An offer comes in under asking. The seller looks at it once and floats renting it out instead of selling. We have a 2.875% rate, they say. Why would we give that up?
Often a fair question. What changed is that the choice is no longer purely the seller’s. The lender on the next house gets a vote, and Fannie Mae just rewrote how that vote works.
What changed about renting it out instead of selling
Fannie Mae issued Selling Guide Announcement SEL-2026-08. It revised how rental income counts when a borrower keeps the home they are leaving. The implementation date was pushed from November 1 to December 1, 2026.
The old method was simple. You signed a lease and showed the tenant’s deposit. A share of that rent then counted toward qualifying for the next mortgage.
Under the new framework, lease agreements are not permitted for a departing residence. Qualifying rent comes from documented market rent instead. In practice that usually means an appraiser’s rent schedule built from comparable rentals.
Read that twice if you are the one planning to rent. The number is no longer whatever you and a tenant agree to. It is whatever the market supports, measured by somebody else.
The reserve requirement is the part that bites
This is the detail that decides who can actually do it.
Say you have less than twelve months of experience managing a rental. You now need six months of the full payment on the departing house held in reserves. That sits on top of whatever the new loan already requires.
Six months of a full payment means something different in New Jersey. The payment includes the tax line. On a house carrying a five-figure annual tax bill, that reserve alone can run past what most people keep liquid. A low tax rate still produces a large bill here, and this is one more place it shows up.
One thing did get easier. A tenant no longer has to be in place before you close.
Freddie Mac did not follow
Worth knowing before anyone decides the door is shut.
Freddie Mac still accepts the lease. A borrower with a signed lease and a documented deposit may still qualify on that basis there. The same seller can get two different answers depending on which agency the loan is written to.
That is not a loophole. It is a reason to ask the question early rather than assume the plan works.
Why renting it out instead of selling is rarely about the rate
Keeping a 2.875% loan is genuinely valuable. The mistake is treating the rate as the whole argument.
Hold the old house and the equity stays in it. If you are buying next, that money is not available for the down payment. So the new loan gets larger, at today’s rate.
The rental has to out-earn that gap. It also has to cover the real costs of being a landlord. And it has to do both reliably enough that one vacant month does not break anything.
There is more to the decision than financing. The tax clock starts when you move out, and New Jersey asks specific things of landlords. I went through all of it in what to know before you rent your house out here. The lender rule is the new piece.
What I can tell you and what I cannot
I am a real estate agent, not a lender. Whether you qualify is a question for a loan officer. So is which agency your loan goes to and how an underwriter reads your reserves.
The agency’s own guide is the authority, not anyone’s summary of it. Both sources above are industry readings of the change, published before it takes effect.
What I can tell you is the number the decision rests on. What would the house sell for today, and what would it realistically rent for? Those are the inputs. The rest is arithmetic performed on them.
The selling side is not weak at the moment. In Monmouth County the median sale price has been running near $734,000, with a median of 25 days on market over the last three months. A correctly priced house is not sitting around.
If renting it out instead of selling is the plan, decide it on the full picture rather than the rate alone. Send me the address and I will tell you what it would bring. Take that number to your loan officer before December.
Shea Merritt is a licensed New Jersey real estate agent with eXp Realty, working with buyers and sellers across Middlesex, Monmouth, and Ocean counties. He grew up in Old Bridge. He writes here about the arithmetic behind a move: what a house would actually bring today, what the tax line does to a monthly payment, and how to compare offers on their terms rather than on the top number. If you are weighing a sale or a purchase, send him the address and he will run the numbers on it.