Mortgage Navigator • Conventional • Rental Income

Subject-property rental income

Buying a property with rent-producing units can help qualification—but the amount usable depends on the transaction and the borrower's landlord history.

Fannie eligible subject properties

Current Fannie policy permits qualifying rental income from 2–4 unit principal residences, 1–4 unit investment properties, and one qualifying ADU on a one-unit primary residence.

Purchase calculation

For eligible purchase transactions, Fannie generally starts with monthly gross rent and applies the familiar 75% factor, then subtracts PITIA to determine adjusted net rental income (ANRI).

Landlord experience changes the outcome

With at least 12 months of rental-property management experience, positive ANRI can generally be added to income. With less than 12 months, positive ANRI may generally only offset the subject PITIA; a negative amount still counts in DTI.

Agency Difference: Freddie has its own Chapter 5306 rental-income framework. Both agencies use a 75% concept in many lease-based scenarios, but eligibility and treatment of positive income must be checked under the selected agency.

Official guide baseline

Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide

Rental-income rules are transaction-, property-, ownership-history- and management-experience-specific. Current guide controls.