Refinance Airbnb with DSCR Loan in South Bend Now

Stop Proving Your Income: How to Refinance Your Airbnb with a DSCR Loan

SOUTH BEND, INDIANA – AUGUST 23, 2025: For real estate investors, especially those with a successful Airbnb portfolio, traditional financing can feel like a step backward. The frustration of gathering personal tax returns and W-2s to prove income—even when your property is generating significant cash flow—is a common and costly pain point.

The solution? A DSCR (Debt Service Coverage Ratio) loan. This innovative financing tool is changing the game for short-term rental investors, offering a fast, flexible, and efficient way to refinance your Airbnb. This guide will walk you through exactly how to refinance my Airbnb using a DSCR loan, focusing on the unique opportunities in a vibrant market like South Bend, Indiana.

Refinance Your Airbnb with a DSCR Loan:

The Unique Advantage of Refinancing with a DSCR Loan

A traditional cash-out refinance evaluates your ability to repay a loan based on your personal debt-to-income (DTI) ratio. If you’ve been expanding your portfolio, this can become a major hurdle, as lenders get nervous about your personal balance sheet.

A DSCR loan, on the other hand, shifts the focus from you to the asset. The Debt Service Coverage Ratio is a simple calculation: the property’s gross rental income (or projected income) divided by its monthly mortgage payment (PITI). As long as the property’s income is high enough to cover its debt, you’re in a prime position to qualify. This is the unique selling proposition that frees you from the constraints of personal income verification and allows you to unlock the equity in your Airbnb portfolio.

Key benefits for Airbnb investors include:

• No Personal Income Verification: The lender qualifies the property, not you. This is ideal for entrepreneurs, self-employed individuals, or those with multiple income streams.
• Leverage Short-Term Rental Income: Unlike traditional lenders, DSCR lenders are equipped to underwrite based on your Airbnb’s actual or projected short-term rental revenue, often using a 12-month trailing average.
• Unlock Equity for Growth: A DSCR cash-out refinance allows you to pull equity from your existing Airbnb to fund your next investment, all without impacting your personal DTI.

Current Market Insights & DSCR Loan Requirements

As of August 23, 2025, DSCR loan interest rates for investment properties typically range from 7.25% to 9.00%. Several factors can influence where your rate falls within this range:

• The DSCR: A higher DSCR (e.g., 1.30 or above) indicates a stronger, more profitable asset and often leads to a more favorable rate.
• Loan-to-Value (LTV): The amount of equity you’re leaving in the property. A higher LTV (lower down payment/equity) may result in a slightly higher rate.
• Credit Score: While not a personal income loan, your credit score is still a factor. Lenders generally look for a minimum score of 660, with rates improving for scores above 720.

Typical DSCR Loan Requirements:

• Minimum DSCR: The property’s income must be able to cover its debt service. Lenders typically require a DSCR of 1.15x or higher.
• Entity Requirement: The loan is often issued to a business entity (like an LLC), which offers liability protection and separates the asset from your personal finances.
• Property Types: DSCR loans are available for a wide variety of investment properties, including single-family homes, multi-family units, condos, and properties designated for short-term rental use.

The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

Start Quiz

Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

Page 2 of 5

How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

Page 3 of 5

What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

Page 5 of 5

Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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Geo-Targeting South Bend, Indiana: A Short-Term Rental Goldmine

South Bend’s economy is a perfect blend of education, healthcare, and innovation. The city’s major economic drivers—the University of Notre Dame, Memorial Hospital, and Four Winds Casino—create a steady flow of visitors, from football fans and alumni to patients’ families and tourists. This makes South Bend a prime market for a successful short-term rental portfolio.

When considering a refinance in South Bend, focus on these lucrative areas:

• Near the University of Notre Dame (Zip Code 46617): This area is a no-brainer. The demand for short-term rentals spikes for football weekends, graduations, and other university events. A DSCR refinance on a 3- to 5-bedroom home in neighborhoods like Sunnymede can help you unlock equity to acquire another property for your portfolio.
• Downtown South Bend (Zip Code 46601): The downtown revitalization has made this a hub for tourism and business travel. Properties near the Morris Performing Arts Center or the East Race Waterway are excellent candidates for a cash-out refinance to fund improvements or acquire new assets.
• Mishawaka (Zip Code 46545): Located just east of South Bend, Mishawaka benefits from the spillover of Notre Dame traffic and its own attractions. A successful Airbnb here can provide the cash flow needed to qualify for a DSCR loan.

GHC Funding: Your Go-To Partner for Refinancing an Airbnb

When it comes to something as specific as refinancing an Airbnb with a DSCR loan, you need a lender who understands the nuances of short-term rental income. GHC Funding is that lender.

We specialize in a range of solutions, including GHC Funding DSCR Loans, SBA 7a loans, SBA 504 Loans, Bridge Loans, and Alternative Real Estate Financing. Our flexible underwriting process is tailored to the unique income-generating power of your Airbnb, providing a seamless and stress-free refinancing experience. We understand the South Bend market and are committed to helping you scale your investment portfolio efficiently.

Stop leaving equity on the table. It’s time to put your hard-earned assets to work. Contact GHC Funding today for a personalized consultation.

Helpful Resources for South Bend Investors

• REIA of North Central Indiana: A local real estate investors’ association that provides valuable networking, education, and resources for property owners in the region.
• Indiana Real Estate Commission: The official state body that oversees licensing and regulations, providing essential information on compliance and legal requirements for investors.
• Redfin South Bend Housing Market Data: Get up-to-date market stats, including median home prices, days on market, and new listings, to inform your investment decisions.
• South Bend Regional Chamber: A key resource for understanding the local economic landscape, business development, and major growth projects that will impact the housing market.

Q&A: Your Airbnb Refinance Questions Answered

Take the Next Step

Ready to unlock the equity in your South Bend Airbnb and fuel your portfolio’s growth? Don’t let conventional financing hold you back.

Visit ghcfunding.com or call us at 833-572-4327 to speak with a DSCR loan expert and discover how easy it is to refinance your short-term rental.

Get a no obligation quote.

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At GHC Funding, we are commercial finance specialists who guide real estate investors and business owners through the world of alternative lending. Our primary focus is on securing the right capital for your specific goals, whether that's a cash-flow-based DSCR loan for your rental portfolio, an SBA loan to grow your company, or a bridge loan to close a deal quickly and efficiently.

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