How to Buy a House Before Selling Yours: Fannie Mae’s New Rental Income Guidelines Drop the Lease Requirement
Published September 4, 2026 · Written by Keith Meredith, Florida mortgage broker · NMLS #303217
As of September 2, 2026, Fannie Mae no longer requires a lease to count rental income on the home you’re leaving. A lease isn’t even accepted anymore. Instead, the appraiser establishes the market rent for your current home, 75% of that rent is applied against your current mortgage payment, and only the difference (if any) counts against you. If you’ve never been a landlord, you’ll need six months of that home’s payment in reserves. VA loans have worked this way for years. Freddie Mac still wants a signed lease and a deposit, so on a conventional loan the file needs to be underwritten to Fannie Mae.
The single hardest part of buying a house before you sell the one you live in has always been the math: two mortgage payments in your debt-to-income ratio. The workaround was to convert the old house into a rental and count the rent, but the rules made that nearly impossible to do on a schedule. You needed a signed lease, usually a deposit in hand, for a house you were still living in. Fannie Mae just removed that obstacle.
What a “Departing Residence” Is
In underwriting language, your departing residence is the primary home you live in today that you’ll be leaving when you close on the new one. If you sell it before or at closing, its payment disappears and there’s nothing to talk about. The problem is everyone who wants, or needs, to buy first: the family that can’t move twice, the buyer who found the right house before listing theirs, the homeowner who would rather keep the old place as a rental than sell it in a soft market. For all of them, the old payment sits in the debt-to-income ratio until it’s either gone or offset by rent.
What Fannie Mae Changed on September 2, 2026
Fannie Mae’s Selling Guide now has a dedicated section for rental income from a departing residence (B3-3.8-05), and the rules in it are different from what most loan officers learned:
- No lease. The guide is blunt about it: lease agreements are not permitted for any departing residence. You don’t need a tenant lined up before closing, and a lease wouldn’t be used even if you had one.
- Market rent from the appraiser. Rent is established by a Single-Family Comparable Rent Schedule (Form 1007) or a full appraisal with market rents on your current home, or by a market analysis tool with at least three comparable rentals from the same area.
- 75% of that rent counts. Gross market rent is multiplied by 75%, then your current home’s full payment (principal, interest, taxes, insurance, HOA) is subtracted.
- It offsets, it doesn’t add. If the result is positive, it wipes out the old payment but doesn’t add income to your file. If it’s negative, only the shortfall counts against your debt-to-income ratio.
- Reserves if you’re new to this. If no borrower has at least 12 months of property management experience, you need six months of the departing home’s full payment in reserves after closing.
The Math, Before and After
Say your current home’s payment is $1,900 a month all-in, and the appraiser says it would rent for $2,400. Here’s what your debt-to-income ratio sees:
| Scenario | What counts against you | What you had to produce |
|---|---|---|
| Old way, no lease | Full $1,900 payment | Nothing, but you had to qualify carrying both payments |
| Old way, with a lease | $100 shortfall ($2,400 × 75% = $1,800, minus $1,900) | A signed 12-month lease and evidence of the deposit, on a house you still lived in |
| New way (Fannie Mae, Sept 2026) | $100 shortfall | The appraiser’s rent schedule. Plus $11,400 in reserves (six months of $1,900) if you’ve never managed a rental |
That $1,800 swing in monthly debt is the difference between qualifying and not qualifying for a lot of move-up buyers. At today’s rates, $1,800 a month of debt-to-income room is roughly $270,000 of purchasing power. Retirement accounts and other assets generally count toward the reserve requirement, so the six-month cushion is usually easier to meet than it sounds.
How the Programs Compare Now
| Program | Rental income on the home you’re leaving |
|---|---|
| Conventional, Fannie Mae | No lease. Appraiser’s market rent, 75% offsets the payment. Six months reserves if you lack 12 months landlord experience. |
| Conventional, Freddie Mac | Still requires a current, fully executed lease plus a security deposit or first month’s rent, or two months of rent receipts. Without a year of landlord experience the rent can only offset the payment. |
| VA | Prospective rent on the home you’re vacating can offset that payment with no lease. VA has allowed this for years; individual lenders sometimes add reserve overlays. |
| FHA | Generally still wants a lease, a deposit, and equity in the departing home before rent can be counted. |
The practical point for a conventional borrower: the same file can be underwritten to either agency, and the lender picks. If your plan depends on the departing residence rule, the loan has to go through Desktop Underwriter to Fannie Mae, not Loan Product Advisor to Freddie Mac. That’s a decision made at application, and it’s the kind of thing a single-lender loan officer with a Freddie Mac preference will get wrong for you. See our Florida conventional loan page for the rest of the program.
