DSCR loan requirements for short-term rentals

Requirement by requirement

Credit score

20 lenders publish a minimum credit score. The lowest is 620, published by A&D Mortgage, Griffin Funding, Lendmire and Truss Financial Group. The highest published minimum is 700 (Certain Lending, Lima One Capital and Logan Finance). 5 lenders don't publish a minimum. See every lender at 640 or lower.

Debt service coverage ratio (DSCR)

11 lenders publish a minimum DSCR, from 0.75 (Defy Mortgage, LendingOne, LendSure Mortgage and Quickline Capital) to 1.30 (Lima One Capital). 14 say they allow a DSCR below 1.0, 4 say they don't, and 7 don't say. 7 publish a no-ratio option. A lender's STR minimum can be stricter than its general DSCR minimum; the haircut ladder shows published STR-specific minimums.

Loan-to-value and down payment

23 lenders publish a maximum purchase LTV, from 70% to 85% (Angel Oak Mortgage Solutions, Defy Mortgage, Griffin Funding, LendSure Mortgage, theLender and Visio Lending), so the smallest published down payment is 15%. For cash-out refinances, 17 publish a maximum, from 70% to 80% (Defy Mortgage, Griffin Funding and Newfi Wholesale). Top LTVs usually require top credit and experience.

Loan size

18 lenders publish a minimum loan, from $75K (Defy Mortgage, Lima One Capital and Visio Lending) to $500K. 17 publish a maximum, up to $5M (Uncapco Financial).

How STR income is counted

This is often the deciding requirement. 17 of 25 direct lenders publish that they can qualify a short-term rental on projected income, so a new purchase with no booking history can work (see them). 3 count STR income only after about 12 months of bookings and 5 don't publish a method. 6 publish the share of gross STR revenue they count, 1 publish only a cap rule; compare those rules on the haircut ladder.

First-time investors

10 lenders publish that first-time investors are eligible, 2 say they aren't, and 13 don't publish a policy.

Frequently asked questions

What credit score do you need for a DSCR loan on a short-term rental?

20 of the 25 direct lenders we track publish a minimum credit score. The lowest published minimum is 620 (A&D Mortgage, Griffin Funding, Lendmire and Truss Financial Group), the median is 650 and the highest is 700. 5 don't publish one. Published minimums often come with lower LTVs or higher rates.

What DSCR do lenders require for an Airbnb?

11 of 25 direct lenders publish a minimum DSCR, from 0.75 to 1.30 (median 1.00). 14 say they allow a DSCR below 1.0 and 7 publish a no-ratio option. Some lenders set a higher minimum for short-term rentals than for long-term rentals.

How much down payment do you need for an STR DSCR loan?

Down payment is 100% minus the max LTV. The highest published max purchase LTV is 85% (15% down), the median is 80% and the lowest is 70% (30% down). 2 of 25 direct lenders don't publish one. The top LTV usually needs top credit.

Can I get a DSCR loan on an Airbnb with no booking history?

4 of the 25 direct lenders we track qualify STR income on a projection (such as AirDNA or an appraiser STR analysis) and 13 accept either history or a projection. 3 count STR income only after about 12 months of bookings, and 5 don't publish how they count it.

Do lenders count 100% of short-term rental income?

Often not. 6 of 25 direct lenders publish what share of gross STR revenue they count (their "haircut"), 1 publish only a cap rule and 18 don't publish one. The haircut ladder shows each published rule with its source.

What is the minimum loan amount for an STR DSCR loan?

18 of 25 direct lenders publish a minimum loan. The lowest is $75K (Defy Mortgage, Lima One Capital and Visio Lending) and the median is $100K. 7 don't publish one.

How is DSCR calculated for a short-term rental?

DSCR is the qualifying monthly rent divided by the monthly housing payment (principal, interest, taxes, insurance and HOA dues). For an STR, qualifying rent is usually gross STR revenue divided by 12, minus any lender haircut. A DSCR of 1.00 means the rent exactly covers the payment.