The buyers wanted to move from Irvine to Mission Viejo and keep their current home as a rental.
The sellers were willing to consider their offer, but they had two requirements: the purchase couldn’t depend on selling the Irvine home, and the buyers needed to close within 21 days.
Before they made an offer, we needed to answer a few questions. Could they qualify while keeping both homes? How would we document the rental income? And would they have the required reserves after closing?
Working out the rental income before the offer
The buyers didn’t have a tenant or a signed lease yet. Before the purchase went under contract, I found three comparable rentals in the Irvine area to support the projected market rent. That gave us documented numbers to work with before the buyers committed to the new home.
For this transaction, we were able to establish the rent without waiting for a lease or ordering a separate appraisal of the departing home solely to determine its rental value.
Under Fannie Mae’s updated departing-residence guidance, lenders can use market-analysis tools supported by at least three comparable rentals.
The qualifying calculation uses 75% of documented gross rent, then subtracts the departing home’s principal, interest, taxes, insurance and applicable association dues. Under this guidance, the rental income can offset that home’s housing payment, but any surplus cannot be added to qualifying income. A shortfall still counts in the debt-to-income calculation.
Knowing how those numbers would be treated helped us plan the purchase.
Making sure the reserves were there
This file required six months of reserves for the departing home. We reviewed the buyers’ eligible assets and documented that requirement before moving forward.
When you’re keeping one home and buying another, the down payment and closing costs are only part of the picture. The lender may also need to verify that you have sufficient eligible assets remaining after closing. Working through that early helped us avoid a surprise once the buyers were under contract.
Same-day conditional approval
The buyers made their offer without a contingency to sell the Irvine property. We submitted the conventional loan to underwriting and received a conditional approval that same day. The initial Closing Disclosure was issued that day as well.
The loan also included a lender-funded 1-0 temporary buydown, which provided payment relief during the first year. The payment was scheduled to increase after that year; the buydown did not permanently reduce the loan’s note rate.
The buyers closed in exactly 21 days and kept their Irvine home as a rental.
Start with the financing plan
If you want to keep your current home when you move, it helps to work through the financing before making an offer.
The rent estimate, reserve requirements, both housing payments and the closing timeline all need to fit together. In this case, that preparation helped the buyers make an offer that met the sellers’ requirements.
If you’re considering a move in Mission Viejo or South Orange County, let’s review your options before you write the offer.
Tyler Thrush | Maltese Mortgage
Call or text 949-547-6138
Personal NMLS #304934 | Company NMLS #1275835
Fannie Mae permits early adoption of the rental-income changes and requires them for applications dated on or after December 1, 2026. Lender requirements and individual circumstances vary. Fannie Mae announcement.
