/PROGRAM · Business purpose
Short-term rental loans
A conventional lender qualifies you on personal debt-to-income and ignores what the property earns, so your buying power looks smaller than it is. Or the lender caps how many properties you can finance. Or it wants two years of returns, which make clean short-term rental income look messy once depreciation has run through them.
- Scope
- Business-purpose loan. Available in any state. Not for owner-occupied properties.
- Best if
- the property will earn by the night and you want that income to count.
- Not for
- a property you’ll live in, even part of it, and a long-term lease is DSCR, not this.
- First step
- Send the address and your plan for the property.
Financing for an Airbnb or VRBO-style property, underwritten on what the property earns by the night rather than on your personal income. Business purpose, on a property you do not occupy.
Who a short-term rental loan is for
First short-term rental
Months of market research on a specific area, no rental owned yet.
Operator scaling the portfolio
Three to six units running, real platform earnings history, shopping for the next one.
Second home converting to a rental
Bought as a personal second home, now renting it to offset carrying costs.
Buying into a regulated market
Permit caps or an HOA vote pending, and you want financing that doesn’t box you in if the property has to switch to a long-term rental.
How a short-term rental loan works
- 01
Send the address and your plan for the property.
- 02
With no booking history yet, income is typically supported by a market or short-term rent estimate, a market data report or an appraiser’s opinion, rather than a track record.
- 03
On business-purpose files the underwrite centers on the property, not your personal returns.
- 04
The property has to be one you do not occupy. An owner-occupied house-hack is not eligible for this program.
Questions about a short-term rental loan
I don’t have rental history yet, how would anyone lend on projected income?
That’s normal for a first short-term rental. A market-rent or short-term rental income estimate usually stands in for a track record. It varies by scenario, so I’d want the actual address before saying what it pencils to.
Is this more expensive than a regular mortgage?
It is priced differently, and for a reason: nobody lives there, the income is seasonal, and the lender is underwriting the property rather than you. What that comes to on your deal depends on the address, so send me one and you will be comparing real terms instead of guessing.
My last lender said I hit a max financed-property limit.
That’s a specific lender’s overlay, not a universal rule. I’d want to see your current portfolio and the new deal to tell you where you actually stand.
My realtor said short-term rental income doesn’t count toward qualifying.
That depends on the program and how the income is documented. It isn’t a blanket no. Send me the listing and I’ll tell you what’s possible.
If the city restricts short-term rentals after I buy, am I stuck?
Permit and ordinance questions belong with the city or a local attorney. I stay in the lender lane. What I can do is structure financing that doesn’t box you in if the property ever has to become a long-term rental.
Related reading
All guides →Documenting short-term rental income when you have no booking history
The first short-term rental is the hardest to finance, because the thing that qualifies it hasn’t happened yet.
Financing an Airbnb that has no rental history yet
A property with no bookings behind it has no income to show. Lenders have two ways of handling that, and which one applies decides the file.
Send this scenario
Tell me the property and the plan and I’ll come back with what’s eligible. Eligibility and terms vary by scenario.