What is better when it comes to a loan for STR, MTR, 2nd home/vacation home?

[Ruth Schrader-Grace]

It's easy to go with conventional as most are versed in that product yet there are so many other options out there. It seems the few lenders I've spoken with all want to direct to conventional vs anything else. Is it because of their commissions, the risks or what? And what type of loan product have you found to be the best for the above scenarios? 

[Robin Simon]

Quote from @Ruth Schrader-Grace:

It's easy to go with conventional as most are versed in that product yet there are so many other options out there. It seems the few lenders I've spoken with all want to direct to conventional vs anything else. Is it because of their commissions, the risks or what? And what type of loan product have you found to be the best for the above scenarios? 

 Sharing an article published just last year on BP on this exact question:

Short-Term Rental Loans: What Are the Options and How Do DSCR Loans Stack Up?

https://www.biggerpockets.com/blog/short-term-rental-loans-a...

High Level -

-Conventional will typically offer lowest rates/fees but harder to qualify, especially if you are scaling and past the first couple of properties or going for the high-end of the market

-2nd Home (10% Down) - should be very careful here - these are not intended for STR properties and people using them for pure investment properties are entering dangerous territory (you are attesting to use it as a rental half the year or less, no management, need to live in proximity, etc.)

- DSCR Loans - typically your best bet if you don't quality (or have "outgrown") conventional or looking to scale a portfolio or diving into more specialized markets. Note - DSCR lenders can vary quite a bit when it comes to their underwriting/qualification/overall friendliness towards STRs so make sure you are aware of the differences