Why doesn’t short term rental income count as income in DTI ratio

[Kyle Seidel]

I want to get a short term vaca rental in Nashville but I just ran into a roadblock. My lender said that they can't qualify short term rental income as income since it's not guaranteed. It seems silly to me that they assume the property will get $0 income in their Debt to Income (DTI) ratio. This pushes my DTI into the 50's- well above their 45% cutoff. Is this just this lender or is that gov regulations?

Does anyone know of any lenders in Nashville who accept short term rental income as income? Even taking 75% of a very conservative number would be helpful to meet their DTI requirement. Additionally, if you know of any ways to get around this somehow I'd be very grateful if you'd let me know, thanks!

[John Oden]

I would recommend that your first concern should be local regulations. 

 Nashville  is very short term rental antagonistic, permits are required and no new permits for non-owner occupied short term rentals  in areas zoned R or RS have been issued since June 2017. 

Multifamily (zoned RM) is permitted by city ordinance, but then you've got the HOA to worry about.

 I realize your question was about financing, not regulation but just wanted to mention.  I’d hate to see somebody go through all the effort to purchase a property and then find out it can’t be used for their intended purpose.