Rental-income changes: December 1
Mandatory for applications dated Dec. 1, 2026 onward; lenders may adopt earlier. The revised notice supersedes the original Nov. 1 date.
THE MORTGAGE KNOWLEDGE DESK
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Practical dos and don’ts for your purchase, refinance or next investment. Find your audience, check the source, and bring better questions to your loan conversation.
Content and sources checked October 14, 2026THE WEEK AHEAD · U.S. ECONOMY
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REALTOR & BUILDER KNOWLEDGE CENTER
Know what changes your deal.
Find a clear answer, understand the business impact, and know what to ask next. A practical mortgage reference for better-informed offers, listings and new-home conversations.
Appraisal reports are changing
The UAD 3.6 mandate uses initial UCDP submission date. Lenders with approved exceptions can continue UAD 2.6 submissions through May 19, 2027. Ask which path applies.
Highest and best use needs an early look
Updated analysis can matter for unusual residential uses and comparable selection. Flag zoning, ADUs and development plans before the appraisal order.
Checked October 14, 2026. Fannie Mae examples apply to that agency’s rules, not every conventional loan. Freddie Mac, FHA, VA, USDA and individual lenders may differ. Use the stated effective date and confirm lender implementation.
21 answers
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Is a rental survey the same as an appraised value?Fannie Mae education
No. An appraisal gives an opinion of property value. A rental survey estimates monthly market rent. Legacy Form 1007 compares rental properties and adjusts for meaningful differences; a 2–4 unit report may contain its own rent analysis.
Business impact: A home can support the purchase price while its rent supports less qualifying income than expected. These are separate financing questions.
Next move: Before ordering, tell the loan team whether rental income is needed and ask which rent analysis the assignment must include. A rent estimate is not a lease or an approval.
Fannie Mae · Form 1007 ↗ · Fannie Mae · B4-1.2-01, appraisal forms and exhibits ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Will the new appraisal report raise or lower a home’s value?UAD 3.6 transition
UAD 3.6 changes the reporting structure to a dynamic URAR. The report format does not prescribe a price increase or decrease. Market evidence and the property analysis still matter.
Business impact: Rent information generally moves inside the new report. If omitted, the original appraiser generally must amend it; limited exceptions exist.
Next move: Ask which format the lender ordered and include rental needs early.
Fannie Mae / Freddie Mac · UAD 3.6 FAQs, updated September 30, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
What if the lease rent is higher than the appraiser’s market rent?Revised rental policy · application dates from Dec. 1; earlier adoption allowed
Under the revised Fannie Mae subject-property rules, an unsupported rent discrepancy requires further support and a written stability analysis, or use of the lower amount. A signed lease does not automatically settle the issue.
Business impact: A rent assumption in an offer may not survive underwriting.
Next move: Provide the executed lease and available support, then have the lender confirm the qualifying rent before promising purchasing power.
Fannie Mae · B3-3.8-02, subject-property rental income ↗ · Fannie Mae · SEL-2026-08, revised September 23, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Why doesn’t the lender count every dollar of rent?Revised rental policy · investment-purchase illustration
In the revised Fannie Mae purchase calculation, gross rent is reduced to 75%, then the property’s PITIA is subtracted. PITIA means principal, interest, taxes, insurance and association dues.
Illustration—not an approval
$3,000 rent × 75% = $2,250. Less $2,000 PITIA = $250.
With at least 12 months of qualifying management experience, the positive amount may count. With less experience, use is limited to offsetting PITIA. Other requirements still apply.
Business impact: For an eligible investment purchase, positive qualifying income depends on the borrower’s documented rental-management experience.
Next move: Ask the lender to calculate the usable amount and confirm whether income can exceed the property payment.
Fannie Mae · B3-3.8-02, subject-property rental income ↗ · Fannie Mae · SEL-2026-08, revised September 23, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can my buyer rent out the current home and buy the next one?Revised rental policy · Dec. 1 application mandate; may apply earlier
Under the revised Fannie Mae departing-residence framework, the lender uses market-supported rent rather than a lease. Permitted evidence includes an appraisal, Form 1007, or qualifying market analysis with at least three rental comparables.
