DSCR Loan Short-Term Rentals 2026: Using STR Projections vs. 12-Month Lease Equivalents

Most DSCR lenders were built around long-term rental properties where income is easy to document: one lease, one tenant, monthly rent known. Short-term rental properties on Airbnb, VRBO, or similar platforms generate variable income that does not fit that model. In 2026, a subset of DSCR lenders have created STR-specific underwriting. The rest still require the property to support itself under a 12-month lease rate, ignoring STR premium.

How STR-Friendly Lenders Underwrite

DSCR lenders that accept STR income typically use third-party market data providers such as AirDNA or Transparent Intelligence to project annual gross revenue. They apply a vacancy factor (commonly 20% to 35%) and divide the net income by the annual PITIA to calculate DSCR. A minimum DSCR of 1.0 to 1.25 is required depending on the lender.

• ✦AirDNA market report or similar required to support income projection
• ✦Vacancy factor applied to gross projected revenue before DSCR calculation
• ✦Property must be in a STR-permissible zone per local ordinances
• ✦Some lenders require 12 months of actual STR operating history if the property is already rented
• ✦Kiavi, Visio Lending, and Deephaven Mortgage have historically offered STR DSCR programs

Lenders That Use 12-Month Lease Equivalent

Most conventional DSCR lenders require a standard 12-month lease to document income. For STR properties, they ask the appraiser to provide a gross market rent opinion assuming a long-term lease rather than STR rates. This typically undervalues the property's actual income potential. The borrower must show the long-term rent supports the DSCR minimum, even if the actual STR income is significantly higher.

Local Ordinance Risk

Many municipalities have restricted or banned short-term rentals since 2022. Before placing a STR DSCR loan, confirm the local zoning permits short-term rental use. A loan closed on a property in a STR-prohibited zone creates a compliance risk and may trigger due-on-sale or occupancy provisions if the lender discovers the restriction.