Can You Use STR Income to Qualify in Duck Creek?

Thinking about buying a Duck Creek cabin and wondering if your Airbnb or VRBO revenue can help you qualify? You’re not alone. Many buyers want their short‑term rental income to count, but the rules are specific. In this guide, you’ll learn what lenders look for, how appraisals handle STRs, and which documents you should gather in Duck Creek Village. Let’s dive in.

Short answer for Duck Creek

Yes, you can sometimes use short‑term rental (STR) income to qualify, but it depends on three things:

• The loan program you choose, since conventional, FHA/VA, and DSCR lenders treat STRs differently. Fannie Mae’s appraiser guidance also shapes how income can be supported.
• Your documentation, especially tax returns, leases, platform statements, and an appraisal that supports market rent.
• Local legality, including Kane County permits and any HOA or CC&R rules in your subdivision. Kane County recognizes and defines short‑term or vacation rentals, so compliance matters for underwriting. Review the county code definition.

What underwriters want to see

• Two years of federal tax returns with Schedule E that show rental income. If you offer substantial services and report on Schedule C instead, be ready to provide business returns and a P&L. See IRS Publication 527 for rental reporting basics.
• Platform evidence and deposits, such as 1099‑K, annual platform summaries, and bank statements. These often supplement, not replace, tax returns.
• Signed leases or a property‑management agreement when the lender requires proof of ongoing rent.
• An appraisal that supports monthly market rent using Form 1007 when required. Appraisers cannot convert nightly rates to a monthly number for 1007. See Fannie Mae’s update on STRs and Form 1007 and the standard forms page.
• Proof the STR use is legal: Kane County permit or certificate if required, transient‑room tax registration, and written HOA/CC&R confirmation. Start with the Kane County code.

How lenders usually treat STR income

Conventional loans (Fannie Mae and Freddie Mac)

Conventional lenders may allow STR income, but documentation is strict. Lenders can treat STR revenue as rental income or as business income, and if Form 1007 is used the appraiser must support monthly market rent with monthly comparables. See Fannie Mae’s guidance and top trending Selling Guide FAQs. Freddie Mac often expects a longer documented history for short‑term income, commonly a two‑year tax history, unless other leases or history exist. Review Freddie Mac’s documentation expectations.

FHA and VA loans

FHA allows rental income with tight documentation. Expect to provide Schedule E when available or use the appraiser’s market‑rent analysis and leases if there is no two‑year history. Many FHA scenarios apply vacancy or percentage adjustments to convert gross rent to qualifying income. Learn more from this summary of FHA rental‑income rules. VA rules vary by lender and program version, so ask your lender for their VA handbook interpretation and overlays.

DSCR, non‑QM, and portfolio loans

These programs are often the most flexible for STRs. Instead of focusing on your personal debt‑to‑income ratio, they underwrite to the property’s cash flow and may accept platform statements, management P&Ls, and reasonable vacancy and expense assumptions. Terms and reserve requirements vary, and rates can be higher. See this overview of DSCR options for STRs.

Duck Creek specifics: your local checklist

• Confirm STR legality first. Call Kane County Planning and Zoning and verify if your Duck Creek property needs a short‑term rental certificate and transient‑room tax registration. Start with the Kane County code for STRs.
• Check HOA and CC&Rs for rental restrictions. Some subdivisions allow vacation rentals while others restrict them.
• Gather two years of tax returns with Schedule E if you have history. If not, compile 12 to 24 months of platform statements, 1099‑K, and bank deposits. Use IRS Publication 527 to keep reporting consistent.
• Obtain a signed management agreement and a current occupancy calendar if you use a manager.
• Prepare for the appraisal. If your lender requires Form 1007, know that the appraiser will use monthly lease comparables, not nightly rates. See the Fannie Mae forms page for context.

Appraisal reality in resort markets

Even in STR‑heavy areas like Duck Creek, appraisers must value the real property only. Furniture and business value do not count in the appraisal for mortgage purposes. When Form 1007 is required, the appraiser must support a monthly market rent using comparable long‑term rentals. Fannie Mae’s update on STR and 1007 explains why multiplying nightly rates by 30 is not acceptable.

Next steps

• Get clarity from lenders early. Ask whether they will count STR income for your scenario and request their documentation list in writing.
• Assemble your file now. Tax returns, platform statements, 1099‑K, bank deposits, management statements, leases, and local permits make for a smoother approval.
• Plan your appraisal strategy. If market rent needs support, gather any monthly lease comps and provide them to your lender and appraiser when allowed.
• Consider alternatives if needed. If conventional or FHA will not count enough income, explore DSCR or portfolio loans and compare total costs and reserve needs.

If you want a local, hands‑on partner to help you buy, sell, or manage a Duck Creek rental, reach out to Candy Morrison. You will get straight answers and a plan tailored to your goals.

FAQs

Can you count Airbnb income with less than two years of history in Duck Creek?

• Often not for conventional loans, since lenders commonly want a two‑year tax history for short‑term income, though some may allow limited credit with leases and strong documentation.

How do appraisers handle STR income on Form 1007 in Duck Creek?

• The appraiser must support a monthly market rent using monthly lease comps, not nightly STR rates, and only the real property value can be considered.

Do you need a Kane County permit for a Duck Creek STR to count the income?

• Lenders want proof your rental use is legal, which can include county permits, tax registrations, and any HOA approvals required by your subdivision.

Will FHA count projected rent if my Duck Creek cabin is new to STR?

• FHA may use the appraiser’s market‑rent analysis with vacancy or percentage adjustments when you lack a two‑year rental history, subject to lender overlays.

What is a DSCR loan and why consider it for a Duck Creek cabin?

• A DSCR loan focuses on the property’s income versus its payment and often accepts STR documentation like platform statements and manager P&Ls, though rates and reserves can be higher.