Lenders Quicken Loans, Citizens Bank and Better Mortgage are refinancing loans using Airbnb income as part of a pilot project with Fannie Mae.
This marks the first time Airbnb income from a primary residence is considered in the underwriting of loans sold to the agencies, according to Quicken Loans, which conceived of the program with Airbnb.
Borrowers use a downloadable “proof of income” statement Airbnb provides to qualify for loans. Quicken Loans plans to add a link to Airbnb on its Rocket Mortgage platform to accommodate this soon.
“Airbnb and Quicken Loans are firmly aligned to drive innovation in the real estate industry,” Jay Farner, CEO of Quicken Loans, said in a press release.
Before the pilot existed, only rental income on investment properties and second homes could be considered in agency underwriting, according to Quicken.
The underwriting of primary residence income allows borrowers to obtain a lower rate than they would by using rental income on investment properties, Better Mortgage noted in a separate press release.
“Expanding access to home finance for a new generation of homeowners requires the mortgage industry to acknowledge that millennials earn differently than generations past,” Vishal Garg, CEO of Better Mortgage, said in the release.
“At Better, we see more 1099s and less W-2s, we see more restricted stock units supplementing traditional salaries, and we see people earning cash in new sectors that have grown over the past ten years,” he said.
“We’ve been engaging with entities like Fannie Mae to make sure the 21st century balance sheet can be underwritten to expand access to financing options that can save borrowers tens of thousands over the life of their loan. This initiative is a huge step in the right direction and I expect this is just the beginning.”