diff --git a/app/models/concerns/host_params.rb b/app/models/concerns/host_params.rb
index 3df2d5c7391..dfb6ee35b59 100644
--- a/app/models/concerns/host_params.rb
+++ b/app/models/concerns/host_params.rb
@@ -21,7 +21,11 @@ def inherited_params_hash
     end
 
     def non_inherited_params_hash
-      params_to_hash(host_parameters.authorized(:view_params))
+      items = host_parameters.authorized(:view_params).to_a
+      # Add transient host parameters to the array
+      # :authorized removes records that are not saved in the db
+      items += host_parameters.reject(&:persisted?) if User.current.can?(:view_params)
+      params_to_hash(items.uniq(&:name))
     end
 
     def params_to_hash(params)
diff --git a/app/models/concerns/hostext/operating_system.rb b/app/models/concerns/hostext/operating_system.rb
index b50b60b0d88..af3b6ca7253 100644
--- a/app/models/concerns/hostext/operating_system.rb
+++ b/app/models/concerns/hostext/operating_system.rb
@@ -37,10 +37,14 @@ def template_kinds(provisioning = nil)
       images = cr.try(:images)
 
       return [TemplateKind.friendly.find('finish')] if images.blank?
-      return [] if compute_attributes_empty?
 
-      uuid       = compute_attributes[cr.image_param_name]
-      image_kind = images.find_by_uuid(uuid).try(:user_data) ? 'user_data' : 'finish'
+      if compute_attributes_empty?
+        return [] unless image
+        image_kind = image.try(:user_data) ? 'user_data' : 'finish'
+      else
+        uuid       = compute_attributes[cr.image_param_name]
+        image_kind = images.find_by_uuid(uuid).try(:user_data) ? 'user_data' : 'finish'
+      end
 
       [TemplateKind.friendly.find(image_kind)]
     end
diff --git a/test/controllers/hosts_controller_test.rb b/test/controllers/hosts_controller_test.rb
index 139e4c01c69..2c5b91c0dd6 100644
--- a/test/controllers/hosts_controller_test.rb
+++ b/test/controllers/hosts_controller_test.rb
@@ -1128,13 +1128,14 @@ class Host::Valid < Host::Managed; end
   describe '#template_used' do
     setup do
       @host.setBuild
-      ActiveRecord::Base.any_instance.expects(:destroy).never
-      ActiveRecord::Base.any_instance.expects(:save).never
       @attrs = host_attributes(@host)
       @attrs['hostgroup_id'] = hostgroups(:common).id
     end
 
     test 'returns templates with interfaces' do
+      ActiveRecord::Base.any_instance.expects(:destroy).never
+      ActiveRecord::Base.any_instance.expects(:save).never
+
       nic = FactoryBot.build(:nic_managed, :host => @host)
       @attrs[:interfaces_attributes] = nic.attributes.except 'updated_at', 'created_at', 'attrs'
       put :template_used, params: {:provisioning => 'build', :host => @attrs, :id => @host.id }, session: set_session_user, xhr: true
@@ -1142,14 +1143,37 @@ class Host::Valid < Host::Managed; end
       assert_template :partial => '_provisioning'
     end
 
-    test 'returns templates with host parameters' do
-      @attrs[:host_parameters_attributes] = {'0' => {:name => 'foo', :value => 'bar'}}
-      put :template_used, params: {:provisioning => 'build', :host => @attrs }, session: set_session_user
+    test 'render templates with host parameters' do
+      template_kind = TemplateKind.find_by_name('provision')
+      template_with_error = FactoryBot.create :provisioning_template,
+        name: 'fail_without_hp_parameter',
+        template: "<% raise 'BOOOM' if host_param('transient-hp', '').empty? -%>",
+        template_kind: template_kind
+      os = FactoryBot.create(:operatingsystem, :with_archs, :with_os_defaults, provisioning_templates: [template_with_error])
+      host = FactoryBot.create(:host, :managed, operatingsystem: os)
+      attrs = host_attributes(host)
+
+      ActiveRecord::Base.any_instance.expects(:destroy).never
+      ActiveRecord::Base.any_instance.expects(:save).never
+
+      put :template_used, params: {:provisioning => 'build', :host => attrs }, session: set_session_user
+      assert_response :success
+      assert_template :partial => '_provisioning'
+      assert response.body.include? 'Templates rendered with errors'
+      assert response.body.include? 'BOOOM'
+
+      attrs[:host_parameters_attributes] = {'0' => {:name => 'transient-hp', :value => 'i-am-not-saved-in-db'}}
+      put :template_used, params: {:provisioning => 'build', :host => attrs }, session: set_session_user
       assert_response :success
       assert_template :partial => '_provisioning'
+      refute response.body.include? 'Templates rendered with errors'
+      refute response.body.include? 'BOOOM'
     end
 
