Seattle Millennials Can Secure a Down Payment by Being Airbnb Hosts

A year-old company called Loftium is helping first-time homebuyers overcome obstacles to saving—like student debt—by providing the down payment. In exchange, buyers agree to pay the money back by renting a private room or basement unit in the house through Airbnb (Image: Creative Commons via Pixabay)

The start-up plans to back down payment for 50 homes across Seattle during the next six months and is considering bringing the concept to Chicago, Nashville, and Washington, D.C. The actual loan is provided by Umpqua Bank, a local lender that helped create a mortgage product with regulatory approval from Fannie Mae’s, and is restricted to a single lender, Umpqua, and a single down payment assistance provider, Loftium.

Homebuyers sign a contract pledging to rent space through Airbnb over a period of one to three years until the down payment is paid back to Loftium. During that time, the homeowners are required to list the rental 357 days out of the year, make sure the space is clean, be pleasant to guests and give them maps to local attractions, and place mints on their pillow.

“There’s obviously a lot of controversy around people buying investor properties and renting the whole thing and taking housing supply out of the market. I think we’re using Airbnb and that technology platform for good and helping first-time homebuyers, primary residents, buy and afford to stay in their home,” Adam Stelle, Loftium’s co-founder and chief operating officer, says in this CityLab.com report.

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