Business impact: Positive net rent only offsets the departing home’s PITIA. A shortfall counts in DTI. Less than 12 months of management experience also triggers six months of reserves for that home, in addition to applicable multiple-property reserves.
Next move: Before making the next offer, review housing payment history, supported rent, reserves and the lender’s adoption date. Multi-unit departing homes have additional treatment.
Fannie Mae · B3-3.8-05, departing residence ↗ · Fannie Mae · SEL-2026-08, revised September 23, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can Airbnb income qualify a conventional buyer?Revised Fannie Mae rental policy
The revised Fannie Mae short-term-rental rules have a separate framework. Eligible properties must be legally permitted one-unit investments; ADU short-term income is excluded. Purchase documentation can involve a long-term rent schedule or validated short-term data meeting the guide.
Business impact: A listing’s nightly rate or optimistic occupancy projection is not an underwriting approval.
Next move: Check local operating permission and ask the lender which documentation, management history and calculation apply before advertising qualifying income.
Fannie Mae · B3-3.8-03, short-term rentals ↗ · Fannie Mae · SEL-2026-08, revised September 23, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Does buying another investment property affect the next application?Revised Fannie Mae rental policy
Fannie Mae’s revised rules separately address investment properties purchased within 45 days of the subject-property application. The lender needs the current housing payment and specified market-rent evidence.
Business impact: A recent acquisition may require a different documentation path from an established rental reported on tax returns.
Next move: Disclose every recent purchase and its closing date at the start. Ask for the complete B3-3.8-06 calculation and reserve review.
Fannie Mae · B3-3.8-06, recently purchased investments ↗ · Fannie Mae · SEL-2026-08, revised September 23, 2026 ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can I promise the buyer an appraisal waiver?Fannie Mae education
No. Fannie Mae value acceptance depends on the final eligible DU findings and the lender’s ability to exercise the offer. A lender cannot use it when subject-property rental income is used to qualify.
Business impact: Proposed construction and construction-to-permanent loans are among the ineligible categories. A recently completed home has a limited exception when an eligible prior as-is appraisal exists.
Next move: Confirm the valuation path before setting expectations about cost, timing or contingencies.
Fannie Mae · B4-1.4-10, value acceptance ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
What should an agent do when an appraisal seems too low?Fannie Mae education
Help the borrower identify factual errors, unsupported analysis or relevant comparable evidence, then use the lender’s reconsideration-of-value process. A low result alone does not prove an error.
Business impact: Fannie Mae permits one borrower-initiated ROV per appraisal. A revision is not guaranteed, so transaction deadlines still need attention.
Next move: Ask for the lender’s instructions and deadline. Submit specific evidence promptly; discuss contract options with the buyer and their attorney.
Fannie Mae · B4-1.3-12, appraisal quality / ROV ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can Realtors and builders give information to the appraiser?Federal valuation-independence rule · covered transactions
Yes, appropriate factual property information and correction requests can support an independent valuation. CFPB rules prohibit coercion or attempts to force a predetermined value in covered transactions.
Business impact: A useful property package helps explain the home; pressure to “hit the number” is unacceptable.
Next move: Coordinate through the lender’s process. Supply accurate improvements, permits, contracts, concessions and relevant comparables without demanding an outcome.
CFPB · Regulation Z §1026.42, valuation independence ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Why are zoning and “highest and best use” getting attention?UAD 3.6 policy · effective immediately for that format
Fannie Mae’s UAD 3.6 guidance examines present use, residential highest and best use, subordinate nonresidential uses and comparable selection. Present use and highest and best use need not always be identical.
Business impact: An unusual use, ADU or redevelopment possibility may affect the analysis and eligibility. It is not an automatic approval or denial.
Next move: Flag zoning, unit count and business uses early. Provide permits and accurate property facts; let the lender and appraiser apply the relevant policy.
Fannie Mae · Appraiser Update, highest and best use ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Why does a new-build appraisal use sales outside the development?Fannie Mae education
Fannie Mae requires evidence of market acceptance within the development and in the competing market. When a project has no settled inside sales, a specified pending-sale alternative and outside closed sales may be used.
