How To Get An Airbnb Mortgage For Your Rental Property
About The Airbnb Mortgage
In 2008, Airbnb was founded.
Ten years later, government-backed mortgage group Fannie Mae added a mortgage approval clause allowing Airbnb hosts to use their Airbnb rental income as part of a lender’s approval.
A long-term lease for the rental property is not required, and the program works for all residential home types:
- Single-family homes
- 2-unit homes
- 3- and 4-unit homes
- Condos and co-ops
Airbnb hosts get access to a full suite of mortgage loans, too.
Homeowners can choose from among the 30-year fixed-rate mortgage, the 15-year fixed-rate mortgage, the 5-year adjustable-rate mortgage (ARM), and other fixed and adjustable loan terms. Hosts aren’t subject to penalties, additional fees, or a worsening of mortgage rates.
The Airbnb mortgage option is an ordinary loan with extraordinary allowances.
The program’s primary advantage is how it lets Airbnb hosts declare higher levels of annual income, which results in a better mortgage approval.
Airbnb hosts get access to more loan programs, at lower mortgage rates, and with lower fees as compared to homeowners who use other short-term rental platforms such as HomeAway or VRBO.
Airbnb hosts get credit for the rooms they rent out. Typically, HomeAway and VRBO hosts do not.
The Airbnb-assisted mortgage program is available in all 50 states and Washington, D.C., and getting pre-approved takes less than 3 minutes online.
When To Use The Airbnb Mortgage
The Airbnb mortgage is a refinance loan. It can be used by any Airbnb host with a history of earning income from an Airbnb property.
Homeowners can use the Airbnb mortgage to do any of the following:
- Lower the mortgage rate on an Airbnb property
- Change the years remaining on an Airbnb property’s mortgage
- Switch among an ARM and fixed-rate mortgage on an Airbnb property
- Remove home equity from an Airbnb property as cash for any purpose
- Use an Airbnb property’s home equity to pay down debts
When you’re doing a rate-and-term refinance — that is, lowering your mortgage rate or changing the length of your loan — it’s generally good to proceed if you can reduce your monthly payments without incurring much in the way of closing costs.
Many lenders offer zero-closing cost mortgages, and zero-closing cost loans are particularly well-suited to rate-and-term refinances.
For homeowners doing a cash-out refinance, the math works a little differently.
However, it’s still good to limit your closing costs when possible — even if it means accepting a slightly higher interest rate.
The Airbnb mortgage program can be used for existing Conventional, FHA, VA, or USDA mortgages.
Where Can I Get An Airbnb Mortgage?
The Airbnb mortgage is fully-functional as a “pilot program” for Fannie Mae. However, it’s limited in its availability to Airbnb hosts.
Out of the 26,000+ mortgage companies nationwide, only three can fulfill Airbnb home loan orders:
- Better Mortgage
- Quicken Loans
- Citizens Bank
Each of the approved Airbnb lenders offers an online application process, and we reviewed all three. Better Mortgage offers the fastest, cleanest approval experience of the group.