Nearly half of homeowners (47%) say they would list their home on Airbnb to cover rising mortgage costs, but 40% say their mortgage provider prohibits renting their property or spare rooms on Airbnb.
While you can rent your house on Airbnb even with a mortgage, there’s more to it than just listing your property. It’s important to fully understand how mortgage terms, local laws, and HOA rules impact Airbnb loans.
Let’s break down Airbnb loans and mortgage rules to help you choose the right financing strategy and avoid costly mistakes.
Key takeaways:
- Mortgage rules vary based on lender restrictions, zoning laws, and tax regulations. Non-compliance can result in penalties, fines, or foreclosure.
- Many lenders restrict home sharing, allow it only for second homes and investment properties, or limit the space and duration for short-term rentals.
- A debt-to-income (DTI) ratio below 43% is often required, though some lenders allow up to 50%. Down payments for investment properties are typically 20-25%.
- Lenders typically require borrowers to comply with local regulations for short-term rentals, including licensing, zoning regulations, or limits on the number of rental days.
- Mortgage lenders may require specific insurance coverage for properties used as short-term rentals, including liability coverage to protect against potential claims from guests.
What are Airbnb loans and mortgage rules?
Airbnb loans refer to mortgage options that allow property owners to purchase or refinance homes for short-term rental purposes. Mortgage rules for Airbnb define the financial and legal parameters of financing an Airbnb property or using a mortgaged property for Airbnb rentals. These rules depend on lenders, zoning laws, and tax regulations. Non-compliance can lead to fines or even foreclosure.
Understanding Airbnb loans
The first step to understanding Airbnb mortgage rules is knowing what type of loan is best for investment property financing. Let’s break down the most popular Airbnb loan types and how they work.
| Airbnb Loans | Key feature | Eligibility | Loan limit | Ideal for |
|---|---|---|---|---|
| Conventional loans | High rates; large down payment | 620+ credit score, steady income, DTI < 43% | $806,500-$3,490,300 | Buyers with strong credit seeking long-term financing |
| FHA loans | Low down payment; flexible credit requirements | Primary residence; owner-occupied for 1 year | $524,225-$3,490,300 | First-time buyers or those with limited funds |
| VA loans | No down payment; competitive rates | Primary residence; one unit owner-occupied | $524,225-$3,490,300 | Military service members looking to offset mortgage costs |
| SBA loans | Low rates; long repayment terms | Business registration; 51%-60% owner-occupied | $5 million | Hosts running operations under a formal business structure |
| DSCR loans | Based on property income; high down payments | DSCR > 1.25; 620+ credit score, 20%-25% down | $75,000-$5M | Investors relying on rental income for financing |
| HELOC loans | Borrow as needed; up to 85% of appraised value | Primary residence, 15%-20% equity, 680+ credit score | Based on equity and lender terms | Investors with considerable equity to fund a down payment |
Airbnb mortgage loans
Conventional loans
Conventional loans — the most common path to financing Airbnb properties — are backed by Fannie Mae or Freddie Mac. You can use a conventional loan to either buy an investment property you don’t live in or buy a house as your primary residence while you host Airbnb guests in the home’s extra space (if it’s allowed).
- Best for: Buyers with strong credit scores looking for long-term financing.
- Key features: High interest rates (0.5-1% higher than primary residence loans) and large down payments (20-25%).
- Eligibility: A credit score of 620 or higher, proof of steady income, six months of cash reserves, and a debt-to-income (DTI) ratio below 43%.
- Loan limit: $806,500- $3,490,300.
These loans often have better interest rates, but their strict requirements put them out of reach for many first-time investors. Plus, most lenders limit how many mortgages you can have, which could stall your portfolio growth plans.
FHA loans
Federal Housing Administration (FHA) loans are a government-backed short-term rental mortgage option for primary residences. These loans are designed for owner-occupied properties where one unit can be rented.
- Best for: First-time buyers or those with limited funds.
- Key features: Low down payment (as low as 3.5%) and flexible credit requirements.
