DSCR Loans for Airbnb: How They Are Underwritten
If you are buying a short-term rental (STR) with a debt service coverage ratio (DSCR) loan, the lender’s choice of income figure decides whether you qualify, and lenders pick it 3 different ways. 5 lenders publish STR terms on their own pages. 4 of them say they can qualify a property on AirDNA projections. Their published minimum ratios run from no minimum at all to 1.15, and 1 of the 5 does not finance STR purchases.
A DSCR loan qualifies the property instead of the borrower. Griffin Funding’s page says a DSCR purchase loan qualifies you “on the property’s expected rental income instead of your personal income, W2s, or tax returns.” That matters to an investor whose returns show a large paper loss from a cost segregation study (see the STR tax loophole and the cost segregation calculator). It also means the ratio decides the loan on its own.
How the Ratio Is Calculated
The formula is 1 line. Griffin Funding states it as gross monthly rent divided by principal, interest, taxes, insurance, and association dues (PITIA). Easy Street Capital uses the same shape and says “No expenses besides taxes, insurance or HOA dues are considered in underwriting or qualification.” Cleaning, platform fees, utilities, and supplies never enter the ratio, so a DSCR of 1.4 says nothing about profit after those costs.
As an example only, take the $400,000 property from our tax-loophole post, bought with 20% down.
The 7.5% rate is an assumption for the arithmetic. The payment at that rate is about $2,237, rounded to $2,240.
Suppose a market-data projection puts gross bookings at $60,000 a year, which is $5,000 a month. $5,000 divided by $2,900 is a DSCR of 1.72, which clears every published minimum below. The same house can produce a much lower ratio, because the lender decides which income figure counts.
How Lenders Count Short-Term Rental Income
A lender can count a projection from market data such as AirDNA, 12 months of actual booking income, or long-term market rent set by an appraiser.
Ridge Street Capital “uses AirDNA market data to evaluate short-term rental income instead of relying on long-term lease assumptions,” and says a property that has never been listed on Airbnb can qualify on the projection. Tidal Loans uses projections “from market data sources like AirDNA,” or actual income where the property has at least 12 months of bookings.
Easy Street Capital uses 100% of the AirDNA projection only for a borrower it classes as a “Professional STR Investor”: 3 or more successful STR properties in the United States each with at least 12 months of documented rental activity, or 1 in the same market with a year or more of history. Without 12 months of STR operating history, it says revenue “can be determined by the long-term rental market rent as determined by a third-party appraiser,” though in some cases it may use AirDNA or the appraiser’s short-term rent instead. Easy Street also says most other DSCR lenders count revenue at about 20% less than projected. None of the other 4 publishes a reduction.
Griffin Funding uses appraisal market rent, documented rental history, or “AirDNA-style market data, depending on the program.” Upright says “Short-term rental purchases are not currently eligible,” and refinances need documented income and occupancy at a 1.15 ratio.
Run the example through each method, keeping the $2,900 payment:
- Full projection: $5,000 a month gives 1.72.
- Projection reduced by 20%: $4,000 a month gives 1.38.
- Long-term market rent, assumed at $2,600 a month as an example only: 0.90.
At 0.90, the loan fails Ridge Street’s 1.0 minimum and falls below Tidal’s preferred 1.0, which Tidal reviews case by case. Easy Street and Griffin publish no minimum, and Griffin says it funds ratios below 1.0 “when reserves support the deal.” A host with no STR history is the borrower most likely to be underwritten on long-term rent.
5 Lenders’ Published Terms
Listed alphabetically, each figure from the lender’s own page. “Not published” means the page does not state it.
Griffin’s row needs a caution. Its page says STR files “carry their own requirements, including coverage minimums and LTV limits that differ from long-term rentals,” and it does not publish those STR figures.
On rates, Griffin is the only one of the 4 lenders that finance STR purchases to put a date on its figure: “DSCR loan rates in October 2026 start at 5.99% for 1-year ARMs” (adjustable-rate mortgages), with fixed options from 7.125%. Those figures cover Griffin’s whole DSCR program. Upright says a 5-year penalty prices roughly 40 to 50 basis points better than no penalty, and that some states restrict prepayment terms.
When DSCR Is the Wrong Tool
The published terms point to 5 cases where a DSCR loan fits badly.
- No STR track record, with a lender that falls back on long-term rent. That is how the example falls to 0.90.
- A short hold. A prepayment penalty of 1 to 5 years applies if you sell or refinance early. Ridge Street, Upright, and Griffin offer no-penalty options, and Upright’s pricing note shows that choice costs rate.
- Credit under the floor: 700 at Ridge Street, 660 at Upright, 640 at Easy Street, and 620 at Griffin.
- Rural land. Easy Street caps LTV at 70%, which means at least 30% down.
- A market that restricts STR use. Griffin says “your market must permit STR use.” Check the local rules before you apply.
For related reading, see How to Finance an ADU and Airbnb Tax Deductions.
The Host Camp Take
In our example, the income method alone moves the ratio on the same house from 1.72 to 0.90. Compare that method across lenders before you compare rates. Ask each lender in writing which income source it will use for your property, what share of a projection it counts, and what each prepayment term costs. Our lender locator connects you with mortgage lenders. [Book a free strategy call](LINK NEEDED) and we will look at your numbers with you.
Host Camp is not a licensed tax, legal, or financial adviser. Confirm figures for your situation with a professional.
‍
