Can You Use Rent From Your Current El Paso Home to Qualify for a New Home?

Are you planning to buy a new primary residence while converting your current El Paso home into a rental property? Fannie Mae recently changed how rental income from a departing residence may be used to qualify for a new mortgage. Under the new guidelines, a lease agreement cannot be used to determine the qualifying rent. Instead, the lender must support the market rent through an appraisal, a Comparable Rent Schedule or market data that generally includes at least three comparable rental properties. The lender generally uses 75 percent of the supported market rent and subtracts the departing residence’s full PITIA. If the result is positive, the rental income may only offset that property’s housing expense. It cannot create additional qualifying income. However, Fannie Mae and Freddie Mac do not currently have the same requirements. As of this recording, Freddie Mac may still accept a fully executed lease. The lease amount must generally be supported by: • Form 1000 or Form 72 showing market rent • Evidence of two months of rental income • Or evidence of the security deposit and first month’s rent Freddie Mac generally calculates qualifying rent at 75 percent of the gross monthly rent. The lender then subtracts the departing residence’s full PITIA and any applicable secondary-financing payment. Property-management experience also matters. Under Freddie Mac’s guidelines, borrowers with less than one year of rental-property management experience may generally use the rent only to offset that property’s housing expense. Positive rental income above the housing expense generally requires at least one year of documented property-management experience. In this video, ReAnn Gonzalez explains: • What a departing residence is • Why Fannie Mae will no longer rely on a lease agreement • How Fannie Mae determines market rent • Why lenders generally use 75 percent of the rent • How PITIA and secondary-financing payments affect the calculation • When six months of reserves may be required under Fannie Mae • How Freddie Mac’s guidelines currently differ • Why borrowers should have both programs reviewed before making an offer Fannie Mae announced its changes on September 2, 2026. Lenders may implement them immediately, and they become mandatory for Fannie Mae loan applications dated November 1, 2026 or later. As of the date of this recording, Freddie Mac has not adopted the same departing-residence lease restriction. Individual lenders may have additional requirements. Loan approval depends on the complete loan file, the selected loan program and applicable guidelines. If you are considering keeping your current home as a rental while buying your next primary residence in El Paso or Southern New Mexico, contact me before you make an offer. I can compare the Fannie Mae and Freddie Mac options and review how the rent, mortgage payment and required reserves may affect your qualifications. Before you make an offer, send me the property address. I’ll help you understand the real payment, cash to close, taxes, and loan options before you move forward. ReAnn Gonzalez Senior Loan Officer and Branch Manager Edge Home Finance LLC NMLS 219070 | Edge NMLS 891464 Phone/Text: (915) 478-1157 Email: reann.gonzalez@edgehomefinance.com Website: mortgagemasterep.com Chapters: 00:00 New Rules for Renting Out Your Current Home 00:53 Fannie Mae’s New Departing-Residence Guidelines 02:05 How 75% of Market Rent Is Used 03:20 Fannie Mae vs. Freddie Mac Rules 05:31 Reserve Requirements for Your Current Home 06:10 What to Review Before Buying Your Next Home Information is for educational purposes only and is based on guidelines available as of the recording date. Guidelines and individual lender requirements are subject to change.