- Eligibility: Must be a primary residence occupied by the owner for at least one year.
- Loan limit: $524,225-$3,490,300.
FHA loan limits vary by county and property type. For example, the maximum loan amount for a duplex in Los Angeles County is $1,548,975 in 2025. Read our full guide on FHA loans for investment property financing.
Airbnb loans no down payment
Veteran Affairs (VA) loans are a zero-down mortgage option for active-duty service members, veterans, or eligible surviving spouses. These loans are for primary residences, allowing short-term rentals in some cases, such as buying a multi-unit property to live in one unit while renting out the others.
- Best for: Military service members looking to offset mortgage costs by renting additional units.
- Key features: No down payment and competitive interest rates.
- Eligibility: Must be a primary residence with one unit occupied by the owner.
- Loan limit: $524,225-$3,490,300 (no official cap for veterans with full entitlement).
A down payment may be required if the purchase price is greater than the appraised value or county loan limit. Check out the ultimate guide to VA loans for investment property.
Business loans for Airbnb property
(Small Business Administration) SBA loans are for Airbnb hosts operating as business entities. These are a type of commercial loan for rental property financing that requires a portion of the property to be owner-occupied.
- Best for: Hosts running Airbnb operations under a formal business structure.
- Key features: Low interest rates and long repayment terms (up to 25 years).
- Eligibility: Requires business registration and properties must be 51% owner-occupied (60% for new construction).
- Loan limit: $5 million.
SBA loan options include the 504 and 7(a) programs, which provide funding for purchasing a property, renovations, or operating expenses. Learn more about using SBA loans for rental property.
DSCR loans
Debt Service Coverage Ratio (DSCR) loans focus on the property’s income instead of the borrower’s personal income. Lenders generally look for a DSCR of 1.25 or higher, indicating rental income covers debt obligations by at least 25%.
- Best for: Investors relying on rental income to secure financing.
- Key features: High interest rates (1-2% higher than conventional loans) and large down payments (20-25%).
- Eligibility: A DSCR of 1.25 or higher, credit score above 620, current or projected rental income and expenses.
- Loan limit: $75,000-$5 million.
Lenders often prefer borrowers with short-term rental management experience because it lowers risk and increases the likelihood of loan repayment.
HELOC loan for Airbnb
Home Equity Lines of Credit (HELOCs) provide flexible funds based on your property’s equity. HELOCs allow you to use the value built up in your primary residence to finance an Airbnb property.
- Best for: Investors with home equity to fund a down payment for an Airbnb property.
- Key features: Draw funds during a set period (5-15 years) and only pay interest on the amount used.
- Eligibility: Requires at least 15%-20% equity, a credit score of 680+, and cash reserves (usually 18 months).
- Loan limit: 85% of the property’s appraised value (minus the mortgage balance).
HELOCs are a good option if you plan on leveraging the equity in one rental property for a down payment on another (called the ‘waterfall technique’). Learn more about how to get a loan for rental property.
Understanding Airbnb mortgage rules
Airbnb mortgage rules can significantly impact your investment strategy and overall success. Consider these potential restrictions, requirements, and essential steps to ensure your Airbnb venture aligns with your mortgage terms and local laws.
General Airbnb mortgage rules
Before listing your property on Airbnb, review your mortgage agreement and consult your lender to confirm short-term rentals are allowed. Ignoring these terms can lead to penalties or even foreclosure.
- Lender restrictions: Many residential mortgage agreements prohibit short-term rentals. Some lenders allow occasional or incidental rentals, such as renting out a room in a house that’s your primary residence.
- Primary residence requirement: Owner-occupied loans typically require the property to remain your primary residence. Some lenders allow you to rent out a portion of your home or lease it temporarily while you’re away, as long as you meet the primary residence criteria.
- Commercial use prohibition: Some lenders include clauses that prohibit using residential property for commercial purposes. Listing your property on Airbnb may be considered a commercial activity, potentially violating residential mortgage terms.
- Investment property mortgages: You might need an investment property mortgage if the property is primarily for short-term rentals rather than a conventional mortgage for a primary residence. Check out our investment property mortgage rates guide.
