Decision guide
Keeping Your Old Home as a Rental? Fannie Mae Just Changed How the Rent Counts
From Nov 1, 2026, Fannie Mae lenders can't use a lease to document rent from a home you're leaving — they must use market rent (appraisal, Form 1007, or 3 comps), take 75% of it, and apply it only as an offset to that home's payment. How the math works, with examples.
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Quick Answer
Keeping Your Old Home as a Rental? Fannie Mae Just Changed How the Rent Counts is worth reviewing before you trust a calculator result because the assumptions behind the model usually matter as much as the formula.
Key Takeaways
- Get a market-rent read on your current home from at least 3 comparable rentals before you apply — that number, not your target lease rent, drives the file
- Run 75% of market rent minus your full PITIA: positive = payment offset only; negative = shortfall lands in your DTI
- If you have under 12 months of landlord experience, confirm you hold 6 months of the old home's PITIA in reserves, plus any multi-property reserves
- Ask your lender whether the loan is being underwritten to Fannie Mae or Freddie Mac — the departing-residence documentation differs
- Underwrite the keep-vs-sell decision separately with real expenses (vacancy, maintenance, management, insurance) in the rental ROI calculator
What changed: the lease no longer documents the rent
A "departing residence" is your current primary home that you'll vacate and convert to a rental when you buy a new primary home. Under Fannie Mae's new framework (Announcement SEL-2026-08, new Selling Guide section B3-3.8-05), a lease agreement is not permitted to establish that home's rental income — not even a signed one. Instead, the lender must document monthly market rent one of three ways: a complete appraisal report that includes market rents; a Single-Family Comparable Rent Schedule (Form 1007) for the unit you occupied; or a market-analysis tool (e.g., Zillow, Redfin, MLS data) supported by at least three comparable rentals, preferably in the same market area, subdivision, or project. The lender keeps all of that documentation in the loan file. For a multi-unit departing residence, the market analysis covers only the unit you lived in; rent from the other units is handled under the separate non-subject-property rules.
How the rent enters your qualifying math
The lender starts with the documented market rent and multiplies it by 75% — the other 25% is Fannie Mae's allowance for vacancy and operating expenses. Then the lender subtracts the departing home's full monthly housing payment (principal, interest, taxes, insurance, and association dues — PITIA). If the result is positive, it can only offset that home's payment; it cannot be added to your qualifying income. If the result is negative, the shortfall is added to your monthly debts in the debt-to-income ratio. Example: market rent $2,500 → 75% is $1,875 → minus $1,700 PITIA = +$175, which simply means the $1,700 payment is treated as offset. If PITIA were $2,000 instead, the $125 shortfall would count against you in DTI.
The reserve hurdle most people miss
Projected rent offsetting the old payment is not the whole file. If you have less than 12 months of documented property-management experience, the lender must verify six months of reserves covering the departing residence's PITIA — on top of any reserves required because you own multiple financed properties. Borrowers with at least 12 months of qualifying management experience are exempt from that additional departing-residence reserve requirement, though other reserve rules may still apply. A borrower can pass the rent math and still stall on liquid reserves, so count both before assuming the keep-the-old-home plan works.
Fannie Mae is not Freddie Mac here
Freddie Mac still documents a converted primary residence differently: 75% of the gross rent on a lease when one exists, or appraiser-reported market rent (Form 72/1000) when it doesn't, and its treatment of positive rent can depend on management experience. Freddie's guide does not offer Fannie Mae's new market-analysis-tool pathway for departing residences. So "conventional loan" is not one rule — the GSE behind your new loan changes the documentation, the income treatment, and the reserve math. Confirm which framework your lender is using before you rely on projected rent to qualify.
What this does not change
This is an underwriting documentation rule, not a ban on leasing: you can still sign a lease and operate the home as a rental — the lease simply isn't the evidence Fannie Mae uses to set the qualifying rent figure. Form 1007 also isn't disappearing; it remains required for rental income on a one-unit subject investment property and stays an option for departing residences. And none of this replaces the landlord math: whether keeping the home is a good investment still depends on real rent, expenses, and cash flow after you move — which is what the rental ROI calculator is for.
Sources and fine print
Source: Fannie Mae Announcement SEL-2026-08 (Sept 2, 2026; updated Sept 23, 2026), Selling Guide section B3-3.8-05. Lenders may adopt the new departing-residence rules immediately and must apply them to loans with application dates on or after November 1, 2026. This guide is educational only and is not personalized mortgage or legal advice; lender overlays vary, so confirm the details with your lender.
Checklist Before You Decide
- Get a market-rent read on your current home from at least 3 comparable rentals before you apply — that number, not your target lease rent, drives the file
- Run 75% of market rent minus your full PITIA: positive = payment offset only; negative = shortfall lands in your DTI
- If you have under 12 months of landlord experience, confirm you hold 6 months of the old home's PITIA in reserves, plus any multi-property reserves
- Ask your lender whether the loan is being underwritten to Fannie Mae or Freddie Mac — the departing-residence documentation differs
- Underwrite the keep-vs-sell decision separately with real expenses (vacancy, maintenance, management, insurance) in the rental ROI calculator
- For application dates on/after Nov 1, 2026 this is mandatory; before then, ask whether your lender has adopted it early
FAQ
Do I need a signed lease to count rent from the home I'm leaving?
No — under Fannie Mae's departing-residence rules a lease agreement is not permitted for this at all. The lender documents market rent with an appraisal, Form 1007, or a market analysis backed by at least three comparable rentals.
If the rent more than covers my old mortgage, can the extra count as income?
No. After the 25% vacancy/expense reduction, any positive amount may only offset the departing home's housing payment. It cannot be added to qualifying income; any shortfall is added to your debts for DTI.
When does the new rule take effect?
Fannie Mae announced it Sept 2, 2026 (SEL-2026-08). Lenders may use it immediately and must apply it to loans with application dates on or after November 1, 2026.
Does Freddie Mac allow the same market-analysis documentation?
No. Freddie Mac uses 75% of lease rent when a lease exists, or appraiser-reported market rent (Form 72/1000) when it doesn't, and does not offer the market-analysis-tool pathway for departing residences.
I have no landlord experience. Anything extra?
Yes — with less than 12 months of documented property-management experience, the lender must verify six months of reserves for the departing residence's PITIA, in addition to other applicable reserve requirements.