Loan Programs
Airbnb and VRBO properties qualify on platform revenue, not on what a long-term tenant would pay. That distinction is worth a great deal on a well-run short-term rental — and it comes with regulatory diligence no other DSCR program requires.
STR program terms
- 70–75% LTV on purchase, 65–70% on cash-out
- Income from 12 months of platform statements, or a market projection
- Revenue discounted to roughly 75–85% of trailing gross
- 660–680 FICO typical; 6 months of PITIA in reserves
- Furnished or unfurnished, in jurisdictions where STR operation is legal
How STR income is documented
| Situation | Income basis | Typical haircut |
|---|---|---|
| Operating STR, 12+ months history | Platform revenue statements (Airbnb, VRBO) | 15–25% |
| Operating STR, under 12 months | Available history annualized, or market projection | 20–30% |
| Purchase, seller-operated STR | Seller's platform statements plus market data | 20–25% |
| Purchase, no STR history | Market projection, or long-term Form 1007 rent | Varies widely |
The haircut exists because short-term revenue is seasonal, management-intensive, and platform-dependent in a way lease income is not. A cabin grossing $84,000 a year will typically underwrite somewhere between $63,000 and $71,000 — still far above the $2,200 a month a long-term tenant would pay, but not the full top line.
The regulatory question comes first
Before rate or leverage, underwriting asks whether short-term rental is legal at that address. This has become the leading cause of STR declines, and the rules move constantly at the municipal level.
- Outright bans and severe caps. New York City's registration regime effectively eliminated most whole-unit short-term rentals. Similar restrictions exist across a growing list of cities.
- Primary-residence requirements. Several jurisdictions permit short-term rental only in an owner's primary home — incompatible with a non-owner-occupied DSCR loan by definition.
- Permit caps and lotteries. Some resort markets issue a fixed number of licences. A property without one may not be able to get one.
- HOA and condo prohibitions. The municipality may permit it while the association's covenants forbid it. Underwriting checks both.
Bring the permit or licence number to the file at intake. On a purchase, confirm transferability — some licences run with the owner rather than the property, and do not survive the sale.
Underwriting the downside
Prudent structuring on a short-term rental means knowing what the property does if the strategy stops working. Ask the question before you close: what would this rent for on a twelve-month lease, and does that number cover PITIA?
A mountain property grossing $6,800 a month in season against a $3,900 payment looks excellent. If the town caps permits next year and the fallback is a $2,600 long-term lease, the property is suddenly $1,300 a month underwater. Where the long-term fallback rent still clears roughly 0.90 DSCR, the position is defensible. Where it clears 0.60, the entire investment thesis rests on a municipal vote.
Insurance deserves the same scrutiny. Short-term rental operation is excluded under most standard landlord policies. A commercial or specialty STR policy commonly runs 30–60% above a comparable landlord policy, and that premium sits directly in your PITIA denominator.
Price a short-term rental
Send the address, the last twelve months of platform revenue, and the permit status. We will tell you what it supports.
Get a term sheet Run the numbersBusiness-purpose loans on non-owner-occupied investment property. Short-term rental regulations vary by municipality and change frequently — verify current local law and HOA covenants independently. Not legal advice and not a loan commitment.