You can finance an Airbnb, but the loan you qualify for may not be the one you expect, and the income you think the property earns may not be the income a lender will count. A conventional lender usually qualifies you on your own personal income and debt-to-income ratio, not the property’s projected bookings. That single fact is why a property that looks profitable in an Airbnb ROI calculator can still be declined.
It is the most expensive misunderstanding in the short-term rental space. People assume they can hand the bank an AirDNA projection and qualify on it, then they find out that gross revenue is not qualifying income. This playbook maps the loan types to the situations they fit, explains exactly how lenders count (and discount) short-term rental income, and walks the DSCR math, the second-home rules, the down payments, and the refinance break-even so you know where you stand before you ever fill out an application.
Can I get a mortgage on a property I’ll Airbnb?
Yes, and the right loan depends on your situation. If you will genuinely use the property part of the year, a second-home loan fits. If you can qualify on your personal income and debt-to-income ratio, a conventional investment loan fits. If you cannot, or you are scaling past the point where personal income works, a DSCR loan qualifies the property on its own cash flow instead.
The rest of this guide works through each branch. Start by getting the property’s own numbers right in the Airbnb ROI calculator and the monthly payment in the mortgage calculator, then bring those numbers to the financing question.
What are the loan types, and who does each fit?
Four loans cover most one-to-four-unit short-term rentals: the conventional investment loan, the second-home loan, the DSCR loan, and equity tools like a HELOC or a cash-out refinance. A few others (portfolio, seller financing, hard money) exist for specific cases and carry their own risks.
| Loan type | Qualifies on | Typical down | STR income counted? | Best for |
|---|---|---|---|---|
| Conventional investment | Personal income + DTI | 15% to 25% | Documented, discounted | W-2 buyers with DTI room |
| Second home | Personal income + DTI | about 10% | No, future rent cannot qualify | Genuine part-time personal use |
| DSCR | Property cash flow | 20% to 30% | Yes, projected or actual, discounted | Investors and LLC buyers scaling |
| HELOC | Equity in another property | n/a (a credit line) | No | Funding a down payment or rehab |
| Cash-out refinance | Equity + income | leave 25% to 30% equity | Documented | Pulling equity from a held property |
Conventional investment loan
A conventional loan is backed by Fannie Mae or Freddie Mac and qualifies you on your personal income and debt-to-income ratio. It fits W-2 buyers with strong income and few financed properties. The minimum down payment on a one-unit investment property is about 15 percent, per Fannie Mae’s Eligibility Matrix, though 20 to 25 percent is common in practice, and investor pricing runs above a primary residence. Projected short-term rental income generally does not count; documented rental income may, at a discount. The ceiling is your DTI, which caps how many properties you can carry.
Second-home loan
A second-home loan is for a property you personally use part of the year. It needs only about 10 percent down, but it cannot be a full-time rental, cannot be under a management agreement that controls occupancy, and future rental income cannot be used to qualify, per Fannie Mae. Short-term renting is generally allowed if the home stays primarily for your own use. Treating an investment property as a second home to get the lower terms is fraud, which the second-home section below covers directly.
DSCR loan
A DSCR loan is a non-QM loan that qualifies on the property’s cash flow rather than your income. It fits investors who are scaling, self-employed borrowers, or anyone buying through an LLC. Documentation is lighter (entity papers, reserves, and an appraisal with a rent analysis, but usually no tax returns), and some programs will use a short-term rental projection, discounted. The tradeoffs are a higher rate, a possible prepayment penalty, and reserve requirements. It gets its own section below.
HELOC and cash-out refinance
These are equity tools, not purchase loans. A HELOC lets you borrow against the equity in your primary home or an existing rental to fund a down payment or a renovation, with an interest-only draw period followed by full repayment. Watch the variable rate and the payment shock when repayment begins; the HELOC calculator shows both. A cash-out refinance replaces your mortgage with a larger one and hands you the difference; on an investment property the loan-to-value is typically capped near 70 to 75 percent.
Portfolio loans, seller financing, and hard money fill specific gaps. A portfolio loan is kept on a bank’s own books for borrowers past conventional limits. Hard money is short-term, high-rate, asset-based financing for acquisition or rehab before a refinance, and it carries real refinance risk if the exit does not materialize. Use these with care and a clear exit plan.
How do lenders actually count Airbnb income?
They count a documented, discounted figure, not your projected gross. Conventional underwriting leans on documented income (tax returns, a Schedule E history) or appraised long-term market rent, while DSCR programs may use a short-term rental projection and then haircut it for vacancy and expenses. Either way, the number that reaches your file is far below the headline revenue.
The appraisal is where this surprises people. Fannie Mae’s Form 1007 (one-unit) and Form 1025 (two-to-four-unit) estimate monthly market rent from long-term lease comparables. Per Fannie Mae’s 2024 appraiser guidance, Form 1007 was not designed for short-term rentals, and an appraiser must not simply multiply a nightly rate by 30. The lender decides whether to treat short-term rental income as business income (no 1007) or as rental income (a 1007 built on long-term comps). The long-term market rent on that form is usually well below gross Airbnb revenue, which is exactly why conventional treatment can make a strong short-term rental look weak.
A profitable calculator is not loan approval
A property that looks great in an Airbnb ROI calculator can still fail underwriting, because the lender counts a discounted, documented income figure rather than your projected gross. Model the deal, then confirm with a lender how they will treat the income before you assume the financing works.
What is a DSCR loan, and how do lenders use it for STRs?
