Short-term rentals (STRs)—like Airbnb and Vrbo—are a high-profit niche for real estate investors. But financing these properties with traditional loans can be a hassle. That’s where DSCR loans come in. By using your property’s rental income to qualify instead of personal income, DSCR loans are tailor-made for vacation rental investors.
In this guide, we’ll cover the best DSCR lenders for short-term rentals, what to expect from underwriting, how to qualify, and tips to maximize your approval odds in 2025.
Start exploring DSCR lenders who specialize in STRs today.
🔍 What Is a DSCR Loan for Short-Term Rentals?
A Debt Service Coverage Ratio (DSCR) loan is a type of non-QM loan used by real estate investors to purchase or refinance rental properties based on the property’s income—not the borrower’s.
In the case of short-term rentals, lenders often calculate the DSCR using:
- Actual rental income (via Airbnb/Vrbo statements)
- Market-based projections from services like AirDNA
- Appraiser rent schedule using nightly or monthly average occupancy
👉 Start with our DSCR Loan Overview to understand how these loans work and who qualifies.
✅ DSCR Loan Requirements for Airbnb & STR Properties
Here’s what lenders typically require for STR-based DSCR loans:
| Requirement | Typical Range / Notes |
|---|---|
| Minimum DSCR | 1.25+ (higher than long-term rentals) |
| Credit Score | 660+ preferred; some accept 640 with conditions |
| Down Payment (LTV) | 20–30% down (LTV capped at 70–75%) |
| STR Income Proof | 12-month Airbnb statements or AirDNA projection |
| Occupancy History | At least 6–12 months preferred (but not required) |
| Property Management | May be required in tourist-heavy markets |
| Loan Type | 30- or 40-year fixed; Interest-only options |
| Ownership | LLC or personal name accepted (LLC preferred) |
🔗 Related reading: Bank Statement Loans for Self-Employed Borrowers
🏆 Top DSCR Lenders for Short-Term Rentals (2025)
1. Visio Lending
- Specializes in rental property loans
- Offers STR-specific underwriting
- Accepts AirDNA and actual STR income
- No limit on number of financed properties
2. Kiavi
- DSCR loans with interest-only options
- Up to 80% LTV for experienced investors
- Digital-friendly application process
- Competitive rates for properties with Airbnb income
3. Lima One Capital
- Known for BRRR and vacation rental financing
- Requires solid DSCR (>1.25 for STRs)
- Offers both 30-year and 5/1 ARM options
4. CoreVest
- Nationwide DSCR lender with large loan capacity
- Ideal for investors scaling to 5+ properties
- Allows for blanket loans or portfolio financing
5. New Silver
- Tech-forward platform focused on STR investors
- Accepts projected rental income from tools like AirDNA
- Streamlined approval process for seasoned Airbnb hosts
💡 Note: These lenders may change program terms based on state, credit profile, or property type. Always verify current rates and terms.
Start exploring DSCR lenders who specialize in STRs today.
🌍 Best Markets for DSCR STR Loans
While DSCR loans are available in all 50 states, some states and cities are friendlier to short-term rental investing—and by extension, more favorable for STR DSCR lending.
| State | Notes on DSCR STR Lending |
|---|---|
| Florida | High lender availability, strong Airbnb market |
| Texas | Popular in Austin and San Antonio; DSCR-friendly market |
| Tennessee | STR hubs like Nashville and Gatlinburg see favorable terms |
| Arizona | Phoenix and Sedona are Airbnb hotspots with lender support |
| North Carolina | Asheville, Charlotte, and coastal towns attract DSCR lenders |
❗ Avoid cities with strict STR regulations (e.g., San Francisco, Honolulu), which may impact appraised rental income or approval.
🧮 How to Calculate DSCR on a Short-Term Rental
Most lenders apply a 12-month average gross rent and compare it to the proposed monthly mortgage payment (PITIA):
DSCR = Annual Gross STR Income ÷ (12 × Monthly PITIA)
Example:
- Annual Airbnb income: $72,000
- Monthly PITIA: $4,000
- DSCR = $72,000 ÷ $48,000 = 1.50
A DSCR of 1.25 or higher is often the minimum to qualify for STR-specific loan programs.
💡 Pro Tips to Get Approved
- Document your STR income: Use Airbnb payout history or link to STR management software.
- Use AirDNA for projections: Many lenders accept AirDNA data for market rent estimates.
- Show reserves: 6–12 months of mortgage payments in savings is often required.
- Set up an LLC: Many lenders prefer or require business-purpose ownership.
- Choose interest-only loans: These reduce monthly payments and boost DSCR.
🔗 Internal Resources & Tools
📣 Final Thoughts
If you’re building a short-term rental portfolio or transitioning to vacation rental income, DSCR loans offer the flexibility and speed that traditional mortgages simply can’t match. By focusing on the property’s income instead of yours, you can scale faster—even without tax returns.
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.