Skip to content

Airbnb Income Can Officially Be Used to Qualify for a Mortgage Refinance


Call it a sign of the times, or perhaps the power of the sharing, or “gig” economy. You can now officially use Airbnb income to qualify for a mortgage refinance with select lenders.

Yes, if you’ve been renting out your home, or a part of your home via the short-term rental company Airbnb, you might be able to use that income to help qualify for a mortgage.

This could be especially helpful now that mortgage rates have shot up from recent lows, giving homeowners that extra little bit of income to ensure their DTI ratio doesn’t exceed the maximum.

What’s more, you’re able to rent out your primary residence and still qualify for a home loan as if it’s owner-occupied.

That too can lead to a lower mortgage rate, as interest rates are higher on second homes and investment properties.

Airbnb Mortgage Pilot Program Backed by Fannie Mae

  • Airbnb has teamed up with Fannie Mae on a new pilot program
  • It involves three large lenders: Quicken Mortgage, Better Mortgage, and Citizens Bank
  • Will make it easier to use Airbnb income to qualify for a home refinance
  • Can use rental income to lower your DTI if you’ve been renting your primary residence for at least 12 months

Initially, three mortgage lenders will take part in the pilot project backed by Fannie Mae, with others likely to join in the future if all goes well.

They include the likes of Quicken Loans, currently the largest home loan lender if you consider the fourth quarter of 2017, Better Mortgage, and Citizens Bank.

For obvious reasons, the program only works for refinance applications because you have to be an existing homeowner to show any sort of Airbnb rental history.

Speaking of history, you need some of it to use the Airbnb rental income to qualify for the refinance.

If you’ve been renting part or all your primary residence for at least 12 months, these mortgage lenders can consider the income for qualification purposes.

As noted, that can be helpful if your income is lacking otherwise, and you need an extra boost to get over that DTI hurdle.

Additionally, and perhaps more importantly, the lender will consider the property your primary residence (assuming you actually reside in it too), as opposed to an investment property.

This is a big plus because mortgages on investment properties come with many more restrictions (such as limited LTV ratios) and significantly higher mortgage rates.

Better Mortgage, one of the initial participants, says it’ll average Airbnb income over the past 24 months, derived from a “Proof of Income” statement from the company.

If you’ve only got 12 months of rental history via the company, they’ll only be able to consider 75% of the income for qualification purposes.

This additional money can be used to qualify for both a rate and term refinance or a cash out refi.

Quicken says the program provides a new opportunity for homeowners who wish to tap their equity, possibly enabling them to improve their properties so they can rent them out for even more on Airbnb.

Why the Airbnb Mortgage Program Should Work

  • The key to success here lies in the documentation of the income over time
  • In order to use the income there needs to be a history of earnings
  • Doing so demonstrates the ability to earn similarly on an ongoing basis
  • If you can prove that you should be able to use Airbnb income to help qualify for the loan

You might be thinking this is crazy? How can someone rent out their primary residence on Airbnb and still call it a primary residence, and on top of that, use the income toward mortgage qualification?

I was skeptical at first too, but it’s fully documented and requires history as a landlord, or sorry, host.

If anyone could just rent out their house once or twice and then say they do that every month and use the proposed income, it would be a throwback to mortgage lending in the early 2000s.

But as stated above, you do need documented history and the lenders will require that Proof of Income form from Airbnb.

Additionally, Airbnb has to be legal where you reside – this isn’t the case in all cities.

There probably is some added risk to it, but you could argue that any source of income is risky if it’s not outright guaranteed, like most jobs we have.

The question is if lenders will charge for this risk, or pass along some of this unknown risk via a slightly higher mortgage rate. That’s unclear, but you won’t really know if you don’t compare rates. Of course, with only three lenders to choose from, you might not have a choice.

If you recall, back in 2016 Airbnb was actually messing up mortgage applications because lenders didn’t know how to treat the income earned from the rentals.

So if nothing else, this should ideally lead to improved underwriting guidance regarding the new trend of renting out everything you own.

Update: Quicken Loans has announced a similar partnership with Vrbo that will allow rental income earned through the platform to be used as qualifying income for a mortgage refinance.

(photo: opengridscheduler)

1 thought on “Airbnb Income Can Officially Be Used to Qualify for a Mortgage Refinance”

  1. March 2022: Despite what’s said here, I have yet to find a lender who will recognize AirBnb income on my primary home for use in qualifying for refinancing. I have hosted over 100 days each year for the past 8 years; my regular income matches my AirBnb income to put me over $100k per year; I have paid taxes on both Schedule C and E as a result. Regardless, every lender and mortgage broker I’ve applied to says federal guidelines do not recognize AirBnb income as legitimate. I would love to hear otherwise!

Leave a Reply

Your email address will not be published. Required fields are marked *