A DSCR loan qualifies on the debt service coverage ratio: the property’s income divided by its debt service, where debt service is PITIA (principal, interest, taxes, insurance, and any association dues). A ratio of 1.0 means the property exactly covers its payment; many lenders want about 1.25, and some will go to 0.75 with more down and stronger reserves. Thresholds are illustrative and vary by lender.
Here is the math with round numbers. Say a lender takes your projected short-term rental revenue and, after a conservative 20 percent haircut, treats 4,800 dollars a month as usable income. Your PITIA is 3,800 dollars.
- DSCR = 4,800 divided by 3,800 = 1.26, which clears a 1.25 threshold and qualifies.
- Now suppose occupancy slips and usable revenue falls to 3,600 dollars. DSCR = 3,600 divided by 3,800 = 0.95, which is below 1.0 and likely declined.
The lesson is that the ratio is fragile to occupancy. A loan that qualifies in a strong projection can fall apart in a normal slow season, so stress-test it. A DSCR loan is easier to qualify for than a conventional loan because it skips personal income documentation, but it is not no-doc: you still need credit (often around 620 to 680 or higher), roughly six months of reserves, an appraisal, and entity documents if you borrow through an LLC. And it usually carries a rate premium of roughly half a point to a point and a half above conventional, plus a prepayment penalty, commonly a step-down like 5-4-3-2-1 percent over the first several years. For the long-term-rental version of the ratio and a worked qualification example, see DSCR loans explained.
Second home vs investment property: why does honesty matter?
Because the difference in terms is large and the temptation to mislabel is real. A second home needs about 10 percent down and a lower rate; an investment property needs 15 to 25 percent down and a higher rate. Fannie Mae defines the occupancy types with different loan-to-value, down-payment, and reserve rules, and the line is not yours to blur.
Occupancy misrepresentation is mortgage fraud
Labeling an investment property as a second home or a primary residence to get a lower rate or smaller down payment is occupancy fraud, a form of mortgage fraud (CFPB, Fannie Mae). Lenders and the agencies review occupancy patterns after closing. Be honest about how you will use the property; the savings are not worth the risk.
The practical test is genuine personal use. A second home is one-unit, borrower-occupied for part of the year, and not subject to a management agreement that hands occupancy control to someone else, and you cannot use future rental income to qualify. You can short-term rent it if it stays primarily for your personal use. The moment it becomes a full-time rental run for income, it is an investment property, and it should be financed as one.
How much down payment will you need?
It depends on occupancy type and loan program: roughly 10 percent for a second home, 15 to 25 percent for a conventional investment property, and 20 to 30 percent for a DSCR loan. All of these vary by lender, credit score, reserves, property type, and, for DSCR, the property’s cash flow. They are illustrative, not quotes.
| Loan type | Typical down | Can STR income help qualify? | Key caveat | Best calculator |
|---|---|---|---|---|
| Second-home conventional | about 10% | No, future rent cannot qualify | Must genuinely occupy it | Home Affordability |
| Investment conventional | 15% to 25% | Documented rent, discounted | Investor pricing runs higher | Mortgage |
| DSCR | 20% to 30% | Yes, projected or actual, discounted | Rate premium plus prepay penalty | Mortgage |
| Cash-out refinance | leave 25% to 30% equity | Documented income | Seasoning of 6 to 12 months | Refinance |
To gauge whether you qualify on personal income for the conventional and second-home routes, run your numbers through the home affordability calculator, and use the mortgage calculator for the payment that drives your debt service.
Should I refinance my short-term rental when rates drop?
Only if you pass the break-even point before you sell or refinance again, and the new term and balance do not erase the benefit. The break-even is simple: divide your closing costs by your monthly savings to get the number of months it takes to recoup the cost of the refinance.
In that example, 6,000 dollars of closing costs and 250 dollars of monthly savings break even at 24 months. If you expect to sell in eighteen months, the refinance loses money even though the rate is lower. Two more traps: resetting a fresh 30-year term can raise your lifetime interest even at a lower rate, and a cash-out refinance that raises your balance or rate enough can wipe out the property’s cash flow. If your existing loan is a DSCR loan with a prepayment penalty, factor that in too.
Rates are a moving target. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed around 6.36 percent in mid-May 2026, then 6.53 percent later that month, and 6.49 percent as of late June 2026, with investment-property rates pricing roughly a point higher. Run your own numbers in the refinance calculator with current quotes rather than a number from an article.
Your next step
Get the property’s own numbers right first, starting with the market itself: is the Airbnb market saturated in 2026 covers the supply and regulation picture a lender will never check for you. Run the deal in the Airbnb ROI calculator, get the monthly payment in the mortgage calculator, and if a refinance is on the table, check the break-even in the refinance calculator. Then take those numbers to a lender and ask the one question that decides everything: how will you treat this property’s income? The answer tells you which loan you are really applying for.
If you have not yet sized the cash to get the property guest-ready, build it in the Airbnb Startup Cost Calculator and read The True Cost of Starting an Airbnb next, because your furnishing and reserve cash is exactly what a lender will want to see in your reserves. For the underlying deal math, the Airbnb investment calculator playbook and how to calculate Airbnb income show how the revenue and return are built, and what counts as a good ROI in 2026 sets the bar.
This is educational information, not financial, tax, legal, or lending advice. Lender requirements, rates, down-payment minimums, and DSCR thresholds vary widely by lender, program, and your situation, and they change over time. The figures here are illustrative and drawn from the dated sources cited; your numbers will differ. Confirm current terms with your lender and a qualified professional before you commit money.