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How Will the Gig Economy Shape Mortgage Lending?
Friday, May 18, 2018 6:40 AM

New research from Fannie Mae

The gig economy is growing and reshaping how Americans think about work and self-employment. Our National Housing Survey found that nearly one-fifth of adults in the U.S. have provided a gig economy service, such as transportation, lodging, and food delivery, and many of them want to buy homes. But due to its on-demand nature, the gig economy income stream can be less stable.

In a new study, our Economic and Strategic Research Group surveyed senior mortgage executives to understand their views on using gig economy income in the mortgage underwriting process.

Key findings:

  • 71 percent of lenders said borrowers have applied for a mortgage using gig economy income over the past year.
  • 89 percent expect the number of borrowers who would want to use gig economy income to qualify for a loan to grow in the next few years.
  • 68 percent think accepting gig economy income will help low- to moderate-income consumers access mortgage credit.
  • 95 percent said it's difficult to use gig economy income to approve mortgage applications with today's lending practices.
    • Top barriers include unpredictability and instability of gig economy income, investor requirements, and underwriting criteria standardization.
    • By comparison, 69 percent of lenders say current underwriting guidelines for self-employment income verification are about right, while 24 percent suggest easing existing standards.