The sources of income available to people has expanded in dramatic fashion over the years. More people are relying on unconventional sources of income as a primary means of support as opposed to drawing a salary or earning an hourly wage. At MortgageDepot, providing superior service to our borrowers means finding loan programs with underwriting guidelines that accommodate how our borrowers earn a living. An example of this is a Fannie Mae program that is perfect for people earning income from Airbnb rentals.
Fannie Mae Airbnb program
Airbnb provides homeowners with a website on which they can list their homes for rent to people desiring an alternative to hotels, motels and resorts when vacationing. The entire transaction, from finding a property by looking at photos and descriptions posted by the property owner to paying the rental cost, is handled through the Airbnb website.
Traditionally, homeowners applying for loans to refinance their homes could run into underwriting problems if all or part of the reported income came from Airbnb rentals, but a new loan program has brought a change. A Fannie Mae pilot program now permits homeowners to use the rental income derived from a primary residence listed and rented on Airbnb to supplement a primary source of income when applying to refinance an existing residence.
Highlights of the Airbnb income program
The eligibility guidelines for the Fannie Mae program are relatively straightforward, including the following:
- Refinancing a primary residence
- A rental history with Airbnb of at least 12 months
- Rental income must be documented by Airbnb
Borrowers with at least a 12-month history with Airbnb may use up to 75 percent of the rental income to qualify for financing. If a borrower has a long-term history with Airbnb, lenders will average 24 months of income as reflected on an income statement from Airbnb.
A benefit of the program is borrowers can save money with lower interest rates. Even though a borrower is using rental income to qualify for the loan, the property does not lose its status as a primary residence. The loan-to-value ratios and interest rates for loans to refinance a primary residence are more favorable than on homes classified as investment properties.
MortgageDepot offers borrowers financing options
Borrowers concerned about qualifying for the Airbnb loan program through Fannie Mae or other types of financing should speak to one of our mortgage consultants at MortgageDepot. For example, the Fannie Mae program requires documentation to prove a history of hosting on Airbnb. Renting all or part of a home through other methods might not offer the documentation needed to meet underwriting guidelines, but it could make a borrower eligible under other loan programs backed by Fannie Mae.
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The mortgage professionals at MortgageDepot put our experience in the mortgage industry to work finding the right loan program to meet the needs of each borrower. Contact us today at (800) 220-LOAN to find out more about our services.
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