I recently moved to a new state and am converting what was my primary residence into a rental.  I am set to close on a new primary residence however my underwriter is insisting that my debt to income level is too high because of the mortgage on the old primary home.  They refuse to acknowledge any potential rental income from the conversion of this former primary home unless I am able to provide them a signed lease agreement with a tenant already in place.  They will not accept an estimated monthly rent amount that was provided by my property management company.  The former primary needed some minor repairs such as carpet/fence repair and due to those repairs that home will likely not be rented by the time I am supposed to close on my new primary.

Is it true that Fannie Mae guidelines prohibit using projected rental income even if there is already a signed agreement with a property management company that shows a clear intent to rent that home? Not taking some sort of percentage of estimated future revenue doesn't make any sense. It would seem to me that just about anyone's DTI would be extremely high if they were calculating the debt as two mortgages and not having any rental income to offset that second mortgage until a signed lease is in place. Any help is greatly appreciated.