Fannie Mae Testing Airbnb Income Based Mortgage Loans

Fannie Mae is working with three lenders to evaluate the integrity of mortgage refinance loans underwritten with consideration of a primary residence’s Airbnb income. This is the first time Airbnb income has been a factor in refinance applications. Quicken Loans conceived the program.

The project is in the pilot stages right now. “Technology is at the heart of everything we do at Quicken Loans, so it is a natural fit for us to partner with one of Silicon Valley’s most innovative companies,” observed Jay Farner, Quicken Loans CEO. The company announced it will soon include the documents necessary to demonstrate proof of Airbnb income on its Rocket Mortgage app as well. Fannie Mae placed the pilot program under an initiative intended to expand access to mortgage credit in “new, innovative ways.”

In order for Airbnb income to qualify, hosts must download a proof of income statement from their Airbnb account and have filed tax returns reflecting that income. From that point, lenders may evaluate the information using company-specific guidelines. For example, Better Mortgage, one of the three lenders in the pilot program, will use average earnings from the past 24 months or consider 75 percent of the average earnings of the past 12 months if the mortgage applicant has not been hosting on Airbnb for a full two years.

The addition of this income to the underwriting process could make it possible for some borrowers to refinance who might not otherwise be able to do so. It also will enable hosts to make home improvements that could increase the amount of rent they charge on Airbnb or how many guests they can host at one time.