Can I Use a DSCR Loan for Short-Term or Airbnb Rentals? #

Yes. Many lenders, including AHL, allow DSCR loans to be used for financing short-term rental properties programs can often be used to finance short-term rentals such as Airbnb or VRBO properties. This makes them a valuable tool for investors targeting high-demand vacation or urban rental markets.

How DSCR Loans Apply to Short-Term Rentals #

DSCR loans qualify properties based on rental income relative to debt obligations. For short-term rentals, lenders may use market rent estimates, third-party reports, or appraisals to establish projected income. Instead of requiring long-term leases, they allow investors to qualify with income generated by nightly or weekly bookings.

What Lenders Look For #

• Market demand: Lenders want to see that the property is located in a strong rental market with consistent booking potential.

• Income estimates: A Form 1007 rent schedule or a property manager’s income report may be used to project rental performance.

• Investor experience: Some lenders require borrowers to have prior experience managing short-term rentals, while others are more flexible.

• Reserve requirements: Lenders may require larger cash reserves to protect against seasonality or vacancy risk.

Benefits of Using DSCR Loans for Airbnb #

• Provides financing for properties that banks may not approve.

• Eliminates the need for tax returns or W-2s by focusing on rental income.

• Helps investors scale portfolios of short-term rentals more quickly.

• Offers flexible terms compared to traditional bank products.

Summary #

Yes, investors can use a DSCR loan for Airbnb or other short-term rentals. As long as the property demonstrates strong projected income and the borrower meets credit and reserve requirements, DSCR loans provide a reliable way to finance short-term rental investments.