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Guild Mortgage, a large U.S. mortgage lender, has become the latest home loan provider to treat short-term rental revenue from Airbnb as income for homeowners seeking to refinance their homes.
“As more people rent part of their home through partners like Airbnb, it’s important that lenders are proactive in recognizing this type of income,” said Erin Watts, Guild’s vice president of product strategy, in a statement.
“We’re looking forward to opening more doors to Airbnb hosts who are interested in refinancing their mortgage. With lower rates driving an increase in refinances, there should be strong interest.”
Guild Mortgage says its a top-1o national lender by purchase mortgage volume. It operates 205 retail branches in 33 states and generates $16.53 billion in loan volume in 2018, according to a press release.
Guild Mortgage joins Quicken Loans, Citizens Bank and Better.com in offering the refinancing option. The program is made possible through a partnership between Airbnb, the four lenders and Fannie Mae. Fannie Mae is a government-sponsored mortgage guarantor. It buys the mortgages originated under the program.
Under the version of the program offered by Guild Mortgage, it can provide loans with up to 97 percent loan-to-value ratios for rate and term refinances, and up to 80 percent loan-to-value ratios for cash-out refinances.
To qualify for the option, borrowers must primarily occupy the home whose mortgage they’re refinancing. Qualifying properties can include up to four units or be located in a planned unit development.
Borrowers must have a minimum credit score of 620 and a debt-to-income ratio of 50 percent or less to be eligible.
In their application, they must provide two years of tax returns documenting their Airbnb income. They also must submit a proof of income statement from Airbnb that shows they’ve received such income for at least two years. If they’ve received Airbnb income for more than a year but less than two, a portion, but not all, of the revenue can be counted as income in their refinance application.
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