Who This Helps in Florida
Three kinds of buyers, mostly. Move-up families in Ocala, Gainesville, and The Villages who found the next house before the current one sold and don’t want a contingent offer. Homeowners sitting on a 3% mortgage who want to keep the old house as a rental rather than give up that rate, which is exactly what our 7-numbers post said more people are doing. And buyers building, where the construction-loan payment and the current payment overlap for months. Our construction loan page covers that case. If you’d rather keep the old house and pull equity for the down payment on the new one, a HELOC or fixed second on the departing home pairs well with this rule.
Want to buy before you sell?
Send me your current payment and your address. I’ll estimate the market rent, run the departing residence math both ways, and tell you whether you qualify with or without selling first.
Keith Meredith · Black Rock Mortgage, a division of Coast 2 Coast Mortgage · NMLS #303217
Keith's take
The old lease rule was a catch-22. To count the rent you needed a tenant with a signed lease, and to get a tenant you needed to move out, which you couldn’t do until you closed on the new house. People solved it by signing leases with friends or relatives that nobody intended to honor, and underwriters knew it. Tying it to the appraiser’s market rent is more honest and more useful. My only caution is the reserve requirement: if you’ve never owned a rental, plan on six months of the old payment sitting in an account after closing. Retirement money counts, so tell me what you have before you assume you’re short.
Departing Residence FAQ
Do I need a tenant before I close on the new house?
Not for a Fannie Mae conventional loan as of September 2, 2026. The rent is established by the appraiser’s rent schedule or a market analysis, not a lease. You can close on the new home and then find a tenant for the old one.
Can the rent from my old house add to my income?
Only up to the old payment. If 75% of the market rent exceeds the departing home’s full payment, the payment is offset but the extra doesn’t count as income. If it falls short, only the shortfall counts against your debt-to-income ratio.
What if I’ve never been a landlord?
You can still use the rule, but you need six months of the departing home’s full payment (principal, interest, taxes, insurance, HOA) in reserves after closing. Borrowers with at least 12 months of property management experience don’t need those reserves.
Does Freddie Mac allow this too?
Not the same way. Freddie Mac still requires a current, fully executed lease plus a security deposit or first month’s rent (or two months of rent receipts) to count rent on a converted primary residence. If you don’t have a tenant yet, the loan needs to be underwritten to Fannie Mae.
How does VA handle the home I’m leaving?
VA allows the prospective rent on the home you’re vacating to offset that mortgage payment without a lease, and has for years. Some lenders add their own reserve requirements, which is one reason we shop VA files across multiple lenders.
What if I already moved out and the old house is empty?
It’s still a departing residence for Fannie Mae purposes as long as it was your primary residence and you’re buying a new one. The same market-rent documentation applies. If it has already been rented and the rent shows on your tax returns, it’s treated as a regular rental property instead.
Sources. Fannie Mae Selling Guide B3-3.8-05, Rental Income from Non-Subject Property: Departing Residence, and Announcement SEL-2026-08, both dated September 2, 2026; Freddie Mac Single-Family Seller/Servicer Guide Section 5306.1, rental income from the conversion of a primary residence to an investment property; VA Lenders Handbook (Pamphlet 26-7), Chapter 4, rental income. The example is arithmetic on illustrative figures, not a quote or a commitment to lend; purchasing-power estimate assumes a 30-year fixed rate near the current Freddie Mac survey average. Eligibility depends on your credit, income, assets, property, and the lender’s own requirements, which may be stricter than the agency guidelines. This article is education, not a loan offer. Black Rock Mortgage, a division of Coast 2 Coast Mortgage · NMLS #303217 · Company NMLS #376205 · Equal Housing Opportunity.
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