Fannie Mae has announced a major improvement for mortgage professionals: additional rental property income evaluation is now included in its Income Calculator. This change allows lenders to accurately analyze rental income or loss reported on IRS Form 8825 when reviewing business tax returns. By expanding the tool to incorporate rental property income, Fannie Mae is making the underwriting process faster, more consistent, and aligned with the Selling Guide.

This update is particularly important for self-employed borrowers, business owners, and investors in Florida who rely on rental income to qualify. With the housing market shifting in Jacksonville, St. Johns County, and across the state, accurate evaluation of rental income is critical for both borrowers and lenders.

What the Additional Rental Property Income Evaluation Means

The updated Income Calculator now evaluates rental income or loss from Partnerships and S-Corporations submitted with Form 8825. This eliminates the need for lenders to piece together rental income data from multiple sources.

Key Benefits for Mortgage Professionals

  • Collective evaluation of properties: All properties owned by the business are analyzed together rather than individually.
  • Streamlined depreciation reporting: Form 8825 depreciation (Line 14) is collected as a total rather than property-by-property.
  • Simplified data requirements: No additional borrower or property details are required to support Form 8825 rental income evaluation.
  • Clear treatment of negative income: Negative rental income is now classified as a self-employment loss, not as borrower liability.
  • One-year return flexibility: In cases where the only business income is rental, or the borrower has 5+ years of self-employment history, one year of returns may be permitted.

How This Differs from Schedule E

Schedule E rental income has always been part of traditional income evaluation, but the new approach provides a streamlined path when Form 8825 is used:

  • Schedule E: Requires property-by-property details such as PITIA, taxes, insurance, repairs, and occupancy.
  • Form 8825: Focuses on a collective evaluation of all properties under the business entity, eliminating extra data collection.

For Florida borrowers with multiple rental properties held in partnerships or S-Corps, this difference can shorten processing time and reduce documentation headaches.

Why This Matters for Florida Homebuyers and Investors

The addition of rental property income evaluation strengthens underwriting accuracy while reducing risk for lenders. For borrowers in Northeast Florida—whether purchasing in Jacksonville, St. Augustine, or Fleming Island—this means:

  • More consistent loan approvals for investors with complex business structures.
  • Reduced delays in underwriting, helping you close faster.
  • Greater confidence that rental income will be properly calculated when qualifying for conventional loans.

At North Star Mortgage Network, we guide Florida homebuyers, investors, and self-employed professionals through these updates so you can maximize your financing options.

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