Short-term rental investors in coastal Florida live and die on DSCR. Here's exactly how the lenders I work with underwrite Airbnb income, what gets accepted, what gets rejected, and how to structure your deal to land in the "approved" pile.
DSCR stands for Debt-Service Coverage Ratio. It's the ratio of the property's gross rental income to its housing payment (PITIA, principal, interest, tax, insurance, association). Formula:
DSCR = Gross Rental Income / PITIA
Examples:
Most DSCR lenders price your loan based on which DSCR tier you fall into:
Numbers move a little lender to lender, but for a coastal Florida short-term rental this is the honest 2026 baseline I underwrite against:
These are program guidelines, not rate quotes, and every coastal file gets priced on its own facts. The full transactional breakdown for Florida investors lives on the DSCR loan program page. Want the math for your target property? Start with the DSCR calculator.
This is where coastal Florida gets interesting. There are three main methods:
Even for a property you're going to operate as STR, some lenders qualify you off the property's market rent if it were rented as a 12-month lease. Conservative, usually a haircut from STR potential, but the easiest underwrite. Best for coastal markets where LTR rents are strong (most of the Keys, Naples, Sarasota).
The appraiser adds an STR rent schedule based on comparable Airbnb / VRBO listings. Lender uses ~75 to 85% of projected gross to account for vacancy, mgmt fee, and platform fees. Available from a growing list of DSCR lenders. Best for newer STR markets where the property doesn't have a track record yet.
Trailing 12 months of actual booking data, Airbnb / VRBO export, AirDNA report, or co-host PMS export. Lender uses ~85 to 95% of net (after platform fees). Best for properties already operating as STR with a track record. Highest income credit; tightest documentation requirements.
This is where I see deal after deal die. Here's the pattern:
The fix: Quote insurance BEFORE you go under contract. 24-hour turnaround through me. It's the single most useful thing you can do as a coastal investor. You can also ballpark wind and flood cost first with the Coastal Insurance Estimator, then bring me the real property for a firm quote.
DSCR lenders increasingly require proof that the property is legally allowed to operate as an STR. Different markets, different rules:
Sometimes the property pencils to 0.85 or 0.90 DSCR. Don't walk away yet. Levers:
I shop a panel of 60+ DSCR lenders on every deal. The right one depends on FICO, DSCR, property type, and reserves. I don't publish the full panel for competitive reasons, but I'll happily tell you which ones I'm targeting for your specific deal on a 30-minute call.
Before you sign a contract on a coastal Florida STR property:
If the deal still pencils after all that, you have a winner. If it doesn't, you've saved yourself a 6-month ulcer.
Almost every investor pro forma I see treats gross booking revenue as if the owner keeps all of it. Florida does not work that way. Any rental of six months or less is a transient rental, and it gets taxed twice: 6% state sales tax, plus the county's local option transient rental tax on top.
Here are the combined state plus local rates for the coastal markets my clients actually buy in, per the Florida Department of Revenue rate chart effective January 1, 2026:
County discretionary sales surtax can apply on top of those numbers, so treat the chart as the floor, not the ceiling.
Two things trip people up. First, these taxes are collected from the guest, not paid out of the owner's pocket, so they do not reduce your DSCR directly. What they do is raise the all-in nightly price a guest sees, which quietly suppresses occupancy in a market where the guest is comparing your $400 night against a hotel. Second, Airbnb and VRBO collect and remit some of these taxes in some counties and not others. In counties that administer the local tax themselves, you may still have to register with the county tax collector and file returns even though the platform is handling the state portion. Call the county tax collector before your first booking. Getting this wrong is a penalty-and-interest problem, not a rounding error.
You also need a state license. Under Florida Statute 509.242, a property rented to guests more than three times in a calendar year for periods under 30 days, or advertised to the public as a place regularly rented to guests, is a transient public lodging establishment and needs a DBPR vacation rental license. That license number is one of the first documents a DSCR underwriter asks for when you want STR income credited, so pull it early rather than at day 20 of escrow.
Not directly. DSCR loans are non-QM portfolio products. They are not sold to Fannie Mae or Freddie Mac, so agency loan limits do not bind them. Most DSCR programs run to $2 million or $3 million on a single property, and a handful go higher with more money down. That is the whole reason DSCR exists for coastal Florida, where a waterfront STR can price well past what an agency loan would cover.
