Qualifying rental income towards DTI

[Joe Val]

I am buying a SFH as a primary residence and will rent my current condo. I have never had rental income before so my income taxes do not show rental income. At 75% my rental condo still leaves a positive net income. Can I use that net rental income as qualifying income towards the DTI ratio of the new purchase?

[Justin Thompson]

If they underwrite through Fannie Mae, they can/will count 75% of the income stated on the lease or appraisal whichever is lower. If they underwrite through Freddie Mac, the income has to be on your tax returns for 2 years before its counted as income. Most loan officers will tell you they can't count it and will count it against you. Loan officers are sometimes "check box monkeys". (No offense!) So find yourself an educated loan officer and you won't have an issues.