For most of mortgage history, buying a rental property meant proving you could carry it yourself. The lender looked at your pay, your debts, and your tax returns, and the property's own income was a supporting actor at best. A short-stay operator breaks that script in every particular: the income arrives nightly, varies by season, comes through platforms rather than leases, and often does not exist yet at all — because the property has never been rented short-term before. Financing that purchase required a different question, and the industry's answer was to stop asking what the borrower earns and start asking what the property earns.
The instrument that carries that question is the DSCR loan, named for the debt service coverage ratio: the property's income divided by its debt service. In its strictest form, the ratio divides annual net operating income by annual mortgage payments. In the short-stay programs most borrowers actually meet, the working version is simpler and more forgiving: monthly rental income divided by the full monthly PITIA payment — principal, interest, taxes, insurance, and association dues. A ratio of 1.00 means the rent exactly covers the payment. A ratio of 1.25 means the property generates 25% more income than it costs to carry. That second number is the one that matters most: across lender guides published in 2026, 1.00 to 1.25 is the typical qualifying range, with 1.25 and above unlocking the best rates and terms.
The practical consequence is that a borrower with no pay stubs to show can still buy — provided the property's numbers work. DSCR loans are non-QM products, sitting outside conventional qualified-mortgage rules, and they generally require no tax returns, no W-2s, and no personal income verification. That is precisely why they fit operators whose income is irregular, seasonal, or held inside a company: specialist programs allow borrowing through an LLC or corporate entity, which keeps the property's liabilities separate from the borrower's personal balance sheet. The trade is price and cushion. DSCR rates run higher than conventional mortgages, reflecting the lender's risk, and down payments are larger: 20% to 25% is the standard range across specialist guides, with weaker files — lower ratios, lower credit — pushed toward 30% or more, and some programs asking as much as 35% when credit is less than strong.
What counts as income is where short-stay underwriting gets specific, and where deals are won or lost. A lender will use one of three things: documented short-stay income from the property's own history, a third-party revenue projection, or long-term market rent. The first is the strongest evidence and the rarest at purchase, since the seller's history does not automatically transfer into the buyer's underwriting. The second is the workhorse for acquisitions: projections from data providers such as AirDNA, sometimes alongside a second provider, built into an appraiser's market-rent analysis. The third is the trap. A lender that underwrites a vacation rental on long-term rent comps instead of short-stay income can quietly cut the qualifying income by a third or more — so the first question a borrower should ask any lender is not the rate, but which income figure the program counts.
Even when a lender counts short-stay income, it rarely counts all of it. Projections get discounted — a haircut — because nightly income is volatile in a way a lease is not. Published 2026 lender guidance puts that haircut at 20% to 25% on projected short-term rental income, and one specialist lender's own published terms discount projected income by 20% for new investors while allowing experienced operators with nearby properties to use the full projection. The discipline this imposes is useful: run the ratio on the discounted number, not the optimistic one, and a property that only works at full projection is a property that does not work. Seasonality sharpens the same point. A beach house that prints money in July and sits quiet in February must cover twelve months of debt service on a full year of income, not on its best quarter — and the lender's annual math, for all its simplifications, enforces exactly that.
The conventional route has not disappeared; it has narrowed. A conventional investment-property loan typically requires 20% to 25% down and personal income verification, and many conventional lenders will not count short-term rental income for qualification at all — or will only count it with a documented rental history on that specific property. That leaves the conventional path workable for a borrower buying a second home for occasional rental use, and unworkable for an operator whose whole model is nightly income on a property with no history. The choice between the two routes is therefore less about rate shopping than about which income the borrower actually has to show.
Rates themselves deserve a warning label. Lender-published guides in 2026 put DSCR pricing for well-qualified short-stay borrowers in a wide band — one guide published in March 2026 described rates from approximately 6.0% to 8.75% for residential investment properties, while another lender's guide published in October 2026 described program pricing starting at 5.8% on a 30-year fixed term, with short-stay files carrying their own pricing adjustments. Those are dated, lender-published snapshots, not a current quote, and they move with credit score, ratio, down payment, and market conditions. What is durable across them is the structure: the best pricing sits at ratios of 1.25 and above and credit scores in the high 600s and up, with one specialist program setting a 680 minimum credit score and another accepting 620 with better terms at 680 and above. Reserves matter too — roughly six months of PITIA in liquid assets after closing is a common expectation, and some programs scale that requirement with loan size.
Scale is where the specialist model proves itself. One dedicated vacation-rental program reports more than $3.5 billion in DSCR loans financed since 2012, including over $990 million in vacation-rental properties, with purchase and refinance loans up to 80% loan-to-value and 30-year fixed terms carrying no balloon payment. Another specialist publishes loan sizes from $100,000 to $3.5 million, purchase loan-to-value up to 85% for the strongest credit profiles, and closings averaging 14 to 35 days. Those are lender-published program terms, not market averages, but they sketch the shape of the market: large enough to have specialists, standardized enough to have published matrices, and competitive enough that a borrower can compare programs on ratio thresholds rather than on vibes.
The acquisition playbook that follows from all of this is short. First, underwrite the property before the lender does, on discounted projected income, and walk away from anything that needs the full projection to clear 1.00. Second, ask every lender, in writing, which income figure it counts and what haircut it applies — the answer changes the deal more than a quarter-point of rate. Third, budget the real down payment: 20% to 25% as the planning range, more if the ratio is thin or the market is seasonal. Fourth, confirm the property may legally be rented short-term where it sits, because a lender that verifies local permission will decline a property in a banned market no matter how good its numbers look. Do those four things and the financing question stops being the reason a short-stay acquisition fails. It becomes, as it should be, a test the property either passes or does not.
Sources: Visio Lending, Short-Term Rental Loan Guide (DSCR qualification on property cash flow, not personal income; 30-year fixed terms with no balloon payments; purchase and refinance up to 80% LTV; more than $3.5 billion in DSCR loans since 2012, including over $990 million in vacation-rental properties; 20% to 25% down payments, up to 35% with weaker credit; minimum property value $150,000; minimum loan $75,000; minimum credit score 680), https://visiolending.com/resources/short-term-rental-guide/. Host Financial, Short-Term Rental Loans (property income, not personal income, qualifies the loan; 12+ months actual STR income, projected STR income, or market rents; loan sizes $100,000 to $3.5 million; purchase LTV up to 85%; DSCR 1.00x or greater, sub-1.00x options available; typical down payments 15% to 25%; minimum credit score 620, 680+ preferred; projected income discounted 20% for new investors; average close 14 to 35 days), https://www.hostfinancial.com/short-term-rental-loans-mortgages/?airdeed. DSCR loan guides (minimum DSCR typically 1.0 to 1.25; 1.25+ for best terms; down payments 20% to 30%; credit scores generally 620 to 680; projected STR income haircut 20% to 25%; reserves around six months of PITIA), https://www.bnbcalc.com/blog/airbnb-business/buying-rental-property/what-is-a-dscr-loan-for-airbnbs, https://neuhausre.com/dscr-loan-requirements/, https://www.mtgstrategists.com/blog/dscr-loan-qualification-requirements-2026. Rate snapshots, labeled as dated lender-published figures, not current quotes: March 2026 guide describing approximately 6.0% to 8.75% for residential investment properties, https://staystra.com/dscr-loan-short-term-rental-2026-investor-guide/; October 2026 guide describing program pricing starting at 5.8% on a 30-year fixed term, https://www.pinnaclefundingnetwork.com/guides/str-lending-guide.html.