Can I count rental income to qualify on conventional?
Yes, with documentation. Existing rental income from another property uses 75% of the lease amount (or market rent if no lease). Income from the subject investment property uses 75% of the projected rent in most cases. New investors without 2-year management history have stricter rules.
What this actually means.
Existing rental income on borrower's other properties: documented via Schedule E on tax returns plus current lease, counted at 75% of gross rent. Subject-property rental income: 75% of market rent (appraiser-determined) or current lease. Borrowers without two years of self-management experience may need to show projected income via lease + appraiser rent comps. PITI of the subject property is subtracted from rental income before applying to qualifying. Subject to Fannie/Freddie guidelines.
Where this can move.
Down payment, reserves, rental income calculation, multi-financed-property reserve rules, and investment LLPAs all stack to drive pricing.
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More conventional questions on Investment Property.
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.