Freddie Mac has made changes to the way lenders handle rental income. Mortgage News Daily is reporting that in a recent bulletin from Freddie Mac, changes were made that affects determination in cases of rental income from short-term rentals with no lease in place. The changes were reportedly made to reflect recent changes in rental market resulting from the proliferation in short term rentals.
A loan used to purchase or refinance the subject property, or a non-subject property, which was not owned in the prior calendar year requires considering net rental income only up to a limit of 30 percent of the total of that net rental income plus all other stable monthly income used to qualify the borrower.
The exception would be a borrower who has a documented history of investment property management experience of at least one year. The change, Freddie says, is to “provide support to sustainable and successful homeownership by requiring a reasonable limitation upon the reliance on a newer type of income stream.”
