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My mom has a house with a reverse mortgage and she has an in-law apartment attached to her house - separate door to apartment and firewall door between apartment and her house. She has rented the apartment in the past (before Reverse Mortgage) to various people during the summer. She still lives in her part of the house. She is getting older and using Airbnb to rent the separate apartment would be a lot easier. I have seen questions about transient rental of a single unit but could not tell if that 'no Airbnb related to renting a unit where the owner is away temporarily or if it applies to this situation. Thanks.

By Kate on 01.04.2019

Hello Kate,

When HUD established their Financial Assessment guidelines on November 10, 2014, they began allowing “boarder” income on the subject property.  They began to allow borrowers to use income from people renting a room if the income was reported on the borrower’s tax returns and the borrower had a 2-year history of receipt of the income. 

However, HUD has not allowed the use of transient income and they define that as income from individuals for durations of less than 30 days.  This income is not considered boarder income as much as business income, it is deemed the same as running a business from the home (much like a hostel or hotel).  This typically makes the property considered the same as a commercial usage property and one that would not be eligible for HUD mortgage insurance.


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