Here’s a strange one – a new company by the name of Loftium is offering down payment money and “monthly mortgage assistance” if you agree to Airbnb one your new home’s extra bedrooms.
The details are pretty scant, and hat tip Rob Chrisman for sharing this tidbit, but it appears Loftium is looking for more short-term inventory to rent out via Airbnb in exchange for some upfront mortgage help.
Up to $20k Toward Your Mortgage Down Payment
As noted, there’s barely anything about this company on the internet, including on their own webpage, which is surprising because even the most obscure companies will have some sort of footprint.
All I could find was info on two co-founders, Adam Stelle and Yifan Zhang, both with backgrounds in tech startups, including an app called Pact that pays you to be healthy, paid by members who aren’t.
And a Seattle-based phone number, which could be where the company will be headquartered. It would make sense given the housing boom up there, and the lack of available supply.
It seems Loftium will pay up to $20,000 toward your new home’s (or condo?) down payment if you agree to list your spare bedroom(s) on Airbnb for 12 to 36 months.
I suppose it’s like buying a multi-unit property where you live in one unit and rent out the other unit(s), except you’re letting a third-party company run the show with another third-party company. Confused yet?
You could potentially have hundreds of guests throughout the year, as opposed to just one tenant who lives in your unit the entire time. It’s also unclear if your bedrooms would actually be occupied all the time, or if that would depend on if anyone actually wanted to rent it on Airbnb. So a lot of uncertainty here.
My assumption is that properties in the heart of metropolitan areas will be able to fetch larger down payment funds and mortgage assistance from Loftium.
As for that assistance, it’s unclear how much the company will provide to the homeowner, but again, it may depend on the area and the attributes of the property. It’ll probably be some percentage of the Airbnb rent.
Is This a Good Way to Qualify for More Mortgage?
Assuming banks and lenders are cool with this company providing down payment assistance and you renting out one or more rooms, you could potentially buy more house, though you would still likely need to qualify for the entire housing payment on your own without this supplemental “income” from Loftium because it’s short-term.
At the same time, many folks can afford higher monthly payments, but often don’t have the down payment funds necessary to qualify for a more expensive home purchase…so this could fill a need.
But there’s also the matter of risk – will lenders treat these properties that are explicitly being turned into partial short-term rentals, at least initially, the same as other owner-occupied properties?
This is one of the complexities of the new Sharing Economy, of which there isn’t much data to go on. Would a home with such an agreement be a greater mortgage default risk, or a lower one?
This isn’t the first time Airbnb and mortgage lenders have crossed paths – last summer, it was reported that homeowners renting out rooms via the service were facing more scrutiny when attempting to refinance thanks to confusing occupancy issues.
And in 2015, Realtor.com and Airbnb collaborated on an “Airbnb before buying” campaign that lets prospective home buyers book accommodations in neighborhoods where they’re thinking of purchasing a home.
This latest concept strikes me as a little odd, having someone move into your new home shortly after you’ve just moved in…hmm.