The rise of short-term rental platforms like Airbnb and VRBO has allowed everyday homeowners to venture into the rental space. However, financing these properties can still be a hurdle.
That’s where short-term rental loans come into the picture. These specialized mortgage programs are designed to help investors purchase properties intended for short-term rentals.
This guide will explain short-term rental loans and how to qualify so you can confidently finance your next Airbnb or VRBO property.
Short-term rental loans are mortgages used to purchase properties meant for renting out on a short-term basis, typically through platforms like Airbnb and VRBO. Unlike traditional home loans, short-term rental loans are structured to accommodate the unique cash flow and risk profile of vacation properties.
These loans can be used to:
Make your dream home a reality with the right mortgage.
Get StartedLenders typically look for the following when assessing loan applications for short-term rental financing:
Lenders typically require a minimum score of 620+.
At least 15%–25% of the purchase price is typically expected.
6–12 months of rental history may be required to show rental income, though market rent projections may also be acceptable.
3–6 months’ worth of mortgage payments in cash reserves may be required to show financial stability.
Rental properties should ideally be located in areas with strong tourism demand and no restrictions on short-term rentals.
Owning a short-term rental property can come with significant tax perks:
Always consult a tax professional to remain compliant with IRS rules while maximizing your deductions.
While short-term rental loans can be accessible and lucrative, they’re not without their drawbacks:
To boost your odds of loan approval when applying for short-term rental financing, consider the following tips:
Lenders often hesitate to finance short-term rentals with traditional mortgages for several reasons:
Given these factors, short-term rental mortgages are typically used to finance these types of investment properties. The following provides a more detailed breakdown of how short-term rental loans compare to traditional mortgages:
Short-Term Rental Loans
Traditional Mortgages
Investment property for short-term rentals
Primary residence or long-term rentals
The property’s rental income
Borrower’s personal income
Cash reserves, rental income history/projected income, & property details
Full income verification required, including tax returns and W-2s
Slightly higher than conventional mortgages
Lower, if the borrower qualifies conventionally
Typically 15%–25%
As low as 3%–5%
Minimum 620+
Minimum 620+
Traditional mortgages typically require personal income verification, while short-term rental loans focus on the property’s income potential.
Not always. Many short-term rental loans don’t require tax returns or W-2s. Instead, they rely on the property’s projected or actual rental income.
Most lenders require a minimum credit score of 620, though higher scores can help you secure better terms and lower rates.
Expect to pay 15% to 25% upfront, depending on your situation.
Yes, many short-term rental loan types allow you to purchase or refinance under a business entity.
Yes, many lenders offer cash-out refinance options so you can access your property’s equity to fund renovations or new investments.
Short-term rental loans can close in as little as 2 to 3 weeks, especially if you’re using an experienced mortgage lender.
No, these are specialized loans that not all lenders offer. You’ll need to work with a mortgage company that offers these niche loan programs.
It certainly helps. Getting pre-approved for a short-term rental loan will give you a clear idea of how much you can borrow and will make you seem like a more serious and qualified borrower in the eyes of the seller.
Our loan officers are ready and waiting to help you apply for your home loan.
Short-term rental loans add another layer of opportunity for real estate investors, particularly as the vacation rental market becomes increasingly popular. Whether you’re considering a beach home, a downtown condo, or a townhouse close to amusement parks, these loans offer the flexibility and structure you need to close the deal, without having to come up with traditional income documentation.
If you’re looking to buy a short-term vacation property in the Pacific Northwest region and need funding to finance this purchase, we can help. At Sammamish Mortgage, we offer various self-employed mortgage home loan programs for those without traditional employment documentation in WA, OR, ID, CO, and CA. Contact us today to have your mortgage questions answered, or visit our website to get an instant rate quote!
Get Started
Whether you’re buying a home or ready to refinance, our professionals can help.
{hours_open} - {hours_closed} Pacific
No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.
Washington 
Oregon 
