Can I keep my current home as a rental when I buy my next one?

By Justin Lazzaro, NMLS #1229453
Published September 25, 2026. Last reviewed September 25, 2026.

Yes, if you qualify. Under a Fannie Mae rule dated September 2, 2026, a conventional loan can count 75% of your current home's market rent toward that home's monthly payment.

Under this rule, you don't need a tenant or a signed lease first. That can make it easier to qualify for your next home without selling the one you're in.

What changed

Fannie Mae now counts your home's market rent, backed by an appraiser or comparable rentals, instead of a signed lease. A lease isn't accepted at all for a home you're moving out of.

That helps, because most people don't want to line up a tenant before they've found their next home.

How the rent is counted

The lender takes 75% of the home's monthly market rent and subtracts that home's full monthly payment. That payment includes principal, interest, property taxes, homeowners insurance and any HOA dues.

If the rent covers the payment, that home's payment drops out of your debt-to-income ratio, which is the share of your monthly income that goes to debts. Any rent left over can't be added to your income. If the rent falls short, only the shortfall counts as a monthly debt.

For example, say an appraiser estimates your home would rent for $2,400 a month. The lender counts 75% of that, or $1,800, toward that home's payment. If that covers the home's full monthly payment, the payment no longer counts against you.

Where the rent number comes from

The lender can use any one of three sources:

  • An appraisal that includes market rent
  • A comparable rent schedule completed by the appraiser (Fannie Mae Form 1007)
  • At least three comparable rentals from rental listing sites or the MLS

If your current home has two to four units and some are already rented, the lender will also ask for last year's tax return to confirm that rent.

The savings rule for first-time landlords

If you've managed a rental for less than 12 months, the lender needs to see savings equal to six months of your current home's full payment, left over after closing. That's on top of any other savings the lender requires.

When the rule applies

Lenders can use the new rule now, and they can add their own requirements on top of Fannie Mae's. They must use it for applications dated on or after December 1, 2026, so until then some lenders may still follow the older rules.

Who this doesn't cover

This is a Fannie Mae rule for conventional loans. FHA, VA and USDA loans have their own rules for renting out the home you're leaving. Your next home also has to be your primary residence.

Mistakes to avoid

Before you decide to keep your current home, check for these mistakes.

  • Treating "I qualify" as "it pays for itself." The 75% rent figure decides whether you qualify for your next home. It isn't a budget. Plan for months without a tenant, repairs, a property manager if you use one, and landlord insurance.
  • Counting on equity you can't reach. When you keep your current home, its equity stays in that home. Know where the cash for your next purchase will come from before you commit.
  • Keeping your homeowners policy. Talk to your insurance agent before you move out. For a long-term rental, you'll likely need a landlord or rental dwelling policy. The Insurance Information Institute says these generally cost about 25% more than a homeowners policy. A landlord policy won't cover your tenant's belongings.
  • Missing the tax window. The IRS can let you leave out the gain when you sell. To qualify, you generally must have owned the home and lived in it for at least two of the five years before the sale. After about three years as a rental, you no longer meet that test. Depreciation you take while it's a rental is taxed when you sell, even if the rest of the gain is left out. A tax professional can tell you how this applies to you.
  • In Arizona, overlooking the county. According to the Arizona State Board of Equalization, a home that becomes a rental loses the homeowner's rebate, which raises its property tax. State law also requires you to register a rental with the county assessor, and there are penalties if you don't.

Your next step

Thinking about keeping your current home? Request a quote and tell me the address. I'll check whether its market rent covers the payment under this rule, and compare that with selling first or a buy-before-you-sell option.

Not sure what your home is worth? Start with a free home value estimate.

Sources

This article is for general information only. It is not an offer to lend or a commitment to lend. Loan programs and guidelines change, and approval depends on credit, income, assets, property and program eligibility. Not all borrowers qualify. Market information is as of the date shown and comes from the sources credited. Any average rate mentioned is a national survey figure from its named source, not a rate offered by Reasy Financial, LLC or Justin Lazzaro. Justin Lazzaro, NMLS #1229453. Reasy Financial, LLC, NMLS #2446155, AZ BK 2012302. Equal Housing Opportunity.