WASHINGTON–Homeowners are now using rental income earned through Airbnb to refinance their mortgages.
In conjunction with Fannie Mae, Airbnb is participating in a pilot program that organizers said has quickly taken off. The secondary mortgage giant said the aim is to help more borrowers get better loans in the tight mortgage market.
Airbnb already tracks the income data and will now provide documentation for a mortgage application, noted CNBC in its analysis.
"We want to enable those borrowers to be able to refinance and lower their mortgage costs and tap into their housing equity," said Jonathan Lawless, vice president of customer solutions at Fannie Mae, in a statement to CNBC.
Fannie Mae initially partnered with three lenders––Better Mortgage, Quicken Loans and Citizens Bank––in the program that allows borrowers to use the rental income as part of the income qualification to refinance their home loans. As a result, borrowers are able to either get a better interest rate or to take cash out for other expenses, like renovations or education.
"Some of the nation's largest financial institutions understand that Airbnb is an economic empowerment tool that can generate important income for families, and they are working to recognize this," wrote Nathan Blecharczyk, Airbnb co-founder and chief strategy officer, in a released statement.
The program requires borrowers 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 only as rental properties.