The limits still matter as a decision point, though, because they mark the line where conventional investment-property financing stops being an option. For 2026:
So the real question is not "does DSCR have a limit," it's "which product should I be in." Rough decision rule I use with investors:
One more piece most investors miss: agency limits go up almost every year, but your Florida property tax bill resets on sale, and in Monroe the reset is the bigger swing. Run both against the same property before you decide. The investment ROI calculator gives you the cash-on-cash side, and the Florida Keys investment loan page covers what changes below Key Largo.
Most lenders want a DSCR of 1.0 or higher for good pricing, and 1.25+ gets you the best rates and biggest loan amounts. A small group of niche lenders will fund down to about 0.75 if you put more money down. On coastal deals I usually run the numbers at several down payment levels to find the point where you clear 1.20 comfortably, because the insurance line can swing the ratio fast.
It depends on the file, the market, and the property. Investor loans usually need more cash in than a primary home, and seasonal or vacation markets like the Keys, Naples, and Anna Maria often call for more. If your credit is under 680 or the property pencils under a 1.0 DSCR, expect a larger down payment. More down payment lowers your PITIA, which directly raises your DSCR, so on a thin coastal deal a bigger down payment is often what saves the loan.
620 is the floor at most DSCR programs. The real pricing improvements come at 680, 700, and 740. Below 680 you'll usually need a larger down payment plus a rate bump. A 740 score paired with a 1.25 DSCR is where the strongest terms live.
Yes. Lenders accept three income sources: long-term-equivalent market rent from a 1007 or 1025, projected STR income from an appraiser's STR rent schedule, or trailing 12-month actual booking data from your Airbnb or VRBO export. Projected and actual STR figures get a haircut, most programs qualify on 70 to 85% of gross to build in vacancy, management, and platform fees.
Six months of PITIA in liquid reserves after closing is typical, and STR files often get asked for six to twelve because seasonal income is lumpy. Reserves are one of the first things a lender cuts your loan amount over, so keep them funded and documented.
Increasingly, yes. DSCR lenders want proof the property can legally operate as an STR before they'll credit the income. Rules vary by market: Monroe County unincorporated areas run a 28-day minimum in most zones, Marathon requires a vacation rental license with a 7-night minimum in most zones, and Key West is not issuing new transient licenses, so you're buying an existing grandfathered one with the property. Always confirm the current ordinance and get the license number in writing from the seller.
Yes. DSCR programs handle rate-and-term and cash-out refinances on investment properties, and a seasoned STR with real booking history usually underwrites cleanly on the trailing-12 method. Cash-out loan-to-value is typically a notch tighter than a purchase, so the same DSCR and reserve rules apply, just at a slightly lower loan-to-value.
Some do, many don't. The gap almost always shows up at the insurance binder, where a national desk assumes a $4,000 premium on a property that actually quotes at $14,000 and the DSCR collapses mid-escrow. That's the whole reason I quote insurance up front and shop a Florida-aware panel instead of one national lender.
Florida charges 6% state sales tax on any rental of six months or less, and the county adds a local option transient rental tax on top. Per the Florida Department of Revenue rate chart effective January 1, 2026, the combined state plus local rate is 11% in Monroe County (the Florida Keys), 11% in Collier County (Naples), 12% in Sarasota County, 12% in Miami-Dade for most of the county, and 11% on the Walton County 30A beach ZIP codes. County discretionary sales surtax can apply on top of that. Airbnb and VRBO collect and remit some of these taxes for you in some counties and not others, so confirm with the county tax collector rather than assuming the platform handles it.
No. DSCR loans are non-QM portfolio products, so they are not bound by Fannie Mae or Freddie Mac loan limits. Most DSCR programs run to $2 million or $3 million, and some go higher with more money down. The 2026 conforming limits still matter as a comparison point: the Florida baseline is $832,750 for a one-unit property and Monroe County, the state's only high-cost county, is $990,150. If your loan fits under those numbers and you can document personal income, conventional investment-property financing usually prices better than DSCR. Above them, or when you would rather not document income at all, DSCR is often the cleaner path.
Tell me where to reach you and which property you are watching. I will underwrite it the way a DSCR lender will, with the real insurance binder number, and show you the ratio, down payment, and rate tier.
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The Mortgage Dock, Eli Sanderlin, NMLS #1983384. Coast2Coast Mortgage, LLC, Company NMLS #376205. Equal Housing Lender. This article is educational and is not a commitment to lend or a rate quote. Loan terms depend on the property, the borrower, and the lender, and are subject to underwriting approval.