Business impact: The builder’s price list or land-plus-construction cost does not, by itself, establish market value.
Next move: Provide closed-sale details, contracts, incentives and specifications. Ask the lender to flag a first-phase development before ordering the appraisal.
Fannie Mae · B4-1.3-08, comparable sales ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Do paid upgrades add the same amount to appraised value?Fannie Mae education
Do not promise a dollar-for-dollar increase. The appraisal must evaluate market evidence, including concessions and upgrades in the subject and comparable builder sales.
Business impact: A buyer’s design selections may cost more than the value the market supports.
Next move: Keep an itemized specification and upgrade list. Review financing and available cash before buyers commit to major changes.
Fannie Mae · B4-1.3-08, comparable sales ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
How much can a seller or builder contribute?Fannie Mae education
For standard Fannie Mae financing concessions, principal residences and second homes generally allow 3% above 90% LTV/CLTV, 6% at 75.01%–90%, and 9% at 75% or less. Investment properties generally allow 2%. Limits use the lower of price or appraised value, and eligible actual costs also limit use.
Business impact: Builder-funded buydowns generally count toward applicable contribution limits. Excess credits or giveaways can affect the underwriting price calculation.
Next move: Have the lender review the full incentive package before contract execution. These limits are not universal FHA, VA, jumbo or DSCR limits.
Fannie Mae · B3-4.1-02, interested-party contributions ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Does a 2-1 buydown help a buyer qualify for more?Fannie Mae education
Under Fannie Mae rules, the lender qualifies the borrower at the note rate, not the temporarily reduced payment. The subsidy changes early payments, not the mortgage note terms.
Business impact: A temporary buydown should not be presented as a permanently lower rate or guaranteed future refinance.
Next move: Compare the full payment schedule and funding agreement. Ask what happens to unused funds after an early payoff; the agreement matters.
Fannie Mae · B2-1.4-04, temporary buydowns ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can a new home close with unfinished work?Fannie Mae education
Completion evidence is generally required before a loan is sold to Fannie Mae. Limited postponed-improvement options exist, subject to specific conditions. The lender’s funding requirements may be stricter.
Business impact: A completion certificate, final appraisal condition and occupancy approval are different checkpoints. An unfinished item can change the closing plan.
Next move: Ask the lender early about the approved completion method, any escrow and required occupancy documentation. Do not promise a holdback or closing date before approval.
Fannie Mae · B4-1.2-05, completion requirements ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Why can a qualified buyer still have a condo financing problem?Fannie Mae education
The project needs its own review. Critical repairs, insurance and other project conditions can affect eligibility independently of the buyer. Fannie Mae’s “No findings” status does not mean a project has been reviewed or approved.
Business impact: A prior closing in the building does not settle the current loan’s review.
Next move: Request the HOA contact and lender’s document list early. Ask the HOA or lender to check project status and resolve missing information before financing deadlines.
Fannie Mae · Condo Status Finder explained ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Is the buyer’s condo insurance enough?Fannie Mae education
Often it is not the whole requirement. The lender must assess the project’s applicable master coverage as well as any required individual unit coverage. Fannie Mae has specific coverage and deductible standards.
Business impact: A buyer’s HO-6 policy does not automatically cure a master-policy deficiency. A new project may also need a coordinated handoff from builder coverage to HOA coverage.
Next move: Ask the HOA or builder for the current master policy and insurance contact early. Have the lender and insurance professional review sufficiency.
Fannie Mae · B7-3-03, master property insurance ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Can an in-law suite or ADU help with financing?ADU planning · verify current guide and report format
Possibly. An ADU is an independent living space with sleeping, cooking and bathroom facilities; a spare bedroom alone is not the same thing. Property eligibility and usable rental income require separate reviews.
Business impact: The listing description does not establish legal use, eligible unit count or qualifying income.
Next move: Provide the layout, permits and intended occupancy. Ask the lender which current property and rental rules apply before including ADU rent in the buyer’s budget.
Fannie Mae · Accessory dwelling units ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Is a DSCR rental loan underwritten like conventional financing?Non-QM / DSCR · lender-specific
No. DSCR programs focus on an investment property’s rental income relative to its payment, with lender-specific rules. Conventional qualifying rental income and a DSCR lender’s calculation are not interchangeable.
