Fannie Mae Rental Income Guidelines 2026: New Build, Departing Residence & Investment Property Rules
Can you use rental income from a new build to qualify for a Fannie Mae loan? What about your departing residence? Short-term rentals? This guide covers every Fannie Mae (FNMA) rental income scenario for 2026 — including the 75% vacancy factor rule, documentation requirements, and when rental income can and cannot count.
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75%
Vacancy Factor
Applied to ALL rental income
12 mo
History Required
Schedule E or signed lease
2–6 mo
Multi-unit Reserve
PITI reserves required
Lease req.
New Build Rental
+ appraiser market rent
📐 The Fannie Mae 75% Rule — How It Works
Fannie Mae applies a 25% vacancy deduction to all rental income before counting it toward qualification. This is applied regardless of actual occupancy rates — it accounts for potential vacancy periods, repairs, and management costs.
Gross Monthly Rent: $2,400
× 0.75 (vacancy factor): $1,800 counted
Source: Fannie Mae Selling Guide B3-3.1-08
This is calculated on Fannie Mae Form 1038 (Rental Income Worksheet) — your lender completes this. Find a lender experienced with rental income qualifying.
Fannie Mae Rental Income: All 6 Scenarios (2026)
The answer to "can I use rental income?" depends entirely on which type of rental situation you have. Here's every scenario covered by Fannie Mae guidelines:
New Build — No Rental History
❌ Generally NOT allowed
Rule: Must have 12-month rental history documented by tax returns (Schedule E) or signed lease + proof of payment
✅ Exception: If lease exists AND appraiser provides market rent analysis in appraisal
New Build — Lease Signed Before Closing
✅ Allowed (with conditions)
Rule: Signed 12-month lease required + appraiser must confirm market rent + 25% vacancy factor applied
Must provide 1 month bank statement showing deposit received
Departing Residence (Primary → New Primary)
✅ Allowed (up to 75%)
Rule: 75% of gross rent may be used to offset departing residence PITI. Requires signed lease + 1 month deposit proof OR 30% equity in departing home
Cannot use rental income as positive qualifying income — only to offset departing home payment
2-4 Unit Owner-Occupied (Multi-family)
✅ Fully allowed
Rule: 75% of gross rental income from non-owner units counted as qualifying income. Requires 12-month history OR signed lease if property is new
Occupying one unit required. 2-unit: min 15% down, 3-4 unit: min 20% down
Investment Property (Non-owner occupied)
✅ Allowed (12 months required)
Rule: 75% of gross rent from Schedule E. If property was recently acquired, use signed leases + appraiser market rent. Minimum 15% down for SFR investment.
6 months PITI reserves required for each financed investment property
Short-Term Rental (Airbnb / VRBO)
⚠️ Limited allowance
Rule: 12-month history required via IRS Schedule E. Platform income statements (Airbnb 1099-K) do NOT substitute for tax returns. Seasonal properties face additional scrutiny.
Lender overlay restrictions common — many lenders will not allow STR income even if Fannie allows it
Documentation Required for Fannie Mae Rental Income
| Document | When Required | Notes |
|---|---|---|
| Current signed lease agreement | When no rental history exists; required for new builds | 12-month term required; month-to-month NOT accepted |
| IRS Schedule E (2 years) | When rental history exists; primary documentation | 2 most recent years of federal tax returns; all rental properties disclosed |
| 1 month bank statement | To prove deposit received; new builds and departing residence | Shows rent deposit and tenant payment pattern |
| Appraisal market rent analysis | New builds and properties with no rental history | Appraiser must confirm proposed rent is at market rate in Form 1007 or 1025 |
| Property management agreement | Optional but strengthens file for new rental properties | Shows professional management intent; helps with STR scenarios |
| Fannie Mae Form 1038 | For all rental income calculations | Required to document lender calculation methodology |
Rental income not counting? There's another option.
If Fannie Mae rules disqualify your rental income, a DSCR loan qualifies you based on the property's rent ratio — no personal income required.
Fannie Mae Rental Income FAQ 2026
Can I use rental income from a new build to qualify for a Fannie Mae loan?
In most cases, no — not without a signed lease. Fannie Mae (B3-3.1-08) requires documentation of rental income history via 2 years of Schedule E tax returns OR a signed 12-month lease. For a new build with a signed lease, 75% of the gross rent may be used as qualifying income — but only if the appraiser confirms market rent in the appraisal. Without either a lease or tax history, the rental income cannot be used.
How does Fannie Mae calculate rental income?
Fannie Mae uses a 75% vacancy factor rule: regardless of how much rent you actually receive, only 75% counts toward qualifying income. This accounts for vacancies, maintenance, and management costs. Example: $2,000/month rent × 75% = $1,500 counted toward income. The calculation is done on Fannie Mae Form 1038 (Rental Income Worksheet).
Can I use rental income from my departing residence to qualify for a new primary home?
Yes, but only to offset the payment — not as additional positive income. If you're converting your current home to a rental, you may use 75% of the rental income to offset (net out) the PITI payment on the departing residence. To do this you need a signed lease AND proof of deposit (1 month bank statement). Alternatively, if you have 30% or more equity in the departing home, the rental income requirement is waived.
What is the 75% rule for Fannie Mae rental income?
The 75% rule means Fannie Mae multiplies gross rental income by 0.75 to account for vacancy and operating costs. This applies to all rental scenarios — new builds, investment properties, and multi-unit homes. It does NOT mean you need to fill the unit 75% of the time; it's a documentation calculation factor applied regardless of actual occupancy.
Can I use Airbnb / short-term rental income for a Fannie Mae loan?
Fannie Mae allows short-term rental income if you have a 12-month history documented on IRS Schedule E (federal tax returns). Airbnb 1099-K statements alone are NOT sufficient — they must be reflected on your tax returns. Additionally, many lenders impose overlays (stricter rules) that prohibit STR income even when Fannie Mae technically allows it. Ask your lender specifically before counting STR income.
How many months of reserves are required for Fannie Mae investment properties?
For investment properties, Fannie Mae typically requires 6 months of PITI (principal, interest, taxes, insurance) in reserves for each financed investment property. For a primary home purchase using rental income from a separate investment property, you still need 2 months reserves on the new primary home purchase plus 6 months for any financed investment property.
What if the rental income calculation makes me qualify for less?
This is common with high-cost rentals or new builds without history. If Fannie Mae rules disqualify your rental income, explore: (1) FHA loans — FHA has slightly different rental income rules and may be more flexible for multi-unit properties; (2) DSCR loans — for investment properties, DSCR lenders qualify based solely on the property's rent-to-payment ratio, not your personal income; (3) Portfolio lenders — non-QM lenders who can consider alternative documentation.
Related Mortgage Guidelines & Investor Guides
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