Can I use a DSCR loan for an Airbnb or short-term rental?

How is short-term rental income counted?

Depending on the program, the lender uses:

• Your booking history (often 12 months of statements from Airbnb, VRBO, or your property manager), or
• A short-term rental market report estimating what the property should earn, for a property that isn't rented yet

Some programs reduce the income for expenses like cleaning and platform fees, which lowers the ratio.

What's different from a long-term rental loan?

• Bigger down payment: often about 25%
• Slightly higher rate in many programs
• More reserves may be required
• Local rules matter: if the city or HOA bans or limits short-term rentals, the loan may not work

Which cities have short-term rental rules?

Many cities and HOAs in California, Florida, Texas, and Colorado limit short-term rentals with permits, caps, or outright bans. Rules change often, so check the current rules for the exact address and the HOA's documents before you buy.

Example (illustrative)

An investor buys a two-bedroom near the beach in Florida for $500,000. The market report estimates $4,800 a month in bookings; after the program's expense reduction, the ratio comes in at 1.1. With 25% down she qualifies, and her property manager's 12 months of statements will help when she refinances later.

Our take

Short-term rentals can cash-flow beautifully, but the deal lives or dies on local rules. Before you fall in love with a property, send me the address. We'll check the rules and run the numbers both ways: short-term and long-term.