Business impact: Rent treatment, property types, reserves, entity ownership and prepayment terms can change the financing fit.
Next move: Ask Paul to identify the actual lender and review the scenario before an offer. A passing ratio is not a guarantee of cash flow or approval.
AD Mortgage · DSCR program; lender-specific example ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
What mortgage timing should an agent build into the closing plan?CFPB · covered mortgage transactions
For mortgages covered by the rule, the borrower must receive the Closing Disclosure at least three business days before closing. It summarizes the final loan terms and closing costs.
Business impact: A contract closing date does not remove required disclosure timing or unresolved loan conditions.
Next move: Coordinate disclosure receipt, final figures and the lender’s remaining conditions. Ask the lender to assess any late loan change before promising the same closing date.
CFPB · Closing Disclosure explainer ↗
Source checked October 14, 2026 · Planning guidance, not a loan commitment.
Bring the question before the offer.
Ask Paul about a scenario ↗Talk with Paul about the property, financing path and timing. Share a general scenario first; send borrower documents only through an approved secure channel.
Open educational resources—no registration required. Question topics draw on published industry FAQs and transaction planning. NAR · Residential appraisal FAQs for agents ↗. Search-volume analytics are not connected. This collection grows as additional answers are verified.
DATED POLICY BRIEFS
What changed—and when it applies.
Selected verified updates. Publication dates and effective dates are different; lender implementation and additional requirements can also differ.
Employment and income: the October changes to ask about
- Published here
- October 14, 2026
- Announcement
- October 7, 2026 · SEL-2026-09
- Applies to
- Applicable Fannie Mae loans; verify the specific income type and application date.
- Employment verification: lenders have more flexibility in verification methods immediately. Existing timing requirements remain.
- Minority business ownership: the K-1 verification clarification applies to applications dated December 2, 2026 or later. Rental-only K-1 income is excepted from that verbal-verification requirement.
- Time-limited income: the three-year continuance measurement moves to the application date, effective immediately.
Practical next step: buyers, Realtors and CPAs should ask which rule and effective date apply before changing the documentation plan. Method flexibility does not remove income verification.
Read Fannie Mae’s original announcement ↗ · Checked October 14, 2026
FHA credit-score models: keep January 1, 2027 on the calendar
- Announcement
- October 8, 2026 · FHA INFO 2026-24 / Mortgagee Letter 2026-11
- Effective scope
- Title II mortgages with FHA case numbers assigned on or after January 1, 2027.
HUD announced guidance adding VantageScore 4.0 and FICO Score 10T alongside Classic FICO, including how the minimum decision score is determined when multiple models are submitted.
Buyer and Realtor takeaway: ask which model and case-number timing apply. Do not assume a score in a consumer app is the score used for your mortgage, or that this future change applies to an October closing.
HUD Mortgagee Letter 2026-11 ↗ · FHA announcement ↗
Checked October 14, 2026
Find the guidance that fits your next move.
These practical guides are general education. They are not an exhaustive underwriting manual or an approval decision.
14 guides
No matching guides. Try another audience or a shorter search.
EVERGREEN GUIDE
Start with the whole monthly cost
Do Compare principal, interest, taxes, insurance, HOA dues and any mortgage insurance. Keep a separate cushion for upkeep.
Avoid Do not use the principal-and-interest payment alone as your ownership budget.
CFPB · Loan Estimate explainer ↗
Checked October 14, 2026
EVERGREEN GUIDE
Compare offers on the same basis
Do Ask for Loan Estimates for comparable loan types and terms. Review points, lender credits, costs and cash to close.
Avoid Do not choose a loan from the headline interest rate alone.
CFPB · Loan Estimate explainer ↗
Checked October 14, 2026
EVERGREEN GUIDE
Keep the trail behind your down payment
Do Save complete statements and records for transfers, gifts and asset sales; ask the loan team what documentation your program requires.
Avoid Do not assume an unexplained cash deposit is usable. Fannie Mae purchase and refinance deposit rules differ.
