Requirements for Short Term Rental Seasoning/ Proof of Income

[Anna Millar]

My fiancé and I have been traveling for the last 6 months and put our house on airbnb. 

We are nearing the end of our travels and want to refinance into a commercial loan.

If we stay at the property for a few weeks and then put it back on airbnb, does anyone know if that will mess up the “seasoning”/ proof of rental income we have so far?

Thank you so much!

[Robin Simon]

Quote from @Anna Millar:

My fiancé and I have been traveling for the last 6 months and put our house on airbnb. 

We are nearing the end of our travels and want to refinance into a commercial loan.

If we stay at the property for a few weeks and then put it back on airbnb, does anyone know if that will mess up the “seasoning”/ proof of rental income we have so far?

Thank you so much!

Hi Anna - for commercial (DSCR) loans, airbnb loans are still pretty new so its going to vary from lender to lender, mostly depending how they qualify airbnb income. Almost uniformly, a lender is not going to take 6 months an annualize it for an STR, and will only do an actual 12-month history for qualification (this is primarily due to the seasonal nature of most markets, so it would be unrealistic to project if it was the "6 month on season" or "off season". The good news is that there are creative private lenders that will qualify based on AirDNA projections and hybrid "common sense" underwriting that can take into account the 6 months history with some mix of market rent, projection, etc.

As for living in the property, it is very important for the loan to be non-owner occupied for STRs (this means you sign docs that say moving forward you will not occupy the property more than 14 days per year).  However, living in the property for a few weeks shouldn't be an issue, but you must have strong documentation that you have a new primary residence or lease signed up by loan close.