Airbnb host · 3 yrs · 725 · DSCR
| Borrower | Short-term-rental host (two existing STRs) |
| Self-employed | 3 years hosting |
| Credit | 725 |
| Program | DSCR loan (1.31 ratio on 12-month STR actuals) |
| Price | $390,000 (illustrative) |
| Down payment | 25% |
| State | TN |
| Outcome | Approved |
The scenario
Three years of hosting two cabins had produced strong platform income — and tax returns engineered to show very little of it, with depreciation and furnishing write-offs doing their job. For property number three, personal-income underwriting was the wrong tool entirely.
A DSCR program qualified the purchase on the property itself. The lender accepted twelve months of the target market's short-term-rental performance — supported by the host's own two properties' platform statements — against the full PITIA, producing a 1.31 ratio. The loan closed in the host's LLC at 25% down, with six months of the property's payment in reserves and a prepayment-penalty structure typical of investor loans. Personal tax returns were never part of the income analysis.
What made it work
- 1.31 DSCR — rent comfortably above the full payment — cleared the 1.25 pricing tier
- Twelve months of STR actuals from comparable operations supported the income figure
- 25% down plus six months of property reserves matched investor-program expectations
- LLC vesting and a documented permit kept the business-purpose file clean
Lessons you can use
The property qualified so the tax returns didn't have to
Aggressive (and legitimate) depreciation had made personal-income qualifying nearly impossible — and irrelevant. DSCR underwriting asks one question: does this property's income cover its payment? For an experienced host expanding a portfolio, that's the question you want asked.
STR income needs STR evidence
Programs differ on whether they price short-term rents or default to the lower long-term market figure. Twelve months of real platform statements — the host's own track record plus market data — is what earned the STR number here; without it, the same purchase would have needed a bigger down payment to hit the ratio.
Business-purpose means business discipline
The LLC vesting, the landlord insurance, the permit in the file, and the no-owner-occupancy certification all point one direction: this is an investment loan on an investment property. Treating those formalities casually is how investor files — and worse — go sideways.
Your next step
If this scenario rhymes with your situation, start with Mortgages for Airbnb & short-term-rental hosts for the full picture, then run your own numbers with the DSCR calculator. Every real application is different — use these scenarios to learn the patterns, then confirm specifics with a licensed loan officer.
This profile is a composite educational scenario created by Mortgage Merlin editorial staff — not a real person, transaction, or testimonial. Figures are illustrative and not a quote, pre-approval, or offer of credit. Mortgage Merlin is a publisher, not a lender or broker.