Being an Airbnb host just got even better: Homeowners can now use rental income earned through Airbnb to refinance their mortgages through a pilot program launched just a few weeks ago – and new loans are already closing.

The home rental company announced it’s partnering with Fannie Mae and three other financial institutions in order to factor home-sharing income when refinancing mortgages.

Though Airbnb’s effects on neighborhoods and real estate markets aren’t perceived as unanimously positive, there’s no arguing Airbnb’s positive impact on hosts’ additional revenue streams.

According to an Airbnb blog post, their goal was to ‘unlock potential savings for hosts and help them reach their financial goals’ by formalizing this revenue stream in the eyes of lenders, lowering their monthly mortgage payments in the process. ‘We’re proud to announce an initiative with Fannie Mae and three lenders to help hosts refinance their mortgages. For the first time, hosts in the U.S. will be able to work with participating lenders to recognize Airbnb home-sharing income from their primary residence as part of their mortgage refinancing application. This could help unlock potential savings for hosts and help them reach their financial goals. The three mortgage lenders in the initiative are Quicken Loans, Citizens Bank, and Better Mortgage.’

Here’s how it works according to Airbnb:

• U.S. hosts can apply to refinance their existing mortgage with Quicken Loans, Citizens Bank, or Better Mortgage. Their existing mortgage does not need to be with any of these providers.
• All U.S. hosts who share their primary residence are invited to apply. Specific eligibility requirements will be determined by each lender.
• When you apply, include your Airbnb Proof of Income with your application. Your Proof of Income allows these lending institutions to consider your Airbnb income when processing your application. You can find your Proof of Income here. Each lending institution may request additional information to see if you qualify. Check with your lender to see what documents you’ll need.

Fannie Mae will guarantee the mortgages as part of the government-sponsored organization’s ‘ … work to find new, innovative ways to expand the availability of affordable mortgage credit’ at a time when definitions of ‘stable work’ have yielded to the whims of a ‘gig economy.’

The genesis of the arrangement was precipitated by complaints of refinancing issues from hosts, prompting conversations about the kind of proof of income hosts would need to make their earnings count – literally – in order to help more borrowers get better loans, better interest rates, and the ability to take cash out for other expenses, like renovations or education.

Borrowers are required to have 12 months history of Airbnb earnings that they can document, and the home must be their primary residence; the program is not for investors using multiple homes exclusively as rental properties.

The arrangement, however, may still add risk to a still-recovering mortgage market.

Since the housing crash due to irresponsible standards in the mortgage industry, lenders have adopted a very strict approach to the amount of debt borrowers can carry compared to their income in order to verify a borrower’s ability to repay a loan. And now, Airbnb income can factor into that calculation, allowing borrowers to qualify for bigger loans.

But for now, at least, it seems like the mortgage industry is cautiously optimistic. The three-lender program will run as a trial period and as things run smoothly, it will be open to backing mortgages from other lenders, too.

If you’re ready to talk about your next move, give one of the experienced professionals at DeLeon Sheffield Company a call today. We’re ready to partner with you, every step of the way, to find you the next house to call home.

Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’