several properties, that is often the easiest way to finance a short-term rental. Here is how lenders look at the numbers.
The DSCR formula
Debt service coverage ratio is the property’s income divided by its annual debt payments. A DSCR of 1.00 means the income exactly covers the payments; 1.25 means 25% more income than payments. Lenders differ on the income side: many use gross rent against principal, interest, taxes, insurance and HOA, while investors usually look at NOI against the mortgage. Ask each lender how they calculate it.
Will a lender approve it?
The free DSCR calculator shows a property’s debt service coverage ratio and the largest loan its income supports.
Typical requirements in 2026
| Item | Typical range |
|---|---|
| Minimum DSCR | 1.00 to 1.15, with the best pricing at 1.25 or more |
| Down payment | 20% to 25% on a purchase (75% to 80% loan-to-value) |
| Credit score | Often 680 to 720 minimum, 740+ for the best rates |
| Cash reserves | Often 6 months of payments, more for larger portfolios |
| Rate | Usually above conventional loans; STR loans often price 0.25% to 0.75% above long-term rental DSCR loans |
How lenders count Airbnb income
- Twelve months of booking history on the property, often with a 15% to 20% haircut.
- A third-party revenue projection for a purchase with no history, often with a 20% to 25% haircut and a minimum market score.
- Long-term rent from the appraiser’s rent schedule as a fallback, which is usually lower than STR income.
Because of those haircuts, a property that barely covers its mortgage on your own projections may not qualify. Build in a cushion.
A worked example
The $450,000 example house produces $22,560 of NOI. With 20% down at 7.5%, annual mortgage payments are $30,206, a DSCR of 0.75. That is below most lenders’ minimums. Here is the largest loan the same income supports at each common threshold:
| Target DSCR | Max loan at 7.5% |
|---|---|
| 1.25 | $215,095 |
| 1.10 | $244,426 |
| 1.00 | $268,869 |
The gap between that and an 80% loan ($360,000) is extra down payment you would need, or a sign to keep looking.
Ways to improve a DSCR
- Put more down. A smaller loan means smaller payments; this is the most direct lever.
- Negotiate the price. Every dollar off the price lowers the loan without touching the income.
- Buy down the rate. Paying points at closing lowers the payment for the life of the loan.
- Ask about interest-only periods. Some lenders calculate DSCR on interest-only payments, which raises the ratio.
- Add income the lender will count. A documented booking history usually earns a smaller haircut than a projection.
- Pick a property that cash flows on its own. The strongest DSCR files start with a property whose income covers its costs comfortably.
See every listing in a market, rated
STRROI underwrites every home for sale in a ZIP code as a short-term rental and ranks them 1 to 10. Try it on a sample market, no sign-up needed.
DSCR loan vs. conventional investment loan
| DSCR loan | Conventional investment loan | |
|---|---|---|
| Qualifies on | Property income | Your personal income and debt-to-income ratio |
| Tax returns | Usually not required | Required |
| Rate | Higher | Lower |
| Number of loans | No agency cap | Agency limits on financed properties |
| Can close in an LLC | Usually yes | Usually no |
If your W-2 income qualifies easily and you only plan to buy one or two properties, a conventional loan is often cheaper. DSCR loans shine for self-employed investors, people scaling a portfolio, and anyone whose tax returns show large paper losses.
Questions
Can you get a DSCR loan for an Airbnb?
Yes. Many DSCR lenders finance short-term rentals, qualifying on booking history or a revenue projection instead of your personal income. Expect 20% to 25% down and a minimum DSCR around 1.00 to 1.25.
What DSCR do I need for a short-term rental?
Most lenders want at least 1.00 to 1.15, and the best rates usually start at 1.25. Because lenders haircut projected STR income, aim for a property that clears 1.25 on your own conservative numbers.
Is a DSCR loan rate higher than a conventional loan?
Usually, yes. DSCR loans trade a higher rate for qualifying on property income, and short-term rental DSCR loans often price above long-term rental ones.
See every listing in a market, rated
STRROI underwrites every home for sale in a ZIP code as a short-term rental and ranks them 1 to 10. Try it on a sample market, no sign-up needed.