New Orleans is Louisiana's best-known vacation rental city, and also one of its most restricted. The city largely bars non-owner-occupied short-term rentals in residential neighborhoods, so investors often look at commercial zones in the city or at other markets around the state.
In short: Yes. LendingStreet finances short-term rental DSCR loans on 1-8 unit investment properties in Louisiana, and on some programs the loan qualifies on projected nightly-rental revenue instead of a long-term lease. There are no W-2s or tax returns, LLC borrowers are standard, the minimum credit score is 620 and loans start at $150,000. Outside a few commercial and mixed-use areas of New Orleans, investors focus on Baton Rouge, the Northshore, Lafayette and lake markets, and insurance is the line to watch everywhere.
In New Orleans, commercial short-term rentals are generally limited to commercial and mixed-use zones, with permits and limits, while whole-home rentals in residential areas are tied to owner occupancy. Investors who want to be in the city usually buy in those permitted zones, often small multi-unit buildings near the French Quarter, the Central Business District or Magazine Street corridors where zoning allows.
Baton Rouge fills on LSU football weekends and draws state government and medical travel. Lafayette has festivals and Cajun Country tourism. Mandeville and Covington on the Northshore attract families and event guests, and Toledo Bend Reservoir and Lake Charles add lake and casino traffic. Grand Isle is a small fishing and beach market.
| Market | Who books | What to check |
|---|---|---|
| New Orleans commercial zones | Festival and convention visitors | City permit, zoning, limits |
| Baton Rouge | LSU game days, state travel | City-parish rules, flood zone |
| Northshore | Families, event guests | Parish permit, HOA rules |
| Toledo Bend and Lake Charles | Anglers, casino visitors | Shoreline, wind coverage |
New Orleans has rewritten its short-term rental rules several times. Whole-home rentals in residential zones are limited to owners who live on site, and commercial permits are limited by zone and, in some areas, by block. Rules and court decisions continue to shift, so confirm current status with the city before buying.
Outside New Orleans, parishes and cities set their own rules. St. Tammany Parish requires permits, and Baton Rouge and Lafayette apply zoning and registration. HOAs can also restrict rentals. Check the exact address.
A DSCR loan compares the property's income with its monthly payment: principal, interest, property taxes, insurance and any HOA dues. On a short-term rental, some programs use a third-party revenue projection for the address, often with comparable listings nearby, instead of a signed long-term lease. Others use the property's own booking history when it has one.
The standard minimum ratio is 1.0x, with sub-1.0 programs for some files. Purchases go up to 80% LTV and cash-out refinances up to 75% LTV, though maximum leverage on short-term rentals and larger balances varies by program. Terms up to 30 years are available, and LLC borrowers are standard. Properties from one to eight units qualify, so a duplex or a small group of cabins on one parcel can work; nine or more units is a commercial loan.
Louisiana applies state and local sales taxes to short-term lodging, and parishes and cities add occupancy taxes. New Orleans adds its own per-night fees on short-term rentals. Platforms collect many of these, but registration with the parish may still be required.
Insurance is the biggest variable in Louisiana. Wind and hurricane coverage has become expensive since recent storms, some owners rely on Louisiana Citizens, and flood insurance is generally required in mapped flood zones, which cover much of south Louisiana. An elevation certificate helps with flood quotes.
Louisiana's homestead exemption only applies to an owner's primary residence, and parishes reassess every four years, so budget on the full non-homestead bill.
Older raised homes and shotgun-style houses are common in parts of the state, and carriers look closely at roof age, wiring and elevation. Newer construction built to current elevation standards often insures more easily.
This example is illustrative and not a quote. An investor buys a three-bedroom home a short drive from LSU for $310,000. A projection for comparable homes shows $32,000 a year in gross revenue. At 75% LTV the loan is $232,500, and estimated principal and interest on a 30-year term is about $1,626 a month. Add $290 in taxes, $330 in insurance, and the payment is about $2,246. $2,667 of average monthly revenue divided by that payment gives a DSCR of about 1.19x.
At 70% LTV instead, the loan drops to $217,000, the payment falls to about $2,137 and the DSCR rises to about 1.25x, in exchange for $15,500 more cash at closing. Insurance is larger than taxes here, which is common in Louisiana. A higher flood or wind quote would cut into the ratio quickly, so get quotes during the inspection period.
| Item | Amount |
|---|---|
| Purchase price | $310,000 |
| Loan amount at 75% LTV | $232,500 |
| Down payment | $77,500 |
| Projected annual revenue | $32,000 |
| Average monthly revenue | $2,667 |
| Estimated principal and interest (30-year) | $1,626 |
| Property taxes | $290 |
| Insurance | $330 |
| HOA dues | None |
| Total monthly payment | $2,246 |
| DSCR | About 1.19x |
New Orleans peaks around Mardi Gras, Jazz Fest, the Sugar Bowl and big conventions, and slows in late summer. Baton Rouge depends on LSU football season and graduation. Lafayette has spring festivals. Hurricane season, from June through November, adds risk to bookings across the coast.
Having these on hand keeps underwriting and the appraisal moving:
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us the address, purchase price, expected revenue and target loan amount. We test the ratio against the real tax and insurance figures, raise rule or HOA questions early and lay out options, including qualifying on long-term rent where that works better.
We lend in Orleans, East Baton Rouge, St. Tammany, Lafayette and the rest of Louisiana's parishes. Use the form below or call (877) 298-1001.
Generally not in residential zones, where whole-home rentals are tied to owner occupancy. Commercial permits are limited to certain zones.
Baton Rouge, the Northshore, Lafayette and lake markets have more options, subject to local permits and HOA rules.
Wind, hurricane and flood premiums can be large and sit inside the DSCR payment, so they lower the ratio dollar for dollar.
The ratio uses average monthly revenue across the year, so football weekends must carry slower months.
On some programs, yes. A third-party revenue projection for the address can replace a long-term lease. If the projection comes in low, a larger down payment, a sub-1.0 program or long-term rent can still make the deal work.
No. The loan qualifies on the property's income. You need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so a second home you use yourself is not a fit.
Plan for the down payment, closing costs and reserves. Short-term rental programs and larger loans can require more down than the 80% LTV maximum implies, so it varies by program.
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