How do lenders count Airbnb income?

[Mike D.]

Anyone aware of the ins and outs of how Fannie Mae-backed conventional lenders count income from Airbnbs? Specifically, my question is whether you can acquire a short-term rental, then immediately turn around and use the income from it to qualify to purchase another property. With conventional long-term rentals, if you're an established landlord, lenders will count the income from a new rental property right away, allowing you to use it to qualify to purchase another. Say you purchased a property that makes $500 a month in May 2024, and now it's August 2024 and you want the lender to count that income--they'll count $6k, not just $1500, with no need to see your taxes. Does it work that way for short-term rentals too? Or are the lenders wanting to see a full year of them on your taxes before they'll count the income?

[Jay Hurst]

Quote from @Mike D.:

Anyone aware of the ins and outs of how Fannie Mae-backed conventional lenders count income from Airbnbs? Specifically, my question is whether you can acquire a short-term rental, then immediately turn around and use the income from it to qualify to purchase another property. With conventional long-term rentals, if you're an established landlord, lenders will count the income from a new rental property right away, allowing you to use it to qualify to purchase another. Say you purchased a property that makes $500 a month in May 2024, and now it's August 2024 and you want the lender to count that income--they'll count $6k, not just $1500, with no need to see your taxes. Does it work that way for short-term rentals too? Or are the lenders wanting to see a full year of them on your taxes before they'll count the income?

 @Mike D.  For Fannie/Freddie if the property is not on the tax returns (because of when it was purchased) you use 75% of the long term lease amount. If you renting it short term you do not have that long term lease to show so you cannot use income from that property. BUT, if buying a new investment property you can use 75% of the appraiser determination of the new property.

If on the tax return, you can use short term rental income OR long term income. This form is used to calculate the income: Rental income worksheet