Both Fannie Mae and Freddie Mac made CONVENTIONAL RENTAL INCOME CHANGES to their rental income guidelines EFFECTIVE for APPLICATIONS taken after January 1, 2024.

Make sure you know the rules of rental income allowed based on primary housing payment and length of rental management experience.

Here are a couple items that are unique to Fannie and Freddie that you need to know.

FANNIE

If using income from a lease on subject property or other investment property you need ONE of these two options.

1. Appraisal form 1007 that “SUPPORTS” the income shown on lease agreement.
2. The lease must have proof that it is in effect and provide proof of at least two months rental payment. Security deposit and first months rent qualify for the two months requirement.

FREDDIE

• Leases no longer require a one year term. Leases must only be current and fully executed.
• If using a new lease the due date of the first rental payment must be on or before the new mortgage first payment due date.
• On new lease agreements must have proof the two months rent have been deposited into a financial institution or third party account.
• Security deposit and first month’s rent is allowed to verify two months rent received.

By Dave Kaznecki  1/12/2024