Washington, DC is one of the strictest short-term rental cities in the country. The District limits short-term rentals to a host's primary residence, which means a non-owner-occupied investment property cannot legally operate as an Airbnb.
In short: LendingStreet finances 1-8 unit investment property in Washington, DC with DSCR loans, but District law limits short-term rentals to a host's primary residence, so an investor-owned property cannot qualify as an Airbnb. For a rowhouse or condo you do not live in, the loan qualifies on long-term market rent instead, with no W-2s or tax returns, a 620 minimum credit score and loans from $150,000. Investors who want nightly income usually buy a second property in a nearby state where investor STRs are allowed.
Many District investors rent furnished units on stays of 30 days or longer to traveling nurses, interns, government contractors and people relocating. Capitol Hill, Navy Yard, NoMa, Columbia Heights, Petworth and areas near the hospitals see steady demand for those stays. Lenders usually size these loans on long-term market rent rather than nightly revenue.
Investors who want true nightly-rental income often look outside the District: Maryland's Ocean City and Deep Creek Lake, Delaware's beach towns, or Virginia markets where local rules allow non-owner-occupied STRs.
| Market | Who books | What to check |
|---|---|---|
| Capitol Hill and Navy Yard | Contractors, interns, relocations | 30-day minimum, condo rules |
| Columbia Heights and Petworth | Medical and long-stay guests | Rental license, unit count |
| Ocean City, Maryland | Summer beach families | Town license, condo rules |
| Delaware beach towns | Weekly summer rentals | Town license, flood zone |
The District's short-term rental law requires a license and allows short-term rentals only in the host's primary residence. When the host is not present, the law also limits the number of nights per year. A property you own as an investment and do not live in does not qualify.
Stays of 30 days or more fall outside the short-term rental rules but still require a basic business license for rental housing, and the District's tenant protections can apply. Condo and co-op buildings may set their own minimum stays.
The ratio is simple: monthly income divided by the monthly payment, where the payment includes principal, interest, taxes, insurance and HOA dues. What changes on a short-term rental is the income figure. Some programs accept a projection of nightly-rental revenue from a third-party data provider; others lean on 12 months of booking history.
A ratio of 1.0x or better meets the standard minimum, and some programs go below it. Leverage tops out at 80% LTV on a purchase and 75% on a cash-out refinance, but short-term rental programs and bigger balances can be lower, so it varies by program. No W-2s, a 620 minimum score, LLC borrowers welcome and terms up to 30 years. The program covers one to eight units, which includes duplexes and small cottage groups; nine units or more is handled as commercial.
Stays under 30 days in the District are subject to its transient lodging tax, which is part of why the rules are tightly enforced. Longer furnished stays generally fall outside it. Confirm current treatment with the Office of Tax and Revenue.
The District taxes residential property on assessed value, and the homestead deduction only applies to an owner's primary residence, so an investor's bill will be higher than an owner-occupant's. Vacant or blighted properties can be taxed at much higher classes, so keep the unit leased.
Rowhouses often need updated roofs, electrical and party-wall work, which can affect insurance. Condo dues in newer buildings around Navy Yard and NoMa can be high and go straight into the ratio.
This example is illustrative and not a quote. Because a District investment property cannot run as an Airbnb, this example uses long-term rent. An investor buys a two-unit rowhouse in Petworth for $850,000 with combined market rent of $6,000 a month. At 75% LTV the loan is $637,500, and estimated principal and interest on a 30-year term is about $4,457 a month. Add $500 in taxes, $180 in insurance, and the payment is about $5,137. $6,000 of average monthly revenue divided by that payment gives a DSCR of about 1.17x.
If the projection came in lower, the investor could borrow less. At 70% LTV the loan is $595,000, the payment about $4,840 and the DSCR about 1.24x, with $42,500 more brought to closing. This file works on long-term rent alone. If the same investor wanted nightly income, the realistic path would be a second property in a nearby state where investor STRs are allowed.
| Item | Amount |
|---|---|
| Purchase price | $850,000 |
| Loan amount at 75% LTV | $637,500 |
| Down payment | $212,500 |
| Annual market rent, both units | $72,000 |
| Average monthly revenue | $6,000 |
| Estimated principal and interest (30-year) | $4,457 |
| Property taxes | $500 |
| Insurance | $180 |
| HOA dues | None |
| Total monthly payment | $5,137 |
| DSCR | About 1.17x |
Furnished 30-day-plus demand in the District follows the congressional calendar, summer internships, hospital rotations and federal contract cycles. Summer is the busiest period for interns, while medical and contractor demand is steadier. Lenders typically underwrite these properties on long-term market rent, so plan on that figure rather than furnished premiums.
For a District property qualifying on long-term rent, gather these before you apply:
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, current or market rent and target leverage. The financing team runs the ratio on long-term rent, checks it at a few loan amounts and lays out options, including sub-1.0 DSCR programs where they fit.
We lend on 1-8 unit investment property across the District, and on short-term rentals in nearby states where rules allow them. Call (877) 298-1001 or use the form below to get a quote.
No. District law limits short-term rentals to the host's primary residence, which non-owner-occupied investment property does not meet.
Yes, stays of 30 days or longer fall outside the short-term rental rules, though a rental housing license and tenant protections can apply.
Most programs use long-term market rent from the appraisal rather than furnished or nightly revenue.
Many look at Maryland's Ocean City or Deep Creek Lake, Delaware's beach towns or Virginia markets where local rules allow investor STRs.
Not on every program. Some qualify a short-term rental on projected nightly revenue or on its booking history instead of a 12-month lease.
Yes. Once you have booking history, a rate-and-term or cash-out refinance can use actual revenue. Our STR refinance guide, linked below, covers how that works.
No. Our investor loans are business-purpose loans on non-owner-occupied property only, so primary and second homes are out.
Timing depends mostly on the appraisal, title and insurance. A complete file with the revenue projection, permit confirmation and insurance quote in hand moves fastest.
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