Dear AIRBNB & STR Investors,
We reckon you’ve found us because you are seeking to finance a Short-term Vacation Rental home somewhere wonderful? Well we’re excited for you and will do our best to support your successful investment in the best way we know possible..
Here’s what you will find here: No-nonsense. NO AI. Just to the point advice from two mortgage brokers (and one STR focused real estate broker) that have been in the loan game since 2004. We’ve seen it ALL and here is what we’re seeing now from our 240+ lenders with one of (if not the top) growing mortgage lender in the country…(more on us later.)
So..here is our DIRTY DSCR AIRBNB Mortgage Loan secret….
Short-term rental Debt-Service-Coverage-Loans (using short-term rental income) are HARD to qualify for and not always investor’s best loan option..Here’s the low-down:
We estimate more than half of AIRBNB Investors can qualify with full income verification. This allows for a greater range of loan types, lower down payments, lower rates and no early pay-off penalty. Even borrowers that don’t ‘think’ they can go full income verification might be able to find a way such as - higher DTI lenders, utilizing proposed long-term income from the subject, combination of asset-utilization to qualify.
Relevant STR Investor Experience is required (usually a full year out of the previous three) OR a full year ending within the previous twelve months to utilize short-term rental income for DSCR mortgages. This guideline is often prohibitive on its own to restrict borrowers from utilizing short-term rental income to qualify for DSCR loans. Don’t take our word for it..this is based on our direct conversation with one of our premier DSCR teams - the #1 rated on Scottsman Guide.
DSCR (debt-service-coverage-ratio) loans utilizing short-term rental income overview:
Lenders will utilize: previous 12-24 months income, appraisal form, AIRDNA or their own formula to establish STR income
Often lenders will require AIRDNA reports to have a minimum occupancy, minimum Score, and adjust the income by 20 for operating costs to satisfy underwriting guidelines.
Many lenders advertise 15-20% down DSCR loans but the reality is that properties that can qualify with higher loan amounts (after adjustments) are exceedingly rare investment prospects.
In practice 15% down DSCR loans are primarily for long-term rental income at a ratio of over 1 (PITI is covered by the projected income 1to1) for higher loan-to-values (lower down payments) lenders want 1.25to1.
The net effect is that qualifying usually requires 20-25% when utilizing short-term rental income. Of our 240+ lenders, ±5% allow short-term rental income at 80% LTV. *Keep in mind this is as of publishing and guidelines are constantly evolving.
The other side of the coin is that by the time investors put 20-25% down, there are usually alternative income documentation programs that can be utilized to qualify without the ‘risk’ or variable of an appraisal. The solution for most DSCR banks is to ‘just put more down’ but that’s because they might not have an alternative way for the borrower to qualify.
For example: Long-term rental income (from an appraisal) can often be a considerable portion of the short-term rental income projections (once adjusted for management or income variance.) If an investor has assets - some banks let reserve be utilized to help compensate for the debt-ratio. Or many DSCR banks now have low DSCR ratio programs down to .25-.50 or 1/2to1. Additionally for investment properties - lenders usually allow a percentage (or all) of the proposed long-term income to contribute towards qualifying.
For example II: A borrower has a proposed $4500 PITI and the long term rental income is $4000. The lender might have a lower (long-term) ratio program, or the borrower might be able to afford the difference as ‘full documentation’ allowing for less down and stronger terms.
Things to watch out for (or your broker should be aware of)
Overlays. Particularly reductions in LTV for STR income
Rural designations
AIRDNA Report Variances
Declining Markets
What we do differently
Determine the best loan strategy based on a FULL financial snap-shot
Manually ‘pre-underwrite’ the application based on short-term rental overlays and review AIRDNA or available short-term rental projected income in advance to ensure it meets the lenders requirements
Identify an alternative qualifying strategy (in advance) as a optional financing pivot
Shop loan to competing eligible lenders
Near unbeatable rates and costs* Compare Online
Alternative Income Options Mortgage Loan Overview
There are a variety of alternative income verification loans that borrowers could use to qualify such as: debt depletion, bank statement, ITIN, P&L Letter, Full Doc but with overlays such as adding back certain depreciation or recent employment income.
When DSCR Loans are the best solution
As far as I’m aware there are few (worthwhile) DSCR investors that we are not online with. We work with dozens of the top rated DSCR lenders and know where to go when we borrowers have a nuance, tight timeline or variable that requires a make sense approach.
What we do really well
Anything short-term rental related
Jumbo, Super-Jumbo
Odd property or borrower scenario
Foreign Nationals
Vast majority of states
Properties on Acreage
Condos and Non-Warrantable Condos
Cooperatives
Plain-Vanilla DSCR
Chocolate-Chip DSCR
Really Really Good Credit
Not Really Good Credit
Up to 10 UNITS
Just ASK! We will find a solution or the next best option!
