Hard Money Rental Loans

Build a portfolio of passive income

How To Get A DSCR Loan For Airbnb


30- year fixed DSCR Loan for stabilized rental properties

Interest Rate

from 7.5

Origination fee


Loan To Purchase Price

up to 80%

Loan To Value

up to 80%

Minimum DSCR



30-yr fixed rate

Minimum Loan Amount


Maximum Loan Amount


Minimum FICO


Type of Property

Residential 1-4 units

The Short Answer

A Debt Service Coverage Ratio (DSCR) loan is a type of real estate loan where lenders use the DSCR ratio to determine the borrower’s ability to repay the loan on the income generated by the property. The Debt Service Coverage Ratio is used to measure the property’s ability to generate enough income to cover its debt obligations.

Can you use DSCR loans for short term rentals such as Airbnb properties?

The short answer is yes, you can get a DSCR (Debt Service Coverage Ratio) loan for an Airbnb property. However, the eligibility criteria and terms of the loan will depend on the lender’s specific policies and requirements.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Can You Get A DSCR Loan For Airbnb?

In a word, YES. DSCR loans are typically used for income-producing properties such as apartment buildings, hotels, and shopping centers. However, they can also be used for other types of commercial properties that generate consistent rental income. These properties include short term rental properties such as Airbnb.

Qualification Guideline
1. Loan-to-Value (LTV) Ratio 75-80%
2. Debt Service Coverage Ratio None
3. Maximum Loan Amount $1 Million - $5 Million
4. Credit Score 680 Minimum
5. Property Type and Use Residential / Commercial
6. Loan Types Adjustable Rate / Fixed Rate
7 Number of Properties Owned No Minimum
8. Prepayment Penalties Yes (If Applicable)


DSCR loans for Airbnb properties are best suited to investors who would prefer that their loan approval is based on the cash flow potential of the property, instead of their personal income, employment and other financial factors. To achieve this, however, investors will need a DSCR ratio of 1 or more.

To qualify for a DSCR loan for an Airbnb property, the property will typically need to have a strong rental history and a positive cash flow. The lender may also require a minimum credit score (this is usually around 620 or higher) and a down payment of 20-25%, as well as documentation of the property’s income and expenses.

Lenders that offer DSCR loans will use the following factors to work out the borrower’s DSCR ratio:

  • The appraised value of the property
  • The vacancy rate (ideally 5-10%)
  • An estimate of the property’s future rental income
  • Monthly HOA costs
  • Down payment amount
  • Monthly operating expenses of the property (such as maintenance, property management etc)

How To Get A DSCR Loan For Airbnb

How To Get A DSCR Loan For Airbnb

For real estate investors who are looking to find the right investment property loan for their short term rental property purchase, Debt Service Coverage Ratio loans may be the answer. DSCR loans give investors the opportunity to enjoy a streamlined loan application that is based on the property’s rental income and cash flow, and less on their personal income.

Here’s a step-by-step guide on how to get DSCR loans for Airbnb property:   


Step 1: Find the right property

When it comes to short term rental loans, DSCR loans can be the best financing alternative. However, due to the fact that DSCR loans are based on the rental income from the property and its cash flow, investors should focus on finding investment properties that will earn as much as possible.

Airbnb financing can be tricky, but finding a property that has a high earning potential will give investors the best chance at qualifying for DSCR loans. Places where people go on vacation (such as properties near convention centers or theme parks) are a good place to start. It’s important to consider the local real estate market and use this to find high rental income generating properties. This will give investors a good chance at qualifying for an investment property loan.


Step 2: Make sure you meet the criteria

The next step in the journey to receiving short term rental loans for Airbnb property is to make sure that you and the property would both meet the criteria expected of a lender. Loan qualification criteria can vary between lenders, however there are a few general requirements that are used across the board.

These usually include a minimum credit score, a certain amount of liquid assets, and a down payment of anything between 10% and 30% of the property’s value. You’ll also need to demonstrate a strong rental history and positive cash flow for the property.


Step 3: Choose a DSCR lender

Choosing a DSCR lender that fits your specific requirements is an important part of the overall Airbnb financing journey. It’s a good idea to look for a lender that specializes in DSCR loans for Airbnb property purchases. Then check that the lender offers the loan terms and interest rates that would suit your investing strategy the best.

