By Nathan Young, founder and president of North Star Mortgage Network, Inc., an independent mortgage brokerage in Jacksonville, Florida. Nathan Young has originated Florida mortgages since April 18, 2000 and is a 2025 NAMB Mortgage Broker of the Year and a 2026 NAMB Influencer of the Year. NMLS #325206 | Company NMLS #356789.

When purchasing a new primary residence while your current home is still on the market, you may be concerned about how the existing mortgage affects your debt-to-income (DTI) ratio. Fortunately, Fannie Mae and Freddie Mac (not government loans) allow an exception for omitting pending sale from the borrower’s financial obligations under certain conditions.

North Star Mortgage Network in Jacksonville, Florida uses the agency omission rules to exclude a departing residence’s mortgage payment from the debt-to-income ratio when the sale is pending and the file is documented to agency standards. Guidelines and individual lender overlays vary, and all loans are subject to credit approval.

How Does Omitting Pending Sale Work?

To exclude the principal, interest, taxes, insurance, and association dues (PITIA) of your current primary residence when qualifying for a new mortgage, one of the following conditions must be met:

1. Executed Sales Contract Without Pending Financing Contingencies

• If you have a fully executed purchase agreement for your current home with proof that all financing contingencies have been cleared, you can omit the PITIA from your obligations.
• If no financing contingencies exist in the contract, simply providing the executed purchase agreement is sufficient.
• Keep in mind, the buyer of your home may need to provide documentation confirming this.

2. Executed Buyout Agreement as Part of an Employee Relocation Plan

• If your employer or a relocation company takes responsibility for the outstanding mortgage, you can exclude the PITIA.
• The buyout agreement must not include financing contingencies or the right to cancel.

3. Freddie Mac’s Exception for Unexecuted Buyout Agreements

Freddie Mac allows borrowers to exclude PITIA using an unexecuted buyout agreement from an employer relocation company if the following conditions are met:

• The borrower has reserves exceeding what Loan Product Advisor (LP) findings require for covering PITIA for the term listed in the buyout agreement.
• The borrower provides a signed letter stating their intent to accept the buyout agreement if the home does not sell before the expiration date of the agreement.

Why Choose North Star Mortgage Network, Inc.?

Navigating the complexities of mortgage financing—especially with an existing home still on the market—requires expert guidance. At North Star Mortgage Network, Inc., we specialize in structuring loans that maximize financial flexibility while ensuring smooth transitions between properties.

What Sets Us Apart?

• Expert Knowledge: With decades of experience, we understand Fannie Mae and Freddie Mac’s guidelines inside and out.
• Personalized Solutions: Every borrower’s situation is unique, and we tailor solutions to fit your financial goals.
• Smooth Process: We help streamline paperwork and ensure that your existing property sale does not hinder your ability to purchase your next home.
• Competitive Rates: We work diligently to secure the best financing options available.

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At North Star Mortgage Network, Inc., we are committed to making your home financing experience as stress-free as possible. If you’re purchasing a new primary residence and want to explore your options for omitting a pending sale, contact us today!

Buying in Nassau County or Orange Park while your current home is still pending sale? We can help structure this correctly. Get a rate quote — no SSN required to get started.

Nathan Young is the founder and president of North Star Mortgage Network, Inc., an independent mortgage brokerage in Jacksonville, FL serving all of Florida since 2000. Call or text direct: 904-880-6741. Office: 904-880-6741. Nathan Young NMLS #325206 | North Star Mortgage Network, Inc. NMLS #356789 | nsmn.com

This article is for general education only and is not legal, tax, or financial advice. Agency guidelines may change, and individual lender overlays can be stricter than agency requirements. Available for qualified borrowers; program guidelines apply. This material has not been reviewed, approved, or issued by HUD, FHA, or any government agency. North Star Mortgage Network, Inc. is not affiliated with or acting on behalf of any government agency. All loans subject to credit approval. North Star Mortgage Network, Inc. | NMLS #356789 | Jacksonville, FL | nsmn.com | 904-880-6741

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