The path from one home to the next just got a little smoother. Fannie Mae’s updated loan guidelines make it easier for homeowners to qualify to buy a new home before selling their current one.
Securing a New Home Before You Sell
Homeowners uncertain how long it will take to sell their property and/or the timeline to find the perfect next home are looking for solutions.
We’ve managed this conundrum with a myriad of bridge loan products since late 2021, when market activity demanded securing a home before even thinking of a sale.
With the September 2, 2026 announcement, we add to our bundle of buy-before-you-sell solutions.
Improved Qualifying Guidelines
The announcement has streamlined how we can offset current mortgage obligations on a departing residence to accommodate a new purchase.
Applied appropriately, this will provide flexibility and cost savings for homeowners choosing a buy-before-you-sell strategy.
The Takeaway
Prior to the Update: To offset the current payment from qualifying, Fannie Mae previously required a homeowner obtain ALL THREE of the following to verify rental income to offset the payment:
- A signed lease agreement
- Proof of the first month’s rent received
- Proof that a security deposit was collected
Now: The newly announced guidelines simplify how rental income can be verified by requiring ONE of the following:
- An appraisal with a market rent analysis
- A Form 1007 (Comparable Rent Schedule obtained via an appraiser)
- A market analysis using tools such as Zillow, Redfin, MLS, with at least three comparable rentals
The result: up to 75% of the estimated rent can be applied to offset that payment (principal, interest, taxes, insurance, mortgage insurance) on the departing residence.
Who This Helps
- Sellers Wanting to Buy First: If a seller can cover duplicate payments for a few months but needs a simple solution to eliminate a portion of their current mortgage from qualifying, this could make it pencil.
- Sellers Wanting to Retain a Home as a Rental: Eliminating a portion of the current mortgage obligation from qualifying with a plan to keep the home as a rental just got a whole lot easier. Select from one of the three new choices to provide verified rental income and worry about finding your tenant after you move out.
While the 75% offset allowance likely won’t eliminate a full payment obligation from qualifying, it can close a gap for a large percentage of move-up buyers.
Time to Get Creative
Buy before you sell can be applