Airbnb, VRBO and Self Managed


The Vacation Rental Loan program provides real estate investors with an outstanding long-term financing option. Over the years, vacation rentals have become a more profitable choice than conventional buy-and-hold rental properties among real estate investors. These non-owner-occupied short-term rentals have made it quite easy for families to get accommodation while away on vacation. They also offer more flexibility and freedom than hotel lodgings would. 

Furthermore, vacation rentals are profitable assets for real estate investors and companies due to their high-profit margins and better capacity for growth. As a long-term investment strategy, vacation rentals can result in more returns in the form of appreciation if held for an appropriate period. With efficient planning and pertinent market research, any real estate investor can make a successful business out of vacation rentals.

Program Overview

Variable and fixed-term options are obtainable for the vacation rental loan programs. While certain programs may be restricted geographically, the majority are available in larger Metropolitan Statistical Areas nationwide.

The Vacation rental loan program issues loans reaching up to $2,000,000 to investors for both the purchase and refinancing of investment property. Fort Knox Capital offers the fairest loans for these vacation rentals than anywhere else, with interest rates starting at 7.25% and terms up to 30 years fixed, 3/1 ARM, and 5/1 ARM. Small vacation rental loans can also be gotten from us for amounts below $2,000,000, with exceptions available.

Property Type:
  • Single family homes, Condos & Townhomes
  • 2-4 units - Duplex, Triplex and Quadplex
Income Qualification:
  • Debt Service Coverage Ratio (DSCR)

  • Trailing 12-month rental history (or)

  • Appraisal w/ 1007 reflecting short-term rental data
Loan Terms:
  • 30 year fixed
  • 3/1 ARM
  • 5/1 ARM
Loan Amount:
  • Min. $150,000
  • Up to $2,000,000
  • 680 FICO
  • Starting at 7.25%
  • 1.5% + origination
Loan to Value:
  • Up to 75%
    LTV (SFR, Townhome)
  • Up to 70% LTV (2-4 Units, Condo or CT, IL, NJ, NY properties)
Cashout Refinance
  • Up to 70% LTV (SFR, Townhome)
  • Up to 65% LTV (2-4 Units, Condo or CT, IL, NJ, NY properties)
  • Individual, LLC or Corporation
  • Foreign National OK
  • No Taxes or Personal
    income needed
  • *Terms may vary based on geographic location, asset class, terms, and sponsor.

Quote Requirements

Several variables influence a quote for a vacation rental loan closing cost. Therefore, providing relevant details is important. This helps avoid incorrect quotes and suppositions. Here are the basic details we ask for to effectively deliver a soft quote:

Due Diligence

If an investor wishes to go ahead with the quote that has been provided, a letter of intent will then be issued along with an appraisal fee to order the appraisal.

Factors like the size, condition, comparable difficulties, and location of the investment property influence the cost of the appraisal fee. Appraisal fees for any 1-4 unit property with rental reports can range from $500 – $1,800.

Item Review:

There are several documents we request for internal review while waiting for Appraisal and Title reports during our Due Diligence. Having these documents present and readily available with your assistance helps simplify the entire underwriting process.


  • Completed Application
  • Two months of bank / financial statements (all pages)
  • Personal Financial Statement
  • Real Estate Owned or REO schedule
  • Credit Authorization
  • ID

Borrowing Entity

  • Articles of Incorporation
  • Operating Agreement
  • Organization Chart (if any)
  • Federal EIN letter


  • Purchase and Sale Agreement (if purchase)
  • For Refinances we will review one or both..
    • (a) Trailing 12 months of Rental history from the rental site
    • (b) Trailing 12 months of bank statements 
  • For Purchases, we will review one or both.. 
    • (a) the appraisal with short-term rental stats 
    • (b) or seller’s provided rental history if available
  • Insurance policy and contact info.
  • Tax Statement
  • HOA contact info or questionnaire (if any)
  • Evidence showing local city allows short-term rental 
  • Property management agreements (if any)
  • Property management resume (if any)
  • Current mortgage statement or payoff (if refi)

Vacation Rental Types

Single-Family Rentals

A single-family rental is a standalone residential property that is designed to be used as a single-residence unit for two or more individuals. Single-family rentals consist of general space and facilities for use by the occupants of the unit.

SFR properties are now the fastest-growing segment of the housing market, and when it comes to alternative investments, single-family rentals are hard to beat. These rental properties have constantly yielded remarkable amounts of profit to investors. Many real estate investors are now moving their assets to the Single-family rental market because of its excellent returns through appreciation and rental income.


Townhomes, also known as row houses, are quite similar but different from single-family rentals. These properties are built as single-residence units, but unlike SFRs, they share a wall or two with the neighboring townhomes. This means that occupants may have neighbors on either side of their buildings but not below or above them.

Townhomes make good real estate investments, and investors keep turning to townhome vacation rentals for plenty of good reasons. These properties are cheaper than a lot of single-family rentals because they are inexpensive to build and are low in demand. Townhomes also require a low level of maintenance allowing real estate investors to enjoy passive income from townhome vacation rentals.

2-4 Unit Properties

2-4 unit properties, sometimes referred to as duplexes, triplexes, and four-plexes, are quasi mini apartment complexes with two or three available units for vacation rentals. In a 2-4 unit property, the units are separated, having rooms, bathrooms, kitchens, and utility meters. This means that each unit should have the same amenities as a legal single-family rental.