- Refinancing for Airbnb: Mortgage terms restricting Airbnb use may require you to refinance to a mortgage for vacation rental property to legally list the property on Airbnb.
- Seasonal rental allowances: Some agreements allow vacation rentals but often restrict the number of days or seasonality. In Washington, D.C., hosts can rent their properties for a total of 90 days per year, while in Los Angeles, the limit is 120 days for home-sharing.
Loan-specific rules for Airbnb properties
Certain loan types have specific rules landlords must follow to use properties for Airbnb rentals. Understanding these ensures compliance and avoids penalties.
- Conventional loans: These loans may allow Airbnb rentals for a certain period or season or only if the property is considered an investment. Ensure compliance by disclosing your short-term rental plans to the lender and adhering to stricter qualification terms.
- DSCR loans: Lenders often require proof of current or projected rental income, a net operating income (NOI) at least 25% above debt payments, and 3 to 6 months of cash reserves. Some may also impose minimum stay requirements (e.g., 7–30 days per booking) to ensure stable rental income.
- FHA loans: FHA loans mandate that the property must be your primary residence for at least one year. Renting a portion, like a unit in a duplex, is allowed if local laws permit. Violating this rule can result in loan default.
- VA loans: VA loans require borrowers to occupy the property as their primary home. You can rent out a room or an accessory dwelling unit (ADU), but the property must remain primarily your residence.
- SBA loans: Airbnb properties financed under SBA loans must operate as a business entity. At least 51% of mixed-use properties must be owner-occupied, and detailed financial plans are often required.
- HELOC Loans: HELOCs use your house as collateral and have two phases: a draw period (typically 10 years) for borrowing and a 15 to 20-year repayment period for paying the money back with interest. After this, you’ll no longer have access to the line of credit.
Not sure which Airbnb loan is right for you? Baselane will help you find the best rental property loans with competitive rates and flexible terms.
Income and financial considerations
Understanding Airbnb’s financial aspects is key for landlords to maximize income and maintain compliance. Here’s what you should know:
- Airbnb income as qualifying income: Lenders may use Airbnb income when evaluating mortgage applications. For example, Fannie Mae allows borrowers to use 75% of documented short-term rental income if there’s a 12-month history and up to 100% with 24 months of consistent earnings.
- Debt-to-income ratio (DTI): Lenders typically consider a DTI of 43% or lower as favorable. For example, if your total monthly debts are $1,800 and your gross monthly income (including Airbnb income) is $5,000, your DTI would be 36%, making you more likely to qualify for financing.
- Profitability proof: Lenders typically require documentation of rental income for at least the past two years to assess a property’s profitability. This includes tax returns, such as IRS Form 1040 Schedule E, which details rental income and expenses. Consistent and well-documented income over this period strengthens your application for investment loans.
- Down payment requirements: Investment properties typically need higher down payments, ranging from 20% to 25%. For example, purchasing a $300,000 property may require $60,000 to $75,000 upfront.
- Tax implications: Airbnb income is taxable, but deductions like mortgage interest, property taxes, and maintenance costs can reduce your taxable income. Use Baselane’s rental property accounting to automatically track expenses and generate tax packages, simplifying your Airbnb tax management.
Regulatory Airbnb rules
Airbnb hosts must follow specific laws and policies to operate legally. Check regulations for zoning, permits, taxes, and insurance before applying for vacation rental loans.
- Zoning compliance: Check local zoning laws to confirm short-term rentals are allowed. For example, Santa Monica’s law prohibits short-term rentals if a primary resident isn’t on-site through the stay (unless it’s 30 days or longer).
- Permit requirements: Many cities require hosts to register and obtain permits for short-term rentals. Operating without one is illegal and can result in fines. For instance, in January 2019, the New York City Department of Buildings issued 40 violations totaling $374,154 in penalties for illegal transient use of buildings.
- HOA restrictions: Homeowners associations (HOAs) often restrict or ban short-term rentals. HOAs in Missouri can restrict short-term rentals through their governing documents. These restrictions can include limits on the number of rentals allowed, the use of community amenities, and fees for extra services.
