Short-Term Rental / Airbnb / VRBO Loans
Vacation rental financing for Arizona's Sedona, Flagstaff, Phoenix-metro, and beyond. Two underwriting paths — long-term market rent or 12-month STR-history — with major implications for what loan size your property qualifies.
Quick answer
- Property type: non-owner-occupied vacation rental — Airbnb, Vrbo, or other short-term rental platform.
- Underwriting basis: two paths. STR-history path uses 12 months of platform statements (Airbnb, Vrbo) or AirDNA report. Long-term-rent path uses appraiser's market rent as if it were a long-term lease.
- Max LTV: 75% purchase, 70% cash-out on most programs.
- Min FICO: 660; 700+ for higher LTV.
- Min DSCR: 1.00 on most; pricing improvements at 1.20+.
- Closing in LLC: widely allowed.
- Critical: STR eligibility verification — city ordinances + HOA bylaws checked before underwriting.
Why STR financing is its own conversation
Standard DSCR underwriting uses the appraiser's long-term market rent for a comparable lease. That number often understates the actual cash flow of a well-located short-term rental — because the same property generating $5,500/month on Airbnb might rent for $2,800/month long-term.
Two financing paths handle this differently:
Path 1 — STR History Underwriting
- Uses 12 months of platform statements (Airbnb / Vrbo) or an AirDNA report for the subject property.
- Net income (after platform fees, cleaning, expected vacancy) becomes the qualifying income.
- Available on select DSCR programs — premium pricing offset by the higher qualifying income.
- Best for refinancing an existing STR with a track record.
Path 2 — Long-Term Market Rent Underwriting
- Uses appraiser's market-rent estimate (Form 1007 / 1025) as if for a comparable long-term lease.
- Most conservative path — tends to understate STR cash flow.
- Standard on most DSCR programs by default.
- Best for new STR purchases where you don't yet have history.
STR-eligibility verification — do this before the offer
Three places STR can be prohibited or restricted, and you need to clear all three before you write an offer:
- City / county ordinance. Many Arizona municipalities now restrict short-term rentals or require permits. Phoenix, Scottsdale, Sedona, and Flagstaff all have specific STR rules — check each property's address against the current local code.
- HOA bylaws. Many HOAs (especially in master-planned Scottsdale and Sedona communities) prohibit STR entirely or impose minimum-stay rules. Read the CC&Rs.
- Insurance carrier. Standard homeowners insurance often excludes commercial / STR use. You'll need a specific STR insurance product before closing.
Where STR financing works well in Arizona
- Sedona — strong year-round STR demand; Sedona has a city STR ordinance that requires registration but generally permits STR.
- Flagstaff — strong seasonal demand; restrictions exist on short-term rentals in certain residential zones.
- Phoenix metro — mixed picture; some HOAs prohibit, some allow. Scottsdale Old Town and certain parts of Phoenix have favorable rules.
- Tucson — generally permissive but HOA-specific.
- Lake Havasu / Prescott / Payson — vacation rental demand strong in all three.
For a deeper read on what new STR landlords should plan for, see our guide for new short-term-rental landlords.
Worked example — Sedona STR refinance
Investor owns a 3BR Sedona vacation home, financed with a long-term-rent DSCR loan two years ago. Long-term rent estimate: $3,400/month. Actual STR performance over the last 12 months: $96,000 gross / $74,000 net after platform fees, cleaning, and a 25% vacancy assumption = $6,167/month net.
| Underwriting basis | Monthly income used | Implied DSCR (PITIA $4,200) |
|---|---|---|
| Long-term market rent | $3,400 | 0.81 |
| STR history (12-mo platform statements) | $6,167 | 1.47 |
Refinancing onto an STR-history-aware program changes the loan from "barely qualifies, lower LTV" to "comfortably qualifies, full LTV available." Pricing premium for the STR-history path typically pays for itself within the first year on properties this skewed.
FAQ
Can I buy an Airbnb with no STR track record?
Yes — first-purchase financing uses long-term market rent as the income basis. Once you have 12 months of platform history, you can refinance onto an STR-history program if the math improves.
AirDNA reports — are they accepted?
Yes on certain programs. AirDNA gives a property-specific 12-month income projection based on comparables. Some lenders accept it as the income basis; others require actual platform statements.
What if my city bans Airbnb?
Then the property doesn't qualify for STR financing and you should know that before you write the offer. Some Arizona municipalities have changed their STR rules multiple times in the last few years — verify current ordinance, not the version you remember.
Can I use STR financing on a primary residence I rent part-time?
No — STR financing is non-owner-occupied. If you live there primarily and rent it part-time, you need conventional or jumbo owner-occupied financing.
How is reserves calculated for STR?
Typically 6 months PITIA on the subject property, sometimes more for high-LTV STR loans. Some programs require an additional STR-specific reserve buffer.
LLC closing OK?
Yes — same as standard DSCR. Closing in an LLC is widely allowed and often preferred for liability separation.
Curious if Short-Term Rental / Airbnb / VRBO Loans is the right fit?
Bring the property details — we'll model real numbers in 20 minutes.