Michigan STR financing
Short-term rental DSCR loans in Michigan
Quick answer
Some wholesale DSCR programs count short-term rental income on Michigan properties, but only where the use is lawful under local rules. Grand Rapids limits short-term lodging to owner-occupied homes, Ann Arbor restricts non-owner-occupied STRs to mixed-use districts, and lake and resort towns set their own rules. Confirm the use first, then the financing.
Start with the local rule, not the revenue estimate
Short-term rental regulation in Michigan is mostly local. Cities, townships and some lake associations decide whether investor-owned whole-home rentals are allowed, whether a license is required and how many nights are permitted. A lender will generally count STR income only where the use is lawful, so a strong revenue projection does not help if the zoning does not allow it.
- Grand Rapids: short-term lodging is generally limited to owner-occupied homes with the owner present. An investor-owned whole-home STR there should be underwritten on long-term rent.
- Ann Arbor: non-owner-occupied short-term rentals are allowed only in mixed-use zoning districts, and they require a license.
- Northern Michigan and lakeshore towns: rules differ township by township. Some welcome rentals with registration; others restrict them in residential zones. See Northern Michigan rentals.
Not legal advice. Confirm the current rule with the municipality and your own counsel before you buy.
How lenders document STR income
Programs differ. Some use the property’s own booking history, usually twelve months of platform statements. Others accept a short-term rental income projection from an appraiser or a third-party data report for properties without history. Some underwrite only on long-term market rent even if the property operates as an STR.
Michigan’s strong seasonality matters here. A lake cottage may earn most of its revenue between late spring and early fall. Lenders that use trailing history will see that seasonality averaged out; projection-based programs may haircut it. Plan for the conservative figure.
Costs to put in your STR ratio
STR operators often pay utilities, internet, cleaning, supplies and platform fees. Some lenders deduct an expense factor from gross STR revenue before calculating the ratio. Insurance for short-term rentals usually costs more than a standard landlord policy, and properties on or near water may need flood coverage. Use the DSCR calculator with the full insurance and tax figures.
Compare the two income approaches in STR vs LTR DSCR.
No personal use
Loans arranged on this site are business-purpose only. A cottage that your family will use for its own vacations is a second home, not an investment property, and we do not arrange financing for it.
Questions investors ask
Can I use short-term rental income to qualify in Michigan?
Sometimes. It depends on whether local rules allow the use and on the lender’s program. Some lenders use booking history, some use projections and some use only long-term rent.
Can I get a DSCR loan on a lake cabin up north?
Only if it is a business-purpose rental you will not use personally, local rules allow short-term rentals and the lender accepts the property type and STR income.
Have a Michigan rental in mind?
Send the address, the rent and the uncapped tax estimate. We shop the scenario with wholesale lenders and come back with options that fit the property.