Lenders offer different interest rates and loan terms, so this decision is key for real estate investors to get the right Airbnb financing that suits their financial needs.


Step 4: Prepare your documents

Before applying for Airbnb financing, you’ll need to gather your financial and property documents. Make sure that you know the exact requirements from the lender, ahead of time, so that you can collate the right information.

Generally, lenders require the following documents: tax returns, bank statements, rental agreements, and property financial statements. The lender may also require a property appraisal and inspection report.


Step 5: Submit your loan application

Once you have gathered all the supporting documentation for your Airbnb financing application, you can go ahead and submit the loan application. Make sure that you supply detailed information about the property and its cash flow, as well as your financial situation, and future projections. Also, be prepared to give the lender any extra documents, should they ask for them.


Step 6: Await approval

Once you’ve submitted your application for Airbnb financing, it will be reviewed by the lender who will determine your DSCR (Debt Service Coverage Ratio) and go over all your documents before making a decision on the loan approval. DSCR loans typically have a quicker application process and a more streamlined review process.


Step 7: Close the loan

Once DSCR loans have been approved, lenders will provide an offer that includes the loan amount, interest rate, and repayment terms. If the terms suit your financial needs, you can accept the offer and then sign on the dotted line.

The lender may require some more documents at this stage, after which the funds will be issued to you, and you can purchase the Airbnb property.

DSCR Loan For Airbnb Example

When looking for Airbnb financing, DSCR loans offer investors a useful financial tool for purchasing short term rentals. DSCR loans are largely based on the rental income that the Airbnb property can generate, so the following formula can be used to determine the debt service coverage ratio:

DSCR = Net Operating Income (NOI) / Total Debt

The NOI refers to the property’s rental income once the operating expenses have been deducted. Total Debt refers to sum of all the loan payments, including the principal amount, interest and other costs associated with this.

If an Airbnb property was generating $1,000,000 per year as its NOI, with an annual debt obligation of $800,000, the DSCR for the property would be:

$1,000,000 / $800,000 = 1.25 DSCR

When it comes to short term rental loans, DSCR loans specifically look for a debt service coverage ratio of 1 and up. So, in this example, the Airbnb property has a 1.25 debt service coverage ratio, which would stand it in good stead for being approved for a loan.

Choosing A Good DSCR Lender

Choosing A Good DSCR Lender

Choosing a good DSCR Lender is an important decision for real estate investors who are looking to finance an Airbnb property. Here are some factors to consider when selecting a lender:


  1. Experience: Lenders who offer DSCR loans specifically and have provided these loans to Airbnb property investors are a good option. Lenders who specialize in DSCR loans and have experience working with short term rental property investors are likely to provide a more tailored service.
  2. Reliability: One of the most important aspects of choosing a lender is to find one that is reliable. This can be done by researching reviews of the lender, including online ratings and feedback from other industry professionals and investors. It also includes making sure that that the lender is licensed and regulated by the appropriate governing body.
  3. Loan terms: Each lender has different loan terms on offer for each loan, and these are a key factor for investors. So, investors should make sure to check the loan amounts, interest rates and repayment terms offered by lenders, to check that these align with their financial strategy.
  4. Total cost: The total cost of the loan can vary between lenders, due to the fact that each lender charges different fees. Finding out what fees a lender charges and working out the total cost of the loan, is a big factor in determining which lender is right for your needs.

Overall, the key to choosing a lender for DSCR loans is to do your research, compare options, and carefully consider the lender’s experience, reputation, loan terms, fees, and customer service.

