Fannie Mae Just Changed the Conversation for Move-Up Buyers Who Want to Keep Their Home
The new Fannie Mae departing residence guidelines may help you buy a new home and keep your current one as a rental. Eligible buyers can use supported market rent to help offset their existing housing payment, without securing a tenant first.
For homeowners who want to move but keep their existing home, that could remove a frustrating timing hurdle.
After all, how do you promise a tenant a move-in date when you haven’t found your next house?
Why keeping your home can make moving complicated
Maybe your family needs more space. Maybe you want a shorter commute. Or maybe your current home would make a good long-term rental.
You’re ready to move, but selling isn’t your first choice.
The challenge is qualifying for the next mortgage while you still own the first home. Rental income may help with that calculation. However, arranging a lease before you know when you’re moving can make the process difficult.
Fannie Mae’s new framework changes that conversation. It puts the focus on what the rental market supports.
What changed in Fannie Mae’s departing residence guidelines?
A departing residence is your current primary home that you plan to vacate and convert into a rental when you buy a new primary residence.
Under the new framework, lenders determine rental income using market evidence. A lease agreement is not permitted as the qualifying documentation for this scenario.
That evidence can include an appraisal with market rents, a comparable rent schedule, or a documented market analysis. When lenders use tools such as MLS, Zillow, or Redfin, they must obtain at least three comparable rentals.
So, an optimistic rent estimate won’t do the job. The numbers need support.
How market rent could offset your current payment
Here’s a hypothetical example for a homeowner buying another home in Utah:
| Payment or calculation | Monthly amount |
|---|---|
| Current home’s full housing payment | $2,100 |
| Supported market rent | $3,200 |
| Rental amount after the 75% calculation | $2,400 |
| Amount above the current housing payment | $300 |
In this example, the supported rent could fully offset the current home’s $2,100 housing payment for mortgage qualification.
However, the extra $300 does not become additional qualifying income under this departing residence framework. If the calculation produces a shortfall instead, that amount counts toward your debt-to-income ratio.
The full housing payment includes principal, interest, property taxes, insurance, and applicable association dues—not just the loan’s principal and interest.
Also, an offset on a mortgage application doesn’t make the payment disappear. You still owe it, including during vacancies.
What are the catches?
You may need six months of reserves
Buyers with less than 12 months of property management experience must have six months of reserves for the departing home’s full housing payment.
With a $2,100 payment, that equals $12,600.
This requirement is in addition to any applicable reserves for multiple financed properties. Your lender must calculate the total for your situation.
Your rental management history matters
The lender must document any qualifying property management experience. Prior rental tax returns and other permitted records may help establish that history.
Hiring a property manager doesn’t automatically establish your own 12-month track record. Have your lender review the documentation before assuming you qualify for different reserve treatment.
Reserves are separate from your down payment
Reserves are eligible assets available after closing. They provide a financial cushion beyond the money you use for your down payment and closing costs.
Depending on the rules, eligible assets may include savings, investments, or vested retirement funds. Your lender will confirm what counts.
This is a Fannie Mae change
Do not assume the same framework applies to Freddie Mac, FHA, or VA financing. Each has its own requirements.
The loan program and lender’s implementation matter. Before planning around a payment offset, confirm which guidelines your new mortgage will follow.
When do the new guidelines take effect?
Fannie Mae announced the update on September 2, 2026, and later revised its implementation deadline.
Lenders may adopt the changes now. They must implement them for loans with application dates on or after December 1, 2026.
If you’re buying before then, ask whether the lender has adopted the new rules.
Does keeping your home make sense for you?
For some Utah homeowners, this change may make moving more practical while preserving a home they want to keep.
Still, qualifying for the mortgage is one part of the decision. You’ll also want to consider repairs, vacancies, insurance, management costs, and how much cash you’ll have left after closing.
The goal is to build a plan you can comfortably manage.
Frequently asked questions
Can I buy another home without selling my current home?
Yes, if you qualify for the new mortgage while retaining the current property. Eligible rental income may help offset its housing payment.
Do I need a tenant before buying my next home?
Under Fannie Mae’s new departing residence framework, qualifying rental income comes from supported market rents rather than a lease. Availability depends on lender adoption and your eligibility.
Can I count all the expected rent as income?
No. The lender applies a 75% calculation, and this framework limits the benefit to offsetting the departing home’s payment.
Let’s look at your options before you decide to sell
If you’ve been thinking, “I want to move, but I don’t want to sell,” let’s run the numbers.
Our Houzd Mortgage team can review your current payment, potential market rent, available assets, and purchase plans. From there, we can help you understand whether keeping your home is a realistic option.
Contact Houzd Mortgage to explore buying your next home while keeping your current one.
Examples are illustrative. Loan approval depends on documented income, assets, credit, property eligibility, and applicable lender and program requirements.
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