Among a host of updates made by the Federal Home Loan Mortgage Corp. on rental income is the utilization of income from short-term rentals.
McLean, Virginia-based Freddie Mac says the nation’s housing trends
in the rental market are evolving, and it is studying the changes.
The trends include short-term rental income, where a lease is not utilized. So the government-sponsored enterprise has issued guidance on such situations.
In Bulletin 2017-12, Freddie said it will consider short-term rental income.
A statement from
Freddie Mac Corporate Communications Chad Wandler indicated that while the company doesn’t prescribe whether a certain company falls within this description, “Airbnb appears to fit within this example and as such, it would be considered as included.”
In order for such income to be considered,
a two-year history of rental income is needed to be documented on Schedule E of the borrower’s tax return.
“The property must have been used for the purposes of producing rental income for this period of time,” the bulletin stated. “Short-term rental income is typically fluctuating so historical analysis of the associated degree of volatility and/or irregularity is necessary to determine income stability.”
Acceptable properties include two-to-four-unit primary residences, one-to-four-unit investments properties and
subject investment properties.
Although mortgages with settlement dates on or after Feb. 9, 2018, are impacted by the changes, the “seller may implement the changes in their entirety immediately.”