2-4 unit properties are relatively cheaper to purchase than multiple or large properties. Real estate investors can also enjoy several benefits, such as being able to spread out the vacancy risks and maintenance expenses across two to four units instead of having just a single unit.


A condo is one of the different individually owned units in a residential building complex. Condos continue to be in high demand amongst real estate investors relatively because these properties remain comparably affordable amidst inflating home prices and increasing mortgage rates.

Real estate investors can make smart investments by investing in condos for vacation rentals as they tend to generate more income. Condos are generally cheaper to purchase than traditional homes. In addition to being fairly cheaper, condos require low-level maintenance and provide added amenities.

vacation rental lender
vacation rental loan
short term rental loan


What is a Vacation Rental Loan?

A vacation rental loan is a finance option provided by a bank or private money lender to an individual or corporate real estate investor to purchase properties for vacation rentals. Finance obtained from this loan is expected to be paid back with interest in due time and secured by the investment property and its proceeds.

Our vacation rental loans are the best and offer investors a financing option for a variety of housing units such as single-family rentals, 2-4 unit properties (duplexes, triplexes, and four-plexes), townhomes, and condos. A vacation rental loan funds the purchase, renovation, and refinancing of vacation rental property at satisfactory interest rates.

How Do Vacation Rental Loans Work?

Vacation rental loans can only be used to fund short-term guest rental stay models, including the purchase and refinancing of Vacation rental properties. They are available to new and experienced investors that do not want to utilize all their cash into the property and still take tax advantage of interest debt.

Vacation rental loans come with interest rates starting at 7.25% and terms up to 30 years fixed, 3/1 ARM, and 5/1 ARM depending on the loan package. Although vacation rental loans are a breakthrough for most real estate investors, some qualifications must be met.

To qualify for a vacation rental loan, investors must possess the minimum credit score, provide the last 12 months of rental history when refinancing, and lender-ordered appraisal with satisfactory short-term rental stats. Your Down payment and 3 months of PITI (Principal, interest, tax, insurance) reserve.

What are the Benefits of Vacation Rental Loans?

Vacation rental loans come with benefits for the real estate investor. They are:

  • The purchase and refinancing of vacation rental property assets offer a much easier qualifying process for underwriting guidelines when the going market rent will not justify the current market appraised value or loan amount. ie; when the Appraised market value is $1,00,000 but the leasing market rate is $2,500 versus the higher $6,500 true short-term rental performance (or) the potential Short-Term Rental Stats/Data provided by the Appraiser.

How to Qualify for a Vacation Rental Loan?

Real estate investors who seek funding for their vacation rental investments are needed to meet specific requirements before they can qualify for vacation rental loans. Here are some of the basic requirements.

  • Keep your credit score and history clean with no recent major events, no mortgage late payments within the last 24 months, and your Mid-score above 680.
  • Having enough capital is important. You should have not only your down payment amount available but also 3 months of PITI reserve. This pertains to both a property purchase or a refinance. Your financial reserves should include your monthly principal, interest, tax, and insurance payments
  • You may hire a third-party short-term rental property manager for your first short-term rental property.
  • It is important to analyze the income potential when purchasing a property or analyzing your last 12 months’ rental performance when refinancing your current property. Ideally, the debt-service coverage ratio DSCR should be at 1.25%. However, Ratios below 1.25% may still qualify at reduced leverages.

How Long Does it Usually Take to Close a Loan?

Generally, we can close a vacation rental loan in approximately 2 weeks once we have a completed appraisal for our underwriter to review and title for our legal team to review and draw loan documents.

Can I Lock my Rate and When?

No, we do not offer rate locks on vacation rental loans due to the volatility of the market which can go up and down throughout the underwriting process. Your loan rate will be secure once we draw loan documents for the escrow agent at closing.

What Factors Should I Consider When Looking to Invest in a Vacation Rental?

The first thing that you should consider before investing in a vacation rental is the location. If you are looking to invest in a vacation rental, it is important to make sure that you have enough space for your guests to enjoy.

The size of the property, the number of bedrooms, how many beds per bedroom, the number of bathrooms, the size of the kitchen to accommodate and feed each guest, and the number of amenities you can accommodate will help you net a higher daily rental rate and more occupancy days per year.

You may also want to consider investing in an apartment or house that has an open floor plan and large windows so that your guests will be able to see the ocean from their balconies. Some other factors to consider include the income growth potential of the property and the property’s condition.

It is vital to consider additional costs you would incur during the period of time that you would own the vacation property, and in the long-term, you should consider retirement potential. These factors which can be envisaged to an extent at the start of any investment should guide your decision in the choice of vacation rental property.

Are Vacation Rentals Subject to Self Employment Taxes?

If you offer services of a substantial nature to your occupants, IRS rules dictate that your income is subject to self-employment taxes. These substantial services refer to services that are targeted at increasing the comfort and convenience of your guests and are not necessarily required for proper maintenance of the property, such as maid service.

Can You Use Your Vacation Rental Personally?

Yes, you can use your vacation rental personally. However, if you use it for more than 14 days or for more than 10% of the total number of days it was rented, it will automatically be considered a place of residence by the IRS. This is in terms of the IRS code for “personal residence”.

If you finance a vacation rental property with us, the original intention would be that it serves as an  “investment property”  and not as your personal residence. Conversely, you can stay in your vacation rental property for the purpose of maintaining the property as a landlord.

Let Us Review Your Loan Scenario Or Project..