Craftsman bungalow with a welcoming front porch in Nashville, Tennessee

Permit required legality checked 2026-04-18

Will Your Airbnb Qualify for a DSCR Loan in Nashville, TN?

Sometimes — Nashville is a zoning story. Non-owner-occupied (investor) STR permits aren’t issued in most residential zones, only in commercial/mixed-use zoning, where they remain available. If the parcel is eligible, there’s no night cap and revenue isn’t haircut; a typical 3BR projects near the median below and STR lenders will fund the projection.

Strong urban STR demand, but non-owner-occupied permits are restricted in residential zones.

Revenue band

Typical STR revenue in Nashville

Annual gross revenue by bedroom count — median of 21 comparable listings within 1 mi, trailing 12 mo (AirROI + Rabbu comps, as of 2026-06-01).

Bedrooms	P25	Median	P75
1 BR	$26,500	$34,000	$41,500
2 BR	$38,000	$48,500	$59,000
3 BR	$48,500	$62,000	$75,500
4 BR	$62,000	$79,500	$97,000
5 BR	$75,000	$96,000	$117,000

The ordinance

Is short-term rental legal in Nashville?

Metro Nashville distinguishes owner-occupied (STRP Type 2) from non-owner-occupied (Type 1) permits.

Non-owner-occupied permits are not issued in most residential zoning districts; they are available in commercial and mixed-use zones, where investor STRs continue to operate.

For an investor DSCR deal, zoning is the gate: a commercially-zoned or mixed-use parcel can hold a non-owner-occupied permit; a standard residential parcel generally cannot. There is no night cap once a valid permit is held.

Source: Metro Nashville Code §17.16.250(E) — Short Term Rental Property · last checked 2026-04-18.

Worked example · $525,000 3BR, 25% down

1.54×cap-adjusted STR DSCR

9 lenders clear

Illustrative; run your exact address and price above for your numbers.

Living rates

Today’s STR DSCR rate range

STR-overlay rates (70–75% LTV), updated 2026-06-13. Estimates; not a commitment to lend.

760+ FICO

7.7%

+0.6% STR overlay

740-759 FICO

7.85%

+0.6% STR overlay

720-739 FICO

8.15%

+0.6% STR overlay

700-719 FICO

8.45%

+0.6% STR overlay

See the full living rates table →

FAQ

Nashville STR financing questions

Can I get an investor STR permit in Nashville?

Only in the right zone. Nashville prohibits non-owner-occupied (Type 1) STR permits in most residential districts, but allows them in commercial and mixed-use zoning. Confirm the parcel’s zoning before underwriting it as a non-owner-occupied short-term rental.

Does Nashville cap STR nights?

No. Once a valid permit is in place, Nashville does not impose an annual night cap, so projected revenue is not adjusted down for legality — the constraint is permit eligibility (zoning), not nights.

What if my Nashville property can’t get a non-owner-occupied permit?

Then the STR-investment path likely doesn’t pencil at that address. A mid-term-rental (30+ day) strategy can re-qualify the deal on long-term rent comps — run the pivot to see whether it still cash-flows.

Can I get a DSCR loan on an Airbnb with no rental history?

Yes. 9 of the 10 STR lenders we track qualify the loan on a market revenue projection (AirDNA/Rabbu) or an appraiser’s Form 1007 short-term-rent schedule, so no operating history is required for many programs.

What down payment and LTV do STR DSCR loans require?

Most STR DSCR programs want 25–30% down (70–75% LTV) — slightly more than a long-term-rental DSCR loan, reflecting the variability of nightly income. A stronger cap-adjusted DSCR and credit band can unlock the higher-LTV tier.

What DSCR do STR lenders require?

Most set a floor around 1.0 on the cap-adjusted DSCR (revenue ÷ PITIA). Some offer no-ratio or sub-1.0 STR programs at a premium for thinner deals. The engine shows your ratio against each lender’s specific floor.

Do lenders trust AirDNA or Rabbu revenue numbers?

Some STR-specialist lenders accept a data projection (AirDNA/Rabbu) directly; others want the same revenue expressed through an appraiser’s Form 1007. Either way, the comp count, radius, and trailing-12-month window behind the figure determine how defensible it is.

How does STR insurance affect my DSCR?

STR carriers price coverage materially higher than a standard landlord policy, so we model insurance higher than a long-term rental inside PITIA. That extra cost is a real DSCR haircut most pro-formas miss — the engine bakes it in.

Nashville STR laws Qualify with no history STR DSCR requirements

Legality: Short-term-rental rules change frequently and vary by city, county, and HOA. Legality shown reflects publicly available sources as of the date displayed; it is not legal advice or a permitting determination. Confirm current rules, permits, and HOA/condo restrictions with the local jurisdiction before purchasing.

Revenue: Projected revenue is an estimate from comparable listings and is not a forecast of your results. Lenders independently verify income, typically via appraisal (Form 1007/1008) or 12-month statements. This is not a loan decision or offer.

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