Hard Money Loans

Data driven hard money lending. Get your loan in under 10 minutes

Investment Property Loan Requirements

The requirements for an investment property loan vary between lenders and loan types. These requirements are also different for each borrower, according to their financial situation. Here are some general loan requirements that can apply to many investment property loans:

  • Credit score: Investment property loans generally require higher credit scores than other loans, and while they aren’t based on your personal income, it’s a good idea to build your credit score. Investors should aim to have a credit score over 640, but bear in mind that some lenders may require a score of over 700 for certain loans, such as multi-family properties.
  • Down payment: A higher down payment is required for an investment property loan. Typically, investment property loans will require a 20% down payment, and in some cases this can go up to 25%.
  • Debt-To-Income (DTI) ratio: Lenders often check the DTI of a borrower, to make sure that the borrower can comfortably cover their debt payments. A DTI ratio of below 40% is advisable, some lenders may require an even lower DTI ratio, depending on the loan.
  • Cash reserves: Some lenders may require the borrower to have a certain amount of cash reserves. This is money on hand to cover any unexpected expenses, or to cover their debt payments if they aren’t receiving any income. Some lenders may require 6 months’ worth of cash reserves.
  • Rental income: The property’s ability to generate a certain amount of rental income can sometimes be a factor in an investment loan application. A property will need to generate a certain amount of rental income to cover the debt repayments.

How To Ensure Your DSCR Loan Application Is Successful

To ensure the success of DSCR loans, an application needs to fulfil certain general requirements. Here are some tips to ensure that your application is successful.

Understand the lender’s requirements

Each lender has different requirements, so a key component to a successful application is fully understanding the lender’s minimum DSCR loan requirements. These include the minimum credit score, down payment amount, debt-to-income ratio and so on. Along with this, it’s important to build a strong credit history, to show the lender that you have repaid other loans before, even though your personal income isn’t a large factor.

Create a business plan

A solid plan is a vital part of applying for DSCR loans. This plan should be centered around what you intend to do with the rental property, and how you plan to do it. Essentially, a road map to figuring out how to achieve success with the investment property is a large part of your application.

This is necessary to show lenders that there is a plan to generate income from the rental property, and another plan for unexpected costs and months where income cannot be generated.

Build up cash reserves

Some lenders may require 6 months’ cash reserves and some may not, either way it’s a good sign if you have cash reserves available. This will indicate to the lender that unexpected costs can still be covered and the debt can be covered even in times where there is no rental income.

Gather the necessary documentation

Be prepared to provide detailed documentation of your income, assets, and financial history. This may include tax returns, bank statements, and other financial records. At minimum, most investors will require 2 years’ worth of tax returns, W-2’s, and 2 months of bank statements.

Final Tips For Purchasing An Airbnb Investment Property

Purchasing an Airbnb property can be done by using short term rental loans such as DSCR loans. Here are some final tips for purchasing investment properties:

  • Location is key: Make sure to choose the right location for the rental property. In other words, an Airbnb property will need to be in a location where there’s a high demand for short term rentals. It’s also a good idea to consider the attractions, public transportation, and other amenities that guests may be looking for.
  • Understand local regulations: Make sure you understand any local regulations or zoning restrictions that may impact your ability to use the property as an Airbnb rental. This may include occupancy limits, taxes, and permits.
  • Calculate your potential ROI: Before making an offer on a property, calculate your potential return on investment (ROI). This can help you determine whether the property is a good investment and whether you can generate enough rental income to cover your expenses and make a profit.
  • Have a plan for managing the property: Managing an Airbnb property can be time-consuming and challenging. Make sure you have a solid plan for managing short term rentals, including cleaning, maintenance, and guest communication.

Additional Resources


A DSCR Loan is a unique loan product designed specifically for real estate investors. The cash flow status of the rental property is incorporated into the loan terms. It is very well suited to rental property investors.

DSCR Loan Interest Rates

Find out the latest DSCR Loan Interest Rates here. This guide explores what rate you are likely to qualify for.

DSCR Loan Calculator

This DSCR Calculator makes it easy to workout DSCR Ratio, and it also estimate maximum loan amount and monthly repayments.

DSCR Loan Pros & Cons

There are advantages and disadvantages associated with DSCR Loans. This guide outlines all the DSCR Loan Pros & Cons.

Best DSCR Lenders

Simply put, some lenders are better than others. This guide reviews the Best DSCR Lenders at this moment in time.

DSCR Loan Requirements

First and foremost there must be a rental property to evaluate, but there are other DSCR Loan Requirements.

DSCR Loan vs Hard Money Loan

This investor guide explains the key differences between a DSCR Loan vs Hard Money Loan.

DSCR Loan vs Conventional Loan

This investor guide explains the key differences between a DSCR Loan vs Conventional Loan.