     test 'shows templates for image provisioning' do
+      ActiveRecord::Base.any_instance.expects(:destroy).never
+      ActiveRecord::Base.any_instance.expects(:save).never
+
       image = compute_resources(:one).images.first
       @attrs[:compute_resource_id] = compute_resources(:one).id
       @attrs[:operatingsystem_id] = image.operatingsystem.id
diff --git a/test/controllers/userdata_controller_test.rb b/test/controllers/userdata_controller_test.rb
index 8fd6c950912..a544ff61a51 100644
--- a/test/controllers/userdata_controller_test.rb
+++ b/test/controllers/userdata_controller_test.rb
@@ -6,7 +6,9 @@ class UserdataControllerTest < ActionController::TestCase
     let(:tax_location) { FactoryBot.create(:location) }
     let(:user_data_content) { 'template content user_data' }
     let(:cloud_init_content) { 'template content cloud-init' }
-    let(:user_data_template_kind) { FactoryBot.create(:template_kind, name: 'user_data') }
+    let(:user_data_template_kind) do
+      TemplateKind.where(name: 'user_data').first || FactoryBot.create(:template_kind, name: 'user_data')
+    end
     let(:cloud_init_template_kind) { FactoryBot.create(:template_kind, name: 'cloud-init') }
     let(:user_data_template) do
       FactoryBot.create(
diff --git a/test/fixtures/template_kinds.yml b/test/fixtures/template_kinds.yml
index 82da1981aa9..5f3bdc7e36e 100644
--- a/test/fixtures/template_kinds.yml
+++ b/test/fixtures/template_kinds.yml
@@ -38,3 +38,7 @@ registration:
 public:
   name: public
   description: description for public template
+
+user_data:
+  name: user_data
+  description: description for user_data template
diff --git a/test/models/concerns/host_params_test.rb b/test/models/concerns/host_params_test.rb
new file mode 100644
index 00000000000..4d1e452b34d
--- /dev/null
+++ b/test/models/concerns/host_params_test.rb
@@ -0,0 +1,48 @@
+require 'test_helper'
+
+class HostParamsTest < ActiveSupport::TestCase
+  test 'shows global params' do
+    host = FactoryBot.build_stubbed(:host)
+
+    FactoryBot.create(:common_parameter, :name => 'test_param1', :value => 'test_value1')
+
+    assert_equal 'test_value1', host.host_params['test_param1']
+  end
+
+  test 'renders global params if template specified' do
+    host = FactoryBot.build_stubbed(:host)
+    # rubocop:disable Lint/InterpolationCheck
+    FactoryBot.create(:common_parameter, :name => 'test_param1', :value => '<%= "test_value1-#{@host.name}" %>')
+    # rubocop:enable Lint/InterpolationCheck
+
+    assert_equal "test_value1-#{host.name}", host.host_params['test_param1']
+  end
+
+  test 'transient host parameters in host_params' do
+    host = FactoryBot.build(:host)
+    hp = FactoryBot.build(:host_parameter, name: 'transient-hp', value: 'i-am-not-saved-in-db')
+    host.host_parameters << hp
+
+    assert host.host_params.key? hp.name
+    assert_equal hp.value, host.host_params[hp.name]
+
+    assert host.host_params_hash.key? hp.name
+    assert_equal hp.value, host.host_params_hash.dig(hp.name, :value)
+  end
+
+  test 'transient host params without :view_params permission' do
+    user_role = FactoryBot.create(:user_user_role)
+
+    as_user user_role.owner do
+      host = FactoryBot.build(:host)
+      hp = FactoryBot.build(:host_parameter, name: 'transient-hp', value: 'i-am-not-saved-in-db')
+      host.host_parameters << hp
+
+      refute host.host_params.key? hp.name
+      assert host.host_params.key? parameters(:common).name
+
+      refute host.host_params_hash.key? hp.name
+      assert host.host_params_hash.key? parameters(:common).name
+    end
+  end
+end
diff --git a/test/models/concerns/hostext/operating_system_test.rb b/test/models/concerns/hostext/operating_system_test.rb
index f1bfe0029e4..94da6b47b3b 100644
--- a/test/models/concerns/hostext/operating_system_test.rb
+++ b/test/models/concerns/hostext/operating_system_test.rb
@@ -47,6 +47,37 @@ class OperatingSystemTest < ActiveSupport::TestCase
         assert_equal [os_dt.provisioning_template], host.available_template_kinds('image')
       end
 