Fannie Mae · Depository accounts ↗
Checked October 14, 2026
EVERGREEN GUIDE
Check before taking on new credit
Do Discuss a new car loan, store financing or changes to credit accounts with your loan team while the mortgage is in process.
Avoid Do not assume opening or closing an account will improve your score. New credit and account history can affect it.
FDIC · Credit reports ↗
Checked October 14, 2026
EVERGREEN GUIDE
Give your closing numbers a careful review
Do For loans covered by the rule, use the three-business-day Closing Disclosure review period to compare the latest Loan Estimate, cash to close and loan terms.
Avoid Do not sign with unresolved questions about a changed fee or payment. Ask the lender to explain.
CFPB · Closing Disclosure explainer ↗
Checked October 14, 2026
EVERGREEN GUIDE
Verify before you wire
Do Confirm payment instructions with your trusted settlement professional using a phone number established independently in advance.
Avoid Do not rely on a last-minute email, its phone number or a changed account instruction.
CFPB · Protect your closing funds ↗
Checked October 14, 2026
EVERGREEN GUIDE
Give refinancing a specific job
Do Compare the new loan’s costs, payment, remaining term and total borrowing cost against a clear goal and expected time in the home.
Avoid Do not treat a lower payment as proof of savings; extending the term can increase total cost.
CFPB · Should I refinance? ↗
Checked October 14, 2026
EVERGREEN GUIDE
Check the exit cost first
Do Review your existing loan for a prepayment penalty and include applicable costs when comparing a refinance.
Avoid Do not assume fees disappear because they are financed or offset with a different rate.
CFPB · Should I refinance? ↗
Checked October 14, 2026
EVERGREEN GUIDE
Ask which DSCR rulebook applies
Do Confirm the selected lender’s rent calculation, property eligibility, reserves, ownership structure and prepayment terms before committing.
Avoid Do not treat another lender’s DSCR minimum as universal. These are lender-specific investment-property programs.
AD Mortgage · DSCR program (lender-specific example) ↗
Checked October 14, 2026
EVERGREEN GUIDE
Look beyond qualification to the property budget
Do Prepare a separate ownership budget for vacancy, repairs, management and other expenses, alongside the lender’s rent and payment calculation.
Avoid Do not mistake a qualifying DSCR result for a guarantee of positive net cash flow or investment return.
AD Mortgage · DSCR program (lender-specific example) ↗
Checked October 14, 2026
EVERGREEN GUIDE
Check credits before writing the offer
Do Ask the loan team to review proposed seller credits against the actual loan program and closing costs. For Fannie Mae, limits depend on occupancy and leverage.
Avoid Do not promise every dollar of a negotiated credit will be usable.
Fannie Mae · Interested party contributions ↗
Checked October 14, 2026
EVERGREEN GUIDE
Make incentives transparent early
Do Document builder incentives and buydown contributions for review with the loan team and appraiser. Fannie Mae treats builders as interested parties.
Avoid Do not assume concessions can replace the down payment or reserves; the selected program’s rules control.
Fannie Mae · Interested party contributions ↗
Checked October 14, 2026
EVERGREEN GUIDE
Budget for the completed home
Do Confirm estimated property taxes and insurance for the property being financed. Ask the local tax authority about the assessment and timing.
Avoid Do not assume the present land-only tax bill will represent the completed home’s ongoing cost.
CFPB · Loan Estimate explainer ↗
Checked October 14, 2026
EVERGREEN GUIDE
Separate usable assets from a bank balance
Do Tell the loan team when business funds will be used for closing and provide the requested ownership and account records.
Avoid Do not assume all business cash is available for personal closing needs. The lender must review the applicable requirements.
Fannie Mae · Depository accounts ↗
Checked October 14, 2026
Useful guidance starts with a checkable source.
Each brief links to its source and shows the date checked. Agency rules, lender-specific programs and practical planning suggestions are labeled separately. A lender example does not mean every lender follows that policy or that a program is available for your circumstances.
We distinguish confirmed changes from proposals and future effective dates. Older entries remain dated so you can see their context. Confirm the current guide, lender requirements and state availability before relying on an entry for a transaction.
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