😎 REAL WORLD LOAN SCENARIOS AND SOLUTIONS
☑️ 24-month Bank Statement Refinance of an investment property:
REFI RATE&TERM SCENARIO PRICING AT 6.625% WITH -.375 REBATE
PROPERTY VALUE: $500,000
LOAN AMOUNT: $375,000
FICO: 780
LTV: 75%
PURPOSE: Refinance
OCCUPANCY: Non-owner-occupied
INCOME DOCUMENTATION: 24-Month Bank Statements
DTI: 43%
PROPERTY TYPE: 2-4 Unit
AMORTIZATION: 30-YR | Fixed
🌎 Foreign National DSCR & NON-DSCR Program Highlights:
• No FICO
• No housing history required from country of origin
• No non-traditional tradelines required
• Close in an LLC with no visa requirements
• Foreign assets allowed
• Foreign assets eligible with 30 days bank statements
• Reserves can remain in foreign accounts
• Max loan amount up to $3,000,000 (No Credit Score and higher LTV available for 700+ equivalent profiles)
Where this program shines:
• True second home purchases without forcing business-purpose classification
• Borrowers whose rental income falls short of DSCR requirements
• High-net-worth international clients with strong assets but limited U.S. credit footprint
• Clients who want flexibility without unnecessary restrictions like prepayment penalties
Foreign National DSCR loans are also available with loan amounts up to $3,000,000—giving you multiple ways to structure the deal depending on borrower goals.
💡The Scenario:
Loan Amount: $1,000,000
Transaction: Cash-Out Refinance
LTV: 65%
Occupancy: Primary Residence or Second Home
Why This Wins:
No Income, No Employment, No Problem: We don't require tax returns, W-2s, or even a stated job. Because there is no DTI calculation, we focus on the borrower's credit and the property's value.
Unlimited Cash-Out: Unlike many programs that cap the "cash-in-hand" a borrower can take, the Ally program has no limiton the cash-out amount.
Use Appraised Value Sooner: Your borrower just fixed up a property they purchased with a hard money loan? Get unlimited cashout right away. LTV to be based on lower of purchase price plus documented improvements or appraised value if property acquired less than 3 months ago. LTV to be based on appraised value if acquired 3 months or longer.
High Loan Amounts: We can go all the way up to $3,000,000 for these no-income-verification loans.
Smart Reserve Requirements:
For this $1M scenario at 65% LTV, the borrower only needs to show 2 months of their own funds for reserves.
The rest of the required reserves can come entirely from the cash-out proceeds.
Pro-Tip: If the LTV were 50% or below, 100% of the reserves could come from the cash-out proceeds.
Airbnb Loan Programs — Work with an STR lender that specialize in Airbnbs and vacation rentals. Mortgage loans for short-term vacation rentals and Airbnb properties. Online quotes without credit checks.
☑️ We shop 240+ Lenders including all of the above to find you the rock bottom rate and program for your AIRBNB property purchase or refinance needs.
🤝Your strategic Lending Parter
With 20+ years in the mortgage industry under my belt there isn’t too much in the space that can surprise or impress me. One group that has and who I currently hang my license with is Loan Factory.
Truly tech forward company that both I and my referred clients have all had an exceptional experience with. Since I don’t work ‘both sides’ of any real estate + mortgage transactions - I refer my AIRBNB and STR investors to the first person I recruited into the industry 2004 - Mr. Chiofalo with Loan Factory.
🎯 What We Like
Accurate mortgage pricing tool that does not require a credit check (provided the inputs are accurate so are the terms displayed).
Self Revise Pre Quals. In the STR business there are often pressures that do not accompany standard real estate transactions. I like the ability to adjust Pre Quals on the fly without a request from the mortgage broker.
LOTS of lenders that provide rock bottom rates. There has not been a loan scenario referred that was not doable or highly competitive. In most instances that my investors shop, they come back to Loan Factory because the terms were that much stronger. Also if there is a quirky requirement (like closing in or transferring to an LLC) they’ve found a home for the loan.
Convenience and transparency. The platform itself is very user friendly and the teams behind the scenes are nothing short of outstanding. My clients know where they are in the process and what they need to provide and each has received the terms promised at inception.
👏🏼 With 40+ years of combined lending experience and the power of our 240+ Lenders - we dare you to compare!
For a quick quote or to schedule a AIRBNB Mortgage consultation to qualify or compare terms visit us below!
⬇️ Some of the AIRBNB, STR & DSCR Loan Programs we offer:
NON-QM (Alternative income & asset verification) Spotlight: Asset Depletion & DSCR
Fixed Second Lien Programs up to $500K (Primary, Second, Investment)
JUMBO ARM Specials
Non-Warrantable Condos and Vacant Properties
🚒 Seller Concessions are HOT: Did you know that on second home loans the maximum seller paid concession with as little as 10% down is 6% of the sales price!?
Below is a Seller Concession Cheat Sheet:
🧑🏼🎤Pro Realtor & Investor Concierge: Are you a Realtor closing 10+ Deals annually or an individual investor with more than 3+ properties owned? Ask about our repeat client and portfolio programs that centralize operations. Book your 15 minute Private Mortgage Consultation here.
Call, text or email us anytime,
Joseph Chiofalo | Loan Factory | Licensed NMLS Mortgage Broker
📲954-480-7478 📧 [email protected] | LIVE QUOTES ☑️
Anthony AJ Wong | Loan Factory | Licensed NMLS Mortgage & Licensed OR + CA Real Estate Broker - Sesemi STR Brokers Powered by Fathom Realty
📲541-800-0455 📧 [email protected] | Shop OR STRs🌲