💰 DSCR Loans for Airbnb & Short-Term Rentals: What Lenders Really Think 🏠

🏡 Can You Use a DSCR Loan for a Short-Term Rental? Here’s What to Know! 🔍

November 07, 2025•3 min read

🏡 Can You Use a DSCR Loan for a Short-Term Rental? Here’s What to Know! 🔍

💰 DSCR Loans for Airbnb & Short-Term Rentals: What Lenders Really Think 🏠

Can You Use a DSCR Loan for a Short-Term Rental? Here’s What You Need to Know

If you’re an investor who loves the cash flow potential of Airbnb or short-term rentals, you might be wondering: Can I use a DSCR loan to finance one?
The short answer — yes, but there’s a catch.

✅ What is a DSCR Loan?

A Debt Service Coverage Ratio (DSCR) loan is designed for real estate investors who want to qualify based on property cash flow — not personal income. Lenders look at the ratio between the property’s net operating income (NOI) and the loan’s debt payments.

It’s a perfect fit for long-term rental investors because the income stream is predictable. But short-term rentals? That’s where it gets tricky.

⚠️ Can You Use DSCR Loans for Short-Term Rentals?

Yes, you can — but only certain lenders allow it.
Most DSCR lenders prefer 12-month leases or long-term tenants, which provide consistent income data for underwriting. Short-term rentals, on the other hand, can have seasonal dips, variable occupancy, and volatile nightly rates — all of which make lenders more cautious.

If you already have a proven track record with short-term rental income or can show consistent Airbnb or VRBO revenue statements, your chances improve significantly.

💡 Why Some Lenders Avoid Short-Term Rentals

Lenders like stability. When they underwrite DSCR loans, they’re assessing how reliably a property can cover its mortgage payments.
A short-term rental — even one that performs well — carries more uncertainty because:

·Income can fluctuate based on tourism trends or local regulations.

·Platforms like Airbnb and VRBO can change policies.

·It’s harder to project annual income without long-term leases.

As a result, the lender pool is smaller. But that doesn’t mean it’s impossible.

🧭 How to Improve Your Approval Odds

If you want to use a DSCR loan for a short-term rental:

1.Show income proof: Use Airbnb, VRBO, or property management income reports to document performance.

2.Work with a flexible broker: Partner with an advisor who has access to multiple lenders — not just one or two.

3.Consider hybrid rental models: Some lenders prefer mid-term leases (3–6 months) for corporate housing or traveling nurses, which can strike a balance between cash flow and predictability.

4.Have strong reserves: Extra liquidity reassures lenders in case of off-seasons or vacancies.

🏁 Final Thoughts

A DSCR loan can fund your next short-term rental — you’ll just need the right lender and documentation to make it happen.
If you’re an investor exploring Airbnb, VRBO, or short-term rentals, Medallion Funds can connect you to lenders who understand your goals and get creative with underwriting.

👉 Let’s turn your rental income into scalable wealth — one property at a time.

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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