Quicken Loans: Owners Can Use Vrbo Rental Income to Refinance

April 18, 2019

Quicken Loans, one of the nation’s largest mortgage lenders, announced a partnership with vacation rental firm Vrbo that will allow homeowners to use rental income earned through short-term rentals to qualify for a mortgage refinance. Usually, rental income can only be used to qualify for a mortgage when it is earned from a home that is considered an investment property and not a short-term rental.

“Vrbo helps homeowners use one of their biggest assets as a source of income,” says Jay Farner, CEO of Quicken Loans. “Now Quicken Loans can accurately review that income and consider it when calculating the debt-to-income ratio—a major data point considered when qualifying for a mortgage. As our economy continues to evolve, it’s important that our lending calculations continue to evolve along with them.”

Homeowners can use the confirmed, documented rental income to show lenders their full income stream from their short-term rentals. Quicken Loans says that mortgages for primary residences, vacation homes, and investment properties are all eligible to apply.

More than half of Vrbo owners report using their rental income to cover at least 75 percent of their mortgage payment, says Bill Furlong, vice president of HomeAway, Americas.

About a year ago, another short-term rental company, Airbnb, partnered with Fannie Mae for a pilot program with some lenders to allow income from short-term rentals to be used in helping homeowners qualify for a refinance. Quicken Loans, Citizens Bank, and Better Mortgage were all part of that pilot program. Fannie Mae officials said the income could help more borrowers qualify for a refinance because it will increase the income side of their debt-to-income ratio.

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