- Rent control: States and cities with rent control and stabilization laws can impact rates and dynamic pricing models for monthly stays. In New York City, rent-controlled apartments generally can’t be rented out as short-term rentals (less than 30 days), and rates for rent-stabilized units can’t exceed the legal monthly rent.
- Landlord-tenant laws: When hosting longer stays, landlord-tenant laws may grant guests certain legal rights. In some areas, if guests stay for a specific duration (usually 30 days), they may gain tenant rights, meaning local laws could protect them from removal without proper eviction processes.
- Local tax compliance: Airbnb income must be reported on your tax return. Hosts typically use Schedule C to report income and expenses or Form 1099-K if earnings meet platform thresholds.
- Insurance requirements: Standard homeowner’s insurance often excludes short-term rentals. For example, a typical policy may not cover damages caused by Airbnb guests, making specialized short-term rental insurance essential for liability protection. Learn more about what kind of insurance you need for an Airbnb property.
Airbnb legal and compliance rules
Staying compliant with legal requirements is essential for Airbnb hosts to avoid penalties and maintain operations.
- Occupancy limits: Cities often set limits on how many people can stay in short-term rentals. For example, Miami-Dade County only allows two people per room and 12 guests total.
- Host presence: Some cities have duration rules based on property owner presence during stays. For instance, New York City prohibits rentals under 30 days unless the host is present. In Cape Elizabeth, Maine, separate STR dwellings must be on the same lot as the primary residence and can only be rented out 105 days per year with the owner present.
- Property inspections: Some jurisdictions require an inspection of your property to make sure it meets minimum habitability standards. All short-term rentals in Seattle, Washington (unless they’re commercial property) must be inspected to ensure the meet meet basic safety and housing maintenance requirements.
- Environmental and safety standards: Hosts must follow safety laws, such as installing smoke detectors, fire extinguishers, and emergency exits. Non-compliance can lead to legal consequences. In Los Angeles, hosts who violate safety regulations face fines of up to $1,000 per day or risk losing their Airbnb license for repeat offenses.
Top 5 mistakes hosts make with Airbnb mortgage rules
Avoid these common mistakes to protect your property and maximize Airbnb profits:
1. Failing to notify your lender
Failing to inform your lender about your intention to use your mortgaged property for Airbnb rentals can lead to serious consequences, including breaches of mortgage terms, penalties, or even foreclosure.
Solution: Always consult your lender before signing a mortgage or listing your property to ensure compliance.
2. Ignoring local regulations
Overlooking local laws on permits, taxes, and occupancy limits can result in fines. For instance, in Miami-Dade County, operating a vacation rental without a Certificate of Use can result in fines starting at $100 for the first offense, escalating to $1,000 for a second offense within 24 months, and $2,500 for subsequent offenses within the same period.
Solution: Research and follow local regulations for hassle-free hosting.
3. Skipping insurance adjustments
Skipping insurance adjustments can put your mortgage at risk. Lenders may require short-term rental insurance for investment properties and primary residences used as Airbnbs. Standard homeowner policies often exclude short-term rentals, and Airbnb’s insurance offers limited protection, excluding wear and tear, income loss, and certain guest-related damages.
Solution: Invest in specialized short-term rental insurance to cover damages and liabilities. Baselane’s landlord insurance for short-term rentals also covers loss of use, personal property, medical payments, and loss of income.
4. Poor financial management
Mixing personal and rental income makes it difficult to provide necessary financial documents, such as income statements and expense records, when applying for an Airbnb mortgage or loan.
Solution: Keep separate accounts for rental income to simplify tax reporting and ensure accurate financial tracking. Baselane banking makes this easy with unlimited accounts to organize income, expenses, and security deposits, plus built-in bookkeeping to automatically categorize transactions by property and Schedule E.
