Updated October 14, 2026: Fannie Mae issued significant updates to its rental-income guidelines on September 2, 2026, and revised the required implementation date in its September 23 announcement. Lenders may implement the changes immediately and must apply them to loan applications dated on or after December 1, 2026.
The update addresses several situations that frequently affect real-estate investors and homeowners who plan to convert their current home into a rental property.
Buying a new primary home while renting out your current property? Your existing mortgage payment, supported market rent, and available reserves can affect qualification. For a personalized review in Maryland, Washington, DC, or Virginia, contact the Chris Jordan Mortgage Team before you commit to a new purchase.
Quick Answers About the 2026 Rental Income Changes
When do the new Fannie Mae rental-income rules take effect?
Lenders may implement the changes immediately. They must apply them to loan applications dated on or after December 1, 2026.
Can a lease establish rental income from a departing residence?
No. Under the new guidelines, the lender must support the projected rent with acceptable market-rent data rather than a lease agreement.
How is long-term projected rental income calculated?
The lender generally uses 75% of the supported monthly market rent before subtracting the property’s complete PITIA payment.
How is projected short-term rental income calculated?
When qualified short-term market-rent data is used, the lender generally uses 50% of the supported gross rental amount before subtracting PITIA.
New Rules for Departing Residences
A departing residence is a borrower’s current primary home that will become an investment property after the borrower purchases a new primary residence.
Under the new guidelines, the lender cannot use a lease agreement to establish rental income from the departing residence. Acceptable documentation may include an appraisal with market rents, Form 1007 or qualifying market-analysis tools such as MLS, Zillow or Redfin. When using market-analysis tools, the lender must obtain at least three comparable rental properties. Those comparable properties should be from the same market area when possible.
The lender then uses 75% of the supported monthly market rent and subtracts the property’s complete PITIA payment. Positive income can only offset that property’s payment. The lender includes any resulting loss in the borrower’s debt-to-income ratio.
Under the updated policy, when the borrower has less than 12 months of property-management experience, the lender must verify six months of reserves for the departing residence’s PITIA. This is in addition to any applicable reserve requirements for multiple financed properties.
Short-Term Rental Income
Fannie Mae also created specific guidelines for short-term rental properties. The property must be a one-unit investment property, and its use as a short-term rental must comply with applicable local registration and licensing requirements. The lender cannot treat income from an accessory dwelling unit as short-term rental income under this section.
For a purchase, the lender may use a standard long-term rent schedule or properly validated short-term rental data. Short-term data generally requires three comparable properties and information about rental rates and the number of days rented.
When using short-term market rents, the lender applies only 50% of the supported gross rental amount before subtracting PITIA. The remaining 50% accounts for vacancy and maintenance expenses.
Recently Purchased Investment Properties
The new guidance also addresses an investment property purchased within 45 days of the application date for another mortgage. The lender cannot use a lease agreement to establish rent for that recently purchased investment property. Instead, the lender must use acceptable market-rent documentation.
After applying the 75% rental factor and subtracting PITIA, the lender may use positive income to offset the property’s payment. However, the lender must include a rental loss in the borrower’s debt-to-income ratio.
Stronger Lease Requirements
Fannie Mae also strengthened its general standards for lease agreements. The updated standards address minimum lease terms and leases that differ from market rent. They also cover evidence that a new lease has taken effect and restrictions involving family members or other interested parties. In addition, the first lease payment must begin no later than the first payment on the new mortgage transaction.
Keeping your current home when you move? Our guide to renting out your current home and buying another walks through the payment calculation, reserves and planning questions for homeowners in Maryland, DC and Virginia.
What This Means for Borrowers
Rental income can still help a borrower qualify. However, property type, transaction timing, rental history and available documentation now have an even greater impact on how much income the lender can use.
If you are planning to convert your current home into a rental, purchase a short-term rental, buy multiple investment properties, use projected rent to qualify, or refinance an existing rental property, it is wise to review the guidelines before entering into a contract.
Considering LLC ownership for a rental property? Read our guide to buying or transferring a mortgaged property into an LLC, and discuss the ownership structure with your loan officer before selecting financing.
Can Rental Income Help You Buy Your Next Home?
If you are buying in Maryland, Washington, DC or Virginia, contact Chris Jordan for a review of your financing goals. We can discuss how your current mortgage payment, estimated rent, rental history and available reserves may affect your next purchase, along with the documentation your scenario may require.
Not ready to complete a mortgage application? Send a no-obligation inquiry and tell us whether you plan to rent out your current home or buy an investment property. Please leave Social Security numbers, account numbers and financial documents out of the inquiry form.
Call (240) 670-5090, email CJMT@mainstreethl.com, or begin your prequalification online.
This article is a general overview and does not replace Fannie Mae’s complete underwriting requirements. Loan eligibility is subject to current guidelines, documentation and underwriting approval.
Sources: Fannie Mae Selling Guide Announcement SEL-2026-08, departing-residence requirements, and short-term rental requirements.