+      test "template_kinds returns user data kind for host without compute attributes" do
+        Foreman::Model::EC2.any_instance.stubs(:image_exists?).returns(true)
+        os_dt = FactoryBot.create(:os_default_template,
+          :template_kind => TemplateKind.friendly.find('finish'))
+        host  = FactoryBot.create(:host, :on_compute_resource,
+          :operatingsystem => os_dt.operatingsystem)
+        host.image = FactoryBot.create(
+          :image,
+          :uuid => 'abcde',
+          :compute_resource => host.compute_resource,
+          :user_data => true)
+        actual = host.template_kinds('image')
+        assert_equal [TemplateKind.friendly.find('user_data')], actual
+      end
+
+      test "template_kinds returns user data kind for host with compute attributes" do
+        Foreman::Model::EC2.any_instance.stubs(:image_exists?).returns(true)
+        os_dt = FactoryBot.create(:os_default_template,
+          :template_kind => TemplateKind.friendly.find('finish'))
+        host  = FactoryBot.create(:host, :on_compute_resource,
+          :operatingsystem => os_dt.operatingsystem)
+        host.image = FactoryBot.create(
+          :image,
+          :uuid => 'abcde',
+          :compute_resource => host.compute_resource,
+          :user_data => true)
+        host.compute_attributes = {:image_id => 'abcde'}
+        actual = host.template_kinds('image')
+        assert_equal [TemplateKind.friendly.find('user_data')], actual
+      end
+
       test "#render_template" do
         provision_template = @host.provisioning_template({:kind => "provision"})
         rendered_template = @host.render_template(template: provision_template)
diff --git a/test/models/host_test.rb b/test/models/host_test.rb
index c72230cd12b..0773034c803 100644
--- a/test/models/host_test.rb
+++ b/test/models/host_test.rb
@@ -3355,24 +3355,6 @@ def to_managed!
     end
   end
 
-  describe 'HostParams module' do
-    test 'shows global params' do
-      host = FactoryBot.build_stubbed(:host)
-      FactoryBot.create(:common_parameter, :name => 'test_param1', :value => 'test_value1')
-
-      assert_equal 'test_value1', host.host_params['test_param1']
-    end
-
-    test 'renders global params if template specified' do
-      host = FactoryBot.build_stubbed(:host)
-      # rubocop:disable Lint/InterpolationCheck
-      FactoryBot.create(:common_parameter, :name => 'test_param1', :value => '<%= "test_value1-#{@host.name}" %>')
-      # rubocop:enable Lint/InterpolationCheck
-
-      assert_equal "test_value1-#{host.name}", host.host_params['test_param1']
-    end
-  end
-
   test "should find smart proxy ids" do
     host_1 = FactoryBot.create(:host, :with_tftp_orchestration)
     host_2 = FactoryBot.create(:host, :with_dns_orchestration)
diff --git a/test/models/orchestration/compute_test.rb b/test/models/orchestration/compute_test.rb
index 6428b944192..7be55dee45a 100644
--- a/test/models/orchestration/compute_test.rb
+++ b/test/models/orchestration/compute_test.rb
@@ -126,6 +126,7 @@ class ComputeOrchestrationTest < ActiveSupport::TestCase
     image = images(:one)
     host = FactoryBot.build_stubbed(:host, :operatingsystem => image.operatingsystem, :image => image,
                              :compute_resource => image.compute_resource)
+    TemplateKind.where(name: "user_data").destroy_all # cleanup from fixtures
     prov_temp = FactoryBot.create(:provisioning_template, :template_kind => TemplateKind.create(:name => "user_data"))
     host.stubs(:provisioning_template).returns(prov_temp)
     attrs = {}
diff --git a/test/unit/orchestration/templates_test.rb b/test/unit/orchestration/templates_test.rb
index 79875bf8f80..082183b3034 100644
--- a/test/unit/orchestration/templates_test.rb
+++ b/test/unit/orchestration/templates_test.rb
@@ -27,4 +27,21 @@ class TemplatesTest < ActiveSupport::TestCase
     assert_equal 1, @queue.count
     refute @host.set_renderability
   end
+
+  test 'with transient host parameter' do
+    template = FactoryBot.build :provisioning_template,
+      name: 'fail_without_hp_parameter',
+      template: "<% raise 'BOOOM' if host_param('transient-hp', '').empty? -%>"
+    @host.stubs(:provisioning_template).returns(template)
+
+    @host.queue_render_checks
+    assert_equal 1, @queue.count
+    refute @host.set_renderability
+
+    @host.clear_host_parameters_cache!
+    @host.host_parameters << FactoryBot.build(:host_parameter, name: 'transient-hp', value: 'i-am-not-saved-in-db')
+    @host.queue_render_checks
+    assert_equal 1, @queue.count
+    assert @host.set_renderability
+  end
 end