How can I rent my home on airbnb short term, FHA, ADU, been here 5 years

Question

So I currently live right outside of gatlinburg tennessee, and I have a single family home with two adus on, added after purchase of home. I know I'm at the point that I can house hack. But the rooms and possibly the adus and live in the house on my mom's property, because i've been there five years bert, I really wanted short.Term rent on my house as a vacation rental.Because i'm an actual cleaner in the area and have experience with short term. Can I live in the main house and short term rental, the a d u or live in the adu in short term rental the main houseIf I don't want to do midterm or long term how do I get around that with fha? Can I reside in the home and short term the ADU ad it was added on last year. I really want to do short term vesus house hack, long term or mid term because of the tourist area I'm in?

Christa Church · Answer

Ok I just need clarity on the clause in fha that you cannot rent for less than 30 days or use as "transient". So if I go Airbnb route with my FHA loan do I have to rent at least 30 days or more or can I for example rent for 3 nights to one guest and then rent the weekend to a different guest. I just don't want to get in trouble for mortgage fraud. Just really wanted to do nightly rentals in my area, not sure how well 30 days stays will work in or near Gatlinburg tennessee

Tenzapa Wakombe · Answer

You’re in a great spot being near Gatlinburg — smart thinking trying to maximize STR income.

Quick reality check though: FHA rules require you to occupy the property as your primary residence for at least one year. That part is non-negotiable.

• The good news: you can absolutely live in one part (main house or ADU) and short-term rent the other, as long as you’re genuinely living there.
• It doesn't matter if the ADUs were added later — what matters is you actually living there and being able to prove it if asked.

The good news: you can absolutely live in one part (main house or ADU) and short-term rent the other, as long as you’re genuinely living there.

It doesn't matter if the ADUs were added later — what matters is you actually living there and being able to prove it if asked.

If you want to short-term rent the main house and live in an ADU (or vice versa), you're fine — just make sure it’s crystal clear you reside on the property (driver's license, mail, etc.). That keeps you compliant.

Bottom line:

• Yes, you can STR part of the property while living there.
• No, you can't turn the whole thing into a rental and move out right away without risking violating FHA terms.
• You’re smart to lean into STR in Gatlinburg — it’s one of the strongest vacation rental markets in the country if you run it right.

Yes, you can STR part of the property while living there.

No, you can't turn the whole thing into a rental and move out right away without risking violating FHA terms.

You’re smart to lean into STR in Gatlinburg — it’s one of the strongest vacation rental markets in the country if you run it right.

Laura Navaquin · Answer

Hi Christa,

Thanks for reaching out and sharing the details about your property and your plans. It sounds like you’ve got a great opportunity on your hands, especially with your experience in the short-term rental space as a cleaner in the area!

In short, while you can explore short-term rental opportunities, it’s important to align your plans with both FHA guidelines and local regulations.

If you want to dive deeper into the specifics or need help with the logistics of setting up a short-term rental, I'd be happy to share more insights or resources that could help you maximize your investment.

Best regards,
Laura

Rick Albert · Answer

You will have to check with the City and State whether or not you can use the ADUs for a short term rental. In California, they made it clear you CANNOT use ADUs for short term rentals because the intention is to build out affordable housing.

Regarding FHA, as with any owner occupied loan, check with your lender but typically it is all about intention and that you live there for at least one year. After that, you are good to go. Just know that if you have an existing FHA loan on the property, you can't get a second FHA loan. You will have to refinance out of it.

Good luck!

Dan H. · Answer

Even on day 1 the fha loan only required you to live in one of the units.  You could rent the additional units including renting them as an STR.   In addition, after living on the property 5 years, you long ago met the owner occupancy requirement and no longer must live on the property.  So the fha loan at this point does not limit any usage.

Your limitation is what is permitted by your local jurisdiction.   I have zero knowledge of what is permitted in that jurisdiction.

STRs require work and skill to be successful.   If you are a cleaner, you are not afraid of hard work.

Good luck