5. Neglecting property inspections
While lenders generally don’t require a property inspection, skipping it can result in undetected issues that escalate over time. Additionally, some cities require inspections for short-term rentals to ensure safety and compliance. For instance, in New Braunfels, Texas, short-term rental units must undergo annual life safety inspections.
Solution: Conduct regular property inspections to prevent costly repairs and ensure compliance with local regulations. Even if an inspection isn’t required for your Airbnb loan, proactive maintenance helps protect your investment and keeps your Airbnb profitable.
Get fast & competitive short-term rental loans with Baselane
Hosting on Airbnb is more than just listing a property—it’s about making smart decisions at every step. From choosing the right loan to navigating zoning rules and tax requirements, staying informed helps maximize your rental income while staying compliant.
Financing an Airbnb property starts with finding the right loan. Baselane offers quick and easy short-term rental financing at competitive rates in 48 states. Simply answer a few quick questions, and we’ll match you with the best lender for your investment needs. Get matched with a top lender today!
FAQs
Can you write off the mortgage for Airbnb?
You can’t deduct your entire mortgage payment, but you can deduct the mortgage interest for the portion of your home used for Airbnb rentals. For example, if your annual mortgage interest is $12,000 and 25% of your home is rented on Airbnb, you can deduct $3,000. This deduction reduces your taxable rental income and improves your overall return.
Can I Airbnb my house if I have a mortgage?
Yes, you can rent your mortgaged home on Airbnb, but you must comply with your mortgage terms, local laws, and HOA rules. If your mortgage restricts short-term rentals, refinancing into an investment property loan may be required. Baselane can instantly match you with the right lender and rental property loan for Airbnb with competitive rates.
Can I Airbnb my primary residence mortgage?
Yes, renting a portion of your primary residence is allowed if your lender agrees and local regulations are followed. FHA loans let you rent out units as long as you occupy one unit. Conventional loans may restrict or prohibit short-term rentals. Always check your mortgage terms before listing your home on Airbnb.
Can I Airbnb my VA loan home?
VA loans require the property to remain your primary residence, but you can rent out a room or an accessory dwelling unit (ADU) if you occupy the home. For example, you can live in the main house and rent out a basement suite or guesthouse on Airbnb. This makes VA loans a flexible option for earning additional income.
Can I do Airbnb if I have a mortgage?
Yes, hosting on Airbnb is possible with a mortgage if your terms and local laws permit. Always notify your lender and confirm any restrictions. For example, some mortgages prohibit short-term rentals altogether, while others may require the property to remain your primary residence. Understanding these restrictions is essential to avoid penalties or breaches of your mortgage agreement.
Can I use Airbnb income to qualify for a mortgage?
Yes, many lenders count documented Airbnb income when assessing mortgage eligibility. Consistent rental income strengthens your financial profile, making refinancing or new Airbnb loans easier. With Baselane bookkeeping, you can track and automatically categorize your Airbnb income, generate financial reports, and create tax packages to streamline the process of proving your rental income to lenders.
Can you rent an apartment while having a mortgage?
Yes, you can rent an apartment while paying off a mortgage if you can afford both obligations. To determine if you can afford it, evaluate your income, monthly debts, and the combined costs of the mortgage and rent. Ensure your debt-to-income (DTI) ratio remains manageable—ideally under 43%—to maintain financial stability.
Which mortgage lenders allow Airbnb?
Multiple mortgage lenders allow Airbnb, depending on the loan type and eligibility requirements. Baselane will match you with top lenders across the U.S. Simply answer a few quick questions, and you’ll be matched with the best lender to help you find the right rental property loan for Airbnb at competitive rates.
Can I do Airbnb with an FHA loan?
FHA loans require the property to be owner-occupied for at least one year, but renting a portion is permitted. For example, you can live in one unit of a duplex and list the other unit on Airbnb. This flexibility makes FHA loans a great choice for first-time landlords entering the Airbnb market.
Can you get a business loan for Airbnb?
Yes, SBA loans are a type of business loan for Airbnb. SBA 7(a) loans and SBA 504 loans provide up to $5 million for property purchases, renovations, and operating expenses to help scale short-term rental businesses.
