Rental Property Investor · Portland, OR · Member since 2017 · 92 posts · 80 votes
I'm working on going through the underwriting process for a mortgage on a new primary residence. One of my existing rentals is an Airbnb/VRBO rental and I was told today that if there isn't a long-term lease in place, the underwriters will completely exclude the income when calculating the debt to income ratio. This is new to me, and I'm wondering if other people have seen this before. The loan is a high balance loan because it is a little over the limit for a conventional loan. Is there any way to push back on this and get them to count it somehow?
It isn't a deal-breaker for my transaction yet, but I'm concerned about it becoming one, potentially.
I'm working on going through the underwriting process for a mortgage on a new primary residence. One of my existing rentals is an Airbnb/VRBO rental and I was told today that if there isn't a long-term lease in place, the underwriters will completely exclude the income when calculating the debt to income ratio. This is new to me, and I'm wondering if other people have seen this before. The loan is a high balance loan because it is a little over the limit for a conventional loan. Is there any way to push back on this and get them to count it somehow?
It isn't a deal-breaker for my transaction yet, but I'm concerned about it becoming one, potentially.
Thanks in advance for any ideas or suggestions.
Fannie Mae does not understand AirBnB. AirBnB hosts should get tight with their loan originator before filing their taxes. Fannie Mae does understand tax returns. Basically you have to translate/transcribe the income source (AirBnB) accurately into what FNMA does understand, and in a way she can understand it. To make things more complicated, tax professionals haven't yet evidently arrived at a consensus for how to show it. Of the 4 or 6 ways I've seen tax professionals report this income, 1 or 2 are Fannie friendly and the rest are not. I'm in the Bay Area where a single AirBnB unit can easily pull six figures, so it can and does make a huge difference. I notched my belt for "ONLY AirBnB income, no other job" about 3 years ago at this point. :) It involved a bit of me asking his tax pro "ok what about this, Fannie Mae would understand it, but does the tax code allow it?" type questions, before the taxpayer/borrower filed their taxes.