If you’re looking to finance an Airbnb or short-term rental property, a DSCR loan (Debt Service Coverage Ratio loan) might be your perfect financing solution. Unlike traditional mortgages that focus on your personal income, DSCR loans evaluate the property’s income potential – making them ideal for Airbnb investors.
In this ultimate guide, you’ll discover:
✔ What makes DSCR loans perfect for Airbnb properties
✔ Special DSCR requirements for short-term rentals
✔ How to calculate Airbnb DSCR (with examples)
✔ Top lenders for Airbnb financing
✔ Step-by-step approval process
✔ Pro tips to maximize your approval chances
Let’s dive into everything you need to know about using DSCR loans for your Airbnb investment!
Why DSCR Loans Are Ideal for Airbnb Properties
How DSCR Loans Work for Short-Term Rentals
DSCR loans are uniquely suited for Airbnb properties because:
✅ No personal income verification – Lenders focus on property income
✅ Use projected Airbnb income (not just long-term rental rates)
✅ No standard DTI requirements – Great for self-employed hosts
✅ Can finance multiple Airbnb properties
Traditional Mortgage Challenges for Airbnbs
Most conventional lenders:
❌ Don’t accept short-term rental income in qualifying
❌ Have strict DTI requirements
❌ Limit the number of investment properties
DSCR Loan Requirements for Airbnb Properties
While more flexible than traditional loans, DSCR loans for Airbnbs have special requirements:
1. Minimum Credit Score
- 620+ (most lenders)
- 580+ (some private lenders like Truss Financial Group)
- 500-580 (hard money lenders at higher rates)
2. Down Payment Requirements
| Lender Type | Min. Down Payment |
|---|---|
| Traditional DSCR Lenders | 25-30% |
| Private Lenders | 20-25% |
| Hard Money Lenders | 30-35% |
*Note: Airbnb properties often require 5-10% more down than long-term rentals*
3. DSCR Ratio Requirements
Lenders typically want:
- 1.25+ DSCR for Airbnb properties (vs 1.0 for long-term rentals)
- Some lenders accept 1.0 DSCR with strong comps
4. Special Airbnb Requirements
- 12-month booking history (for existing properties)
- Market analysis (for new Airbnb purchases)
- Higher reserve requirements (6-12 months)
How to Calculate DSCR for an Airbnb Property
DSCR = Net Operating Income (NOI) / Annual Debt Service
Airbnb-Specific Calculation Example
Property Details:
- Purchase Price: $400,000
- Down Payment: 25% ($100,000)
- Loan Amount: $300,000
- Interest Rate: 7.5%
- Projected Airbnb Income: $60,000/year
- Expenses: $18,000/year
- Vacancy: 25% (typical for Airbnbs)
Step 1: Calculate Gross Income
$60,000 (projected bookings)
Step 2: Subtract Vacancy
$60,000 × 25% = $15,000
$60,000 – $15,000 = $45,000
Step 3: Subtract Operating Expenses
$45,000 – $18,000 = $27,000 NOI
Step 4: Calculate Annual Debt Service
$300,000 loan @ 7.5% for 30 years = $2,098/month
$2,098 × 12 = $25,176/year
Step 5: Calculate DSCR
$27,000 / $25,176 = 1.07 DSCR
In this case, you’d need to either:
- Increase down payment to 30%
- Show higher projected income
- Find a lender accepting 1.0 DSCR
Best DSCR Lenders for Airbnb Properties
🥇 #1 Airbnb-Friendly Lender: Truss Financial Group
✅ Accepts DSCR as low as 1.0 for Airbnbs
✅ Uses projected Airbnb income in qualifying
✅ Credit scores 580+ accepted
✅ Fast approvals (as quick as 10 days)
👉 Get Pre-Approved for an Airbnb DSCR Loan
Other Top Lenders
| Lender | Min. DSCR | Min. Credit | Down Payment |
|---|---|---|---|
| Kiavi | 1.25 | 620 | 25% |
| LendingOne | 1.25 | 600 | 25% |
| Visio Lending | 1.0 | 580 | 30% |
| Hard Money | 0.75 | 500 | 35% |
5 Pro Tips for Airbnb DSCR Loan Approval
- Use Realistic Income Projections
- Back up with AirDNA/Rabbu reports
- Show comparable Airbnb listings
- Highlight Your Experience
- Existing Airbnb performance
- Hospitality background
- Consider a Hybrid Approach
- Some lenders accept blended rates (Airbnb + long-term rental income)
- Boost Your Down Payment
- 30% down often gets better terms
- Work With an Airbnb-Savvy Lender
- Not all DSCR lenders understand short-term rentals
FAQ: DSCR Loans for Airbnbs
❓ Can I get a DSCR loan for a new Airbnb (no history)?
Yes! Use market rent projections from AirDNA or similar services.
❓ Do DSCR loans allow co-hosting or property management?
Yes, but you’ll need to show the management agreement.
❓ What expenses count against my DSCR?
All operating costs: cleaning, maintenance, utilities, management fees, etc.
❓ Can I refinance my Airbnb later?
Yes! Many investors start with DSCR then refinance to conventional later.
🚀 Ready to Finance Your Airbnb?
Now that you understand how DSCR loans work for Airbnb properties, it’s time to take action! Truss Financial Group offers some of the most flexible Airbnb financing available: