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Ask The Experts: Question of the Week

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Fannie Mae – Rental Income – New Investment Property Purchase


My client is on the title for his primary residence but is not on the note. In order to use the rental income on the investment property, does this count as an owner of a primary residence?


Your concern is that you cannot use the investment property rent to offset PITIA on the new investment property because of no housing payment; let me offer you this clarification below:

Fannie Mae only says you either have to own a primary residence OR have a current housing expense. So they technically do own a primary residence as evidenced by being on title, and so you should be okay to follow the guidance below, even if they are not on the primary residence mortgage (or it could be mortgage-free).

Your concern about using rents to offset PITIA on new investment property is only if both conditions were true, meaning they didn’t own a primary residence AND they don’t have a current housing expense (i.e., renting an apartment).

So, in my opinion, your borrower:

  1. Fact: owns a primary residence because they are on title to the home they live in, and that proves ownership
  2. They presumably have less than one year of landlord history.
  3. So, you would be limited to just offsetting PITIA on new investment property purchase.