09/04/2026
Fannie Mae issued announcement SEL-2026-08 with new rental income guidelines effective 11-1-26. We are still validating all the changes but the major items are shown below. Note these are not the full guidelines. I have included some links that will provide more information.
Stricter lease validation. https://selling-guide.fanniemae.com/sel/b3-3.8-01/rental-income
• For a newly executed lease—dated within two months of the application—on a property not yet reported on the borrower’s tax return, the lease term must run for at least 6 months.
• Not involve a family member or another interested party.
• Require evidence of payment, normally two months of bank statements showing receipts. Newer leases may instead use the deposited security deposit and first month’s rent.
Market Rent https://selling-guide.fanniemae.com/sel/b3-3.8-02/rental-income-subject-property
• When the lease amount is not reasonably supported by market rent, the lender must obtain additional support and document its analysis or use the lower amount.
New departing-residence rules. https://selling-guide.fanniemae.com/sel/b3-3.8-05/rental-income-non-subject-property-departing-residence
• A borrower converting a current residence to a rental can no longer qualify using a lease agreement.
• Rent must be supported by an appraisal with market rent, OR a comparable rent schedule (Form 1007) OR market-analysis data, including at least three comparable rentals when market tools are used.
• The lender applies the standard 75% factor, and positive income may only offset the departing residence’s PITIA. Negative income is counted as a debt.
• Borrowers with less than 12 months of property-management experience must also have six months of additional PITIA reserves.
New short-term-rental framework. https://selling-guide.fanniemae.com/sel/b3-3.8-03/rental-income-subject-property-short-term-rental
• 1-unit investment property only.
• Not allowed from an ADU.
• Property must be legally permitted to operate as a short term rental including compliance with local registration and licensing requirements
• Purchases require a comparable rent schedule (Form 1007) Or validated rental data from at least 3 other short term rentals in the same market area with rental rates and number of days rented.
• Refinances require 1040s with schedule 1 and schedule E. If not reported on 1040s yet you also need Form 1007 OR validated rental data from at least 3 other short term rentals in the same market area with rental rates and number of days rented.
• For purchases or refis where the property is not reported on 1040s only 50% of gross rent is used before subtracting PITIA.
• Any positive result may only offset PITIA—it cannot create additional qualifying income.
Special treatment for recently purchased rentals. (within 45 days of the subject-property application) https://selling-guide.fanniemae.com/sel/b3-3.8-06/rental-income-non-subject-property-investment-properties-purchased-within-45-days-subject-property
• A lease cannot be used.
• Rent must be supported by an appraisal, Form 1007, or—in certain multi-unit cases—market-analysis data using at least three comparables.
• The lender uses 75% of gross rent, less PITIA.
• Positive income may only offset PITIA; a loss must be included in DTI.
Guide restructuring. Rental-income guidance was divided into six scenario-based topics:
• general rules
• subject property
• short-term rental
• non-subject property
• departing residence
• property purchased within 45 days
B3-3.8-06, Rental Income from Non-Subject Property: Investment Properties Purchased within 45 Days of the Subject Property (09/02/2026) This topic contains requirements for documentation and qualifying rental income for investment properties purchased within 45 days of the subject property applicati...
