Is Airbnb earning considered stable income in loan application?

[Andy22]

Hi all,

I am planning for my first Airbnb unit addition to my primary residence. My target is to buy a condo with 20% ~ 25% down. My loan agent told me that they don't consider Airbnb investment as stable income. They consider long term rental as stable income.

Because of this, if I want to buy the 2nd or more Airbnb unit in the future, it will be harder to get the loan with 20%~25% down.

Does anyone have experience in using Airbnb as stable income during loan application? In my opinion, if I can prove my Airbnb is doing great and making enough and stable money, it should be qualified for stable income.

Appreciate your sharing.

Thanks

Andy

[Cody-And-Nara0]

I don't think the bank would ever consider airbnb as a stable income as it is not longterm stays, I am afraid. I am sorry! but good luck it is certainly a fantastic idea!

[Maria-Lurdes0]

@Andy22  Not only is not considered stable income, even if it was, you'd be buying a second place which is now an investment property and you need 40% down.

We learned about the income part the hard way.  It's taken us three years of tax returns before any bank considered the income "stable".  They just don't get it.    

We just closed on our third property and it was a major hassle to get a mortgage.  None of the big banks would touch it and we finally ended up with a small bank where the mortgage application is reviewed by a group of humans on a local level, not by an algorithm on a corporate level.

I suggest considering to move your airbnb income flow to a small bank, establish a relationship with them, be prepared to show tax returns for at least two years.

Good luck!

[Andy22]

Hello Maria, Cody and Ana,

Thank you for your sharings and comments.

Especially for Maria, your information is very helpful. I think I know what to do now.

Best Regards,

Andy

[Alex111]

Andy, what was your solution?

[Sharat1]

Airbnb through a company and company pays us fixed rent each month. I think that would be valued by bank as long term income. 

[Christina-Ante0]

Would you mind sharing the smaller Bank you used?

We're having a similar issue, banks won't consider our 2 air bnb properties as stable income although we have 2 years reported on our tax return and a consistent rental rate (we only rent monthly minimum).  We are now trying to purchase our third property that would be our homestead. Banks are confident they will be able to pre approve based on our income until they see how much of is air bnb then they stall. 

[Adam226]

Which Bank?

[Bill--Tina--Rajah--and-S0]

This is my experience so far. Local credit unions and local banks are the best way to go if you have an established relationship. My credit union views you as a Human being and will work with you on all Levels.  Quicken Loans and Wells Fargo will not.  The credit union immediately considered the income, based on a long term rental, and since there was no signed lease they used 75% of the potential income.  That being said they still had the same standard for investment properties and required 20% down, but the interest rate (4.2%) was only slightly higher than a personal mortgage at the time was 3.75%.

It was frustrating process when first trying because I first tried Quicken and Wells Fargo, thinking they were a larger entity and it would be a quick and easy process.  I was so wrong.  Good luck on your investments and just have patience. God Bless.

[Marj2]

Thanks, everyone. I know time has passed and I'm hoping things are better. Supposedly, Quicken, Better Mortgage and Citizens will supposedly accept our AirBnB income. Though I'm told only for refi, not a HELOC. Ugh. We'll see...I'm trying again after a debaucle w/BOA last year.  At least they'll do refi's now. Let me know if you guys have any new ideas. Meanwhile, I'll try local banks. 

[Jason1526]

So I’ve been reading through all this basically I have a property out of town in the suburbs area and I want to buy another property closer to home ... will the banks approve of the Airbnb rentals as “income rentals”? I would rather do Airbnb then rent the full house out since you can make more money renting out the rooms if anyone knows or has some experience please let me know , thanks