STR projected income accepted
Underwriting reads the projected nightly-rate revenue, not the long-term rent comp. That captures the actual earning capacity of a vacation rental property.
Short-term rental loans for Texas Airbnb / VRBO investors.
DSCR-style underwriting using projected STR income — for Texas vacation rental investors in the Hill Country, Galveston, San Antonio, and Austin tourist neighborhoods.
- AirDNA / Mashvisor projections accepted
- 12-month reserve requirements
- DSCR-style underwriting
A DSCR variant that qualifies on projected nightly-rate income.
A short-term rental (STR) loan is a DSCR-variant Non-QM mortgage for properties used as Airbnb, VRBO, or similar short-term vacation rentals. Unlike standard DSCR — which uses long-term lease comps — STR loans accept projected nightly-rate income from third-party data providers like AirDNA, Mashvisor, and Rabbu. Higher reserves are required because STR income is more volatile season-to-season than long-term rent. Personal income is not reviewed; the property and its projected STR cash flow carry the file.
How an STR loan goes from inquiry to close.
- 01
Verify the property is permitted for STR use
Before anything else, we confirm the HOA allows short-term rentals and the city ordinance permits STR at this address. Several Texas cities (notably Austin) impose meaningful STR licensing and zoning restrictions — getting clarity here first prevents a wasted appraisal.
- 02
Pull AirDNA / Mashvisor projection report
A third-party STR data provider generates a projected revenue report based on comparable nightly-rate listings, occupancy rates, and seasonality for the specific submarket. This becomes the income input for DSCR.
- 03
Calculate projected DSCR using STR income
STR DSCR equals projected monthly STR income (after typical operating cost adjustments) divided by PITIA. Most STR lenders want DSCR of 1.0 or higher; some price tightest at 1.10+ to account for STR volatility.
- 04
Document the required reserves
STR loans require higher reserves than standard DSCR — typically 6-12 months PITIA per property — because STR income fluctuates seasonally. We line up the reserve documentation as part of the application.
- 05
Close
Closing disclosure goes out at least three business days before close per TRID. You sign at title (often as the LLC manager), funds wire, and you take title.
Built for Texas STR investors in vacation markets.
Texas has some of the strongest STR submarkets in the country — Hill Country wineries, Galveston beach, San Antonio downtown, Austin music tourism. Standard DSCR underwriting often misses the upside because it uses long-term rent comps even when the property runs as a vacation rental. STR loans price the property on what it actually earns. We work STR files in Fredericksburg, Wimberley, Lake Travis, Galveston, and the San Antonio Pearl District — and we know which lenders accept which AirDNA confidence tiers.
STR is the right tool when:
- You are buying Hill Country STR — Fredericksburg, Wimberley, Lake Travis
- You are buying Galveston beach rental property
- You are buying San Antonio downtown / Pearl District
- You are buying Austin East-side neighborhoods (verify city ordinance)
- You are buying Houston Medical Center / Galleria short-stay
Why STR loans win for Texas vacation rental investors.
AirDNA / Mashvisor reports valid
Third-party STR data providers (AirDNA, Mashvisor, Rabbu) produce the income projection. The lender accepts these reports directly — no bespoke appraiser opinion required for the income side.
DSCR-style qualification
No personal income or DTI scrub. The property either covers its payment with the projected STR income or it does not — that is the entire underwriting question on the income side.
No personal income / DTI scrub
Tax returns, W-2s, and pay stubs are not part of the file. Self-employed investors and high-net-worth borrowers with complex income pictures clear underwriting cleanly.
LLC vesting allowed
Most STR lenders prefer or require LLC vesting — meaningful for asset protection and for investors who run their STR portfolio as a real business.
Cash-out refi available
Once an STR is operating with documented revenue history, cash-out refinance is widely available — useful for pulling equity to acquire the next property in the portfolio.
6-12
Months PITIA reserves required
Short-term rental loan questions, answered.
What income source qualifies?
Projected STR income from a third-party data provider (AirDNA, Mashvisor, Rabbu) is the standard. If the property is already operating as an STR, lenders may also accept 12+ months of documented host revenue (e.g., Airbnb / VRBO earnings reports). Some lenders blend both sources.
Why are reserves higher than DSCR?
Short-term rental income is more volatile than long-term lease income — seasonality, market events, and occupancy swings all affect monthly revenue. Lenders offset that volatility by requiring higher reserves (6-12 months PITIA) so the loan can carry through a soft season without distress.
Do I need to be operating as STR already?
No. STR loans are widely available for first-time STR purchases — the AirDNA projection is what underwriting uses, and you do not need an operating history. Existing-operator files (with revenue history to share) often see slightly better pricing.
What about HOA STR restrictions?
HOAs and city ordinances both matter. Many Texas HOAs prohibit STR outright, and several cities (Austin most prominently) impose licensing, zoning, and density restrictions. We verify HOA bylaws and city ordinance compliance before issuing a pre-approval — this is the single most common reason STR deals die.
Can I use this for first-time STR purchase?
Yes. STR projection-based underwriting is specifically designed for first-time STR purchases — the AirDNA projection report stands in for operator history. As long as the property is in an STR-permitted zone and the projection pencils, the loan funds.
How does AirDNA factor into qualification?
AirDNA generates a property-specific revenue projection based on comparable nightly-rate listings in the submarket, including projected occupancy, average daily rate, and seasonality. The lender uses the projected monthly revenue (often discounted for operating costs and vacancy) as the income input for the DSCR calculation. Higher AirDNA confidence scores translate to better loan terms.
Buying a Texas STR? Let's run the projection numbers.
Short-term rental loan requirements at a glance.
- Investment property only
- Property permitted for STR (verify HOA + city ordinance — important: some Texas cities restrict)
- AirDNA or comparable projection report
- DSCR of 1.0 or higher (some lenders require 1.10 for STR)
- 25-35% down typical
- FICO 680+
- 6-12 months PITIA reserves
- Texas property
- LLC vesting OK
STR Loan vs Standard DSCR vs Conventional Investment.
| Income source | Reserves | Best for | Limitations | |
|---|---|---|---|---|
| STR Loan | Projected STR income (AirDNA) | 6-12 months PITIA | Vacation rentals in tourist markets | HOA / city STR restrictions disqualify many properties |
| Standard DSCR | Long-term lease comps | 3-6 months PITIA | Long-term rental hold investors | Underestimates STR upside in vacation markets |
| Conventional Investment | Personal tax-return income | 2-6 months PITI | Investors inside the Fannie 10-cap with clean income | Does not credit STR projections at all |
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Short-Term Rental Loan available across Texas, including:
Other ways we close
DSCR Loan
Long-term rental DSCR — the right tool when the property runs on long-term leases instead of nightly bookings.
Learn moreForeign National Loan
For non-US citizens buying Texas STR property — common in Hill Country and Galveston vacation markets.
Learn morePortfolio / Blanket Loans
Single loan across 5+ STR or rental properties — useful when scaling a vacation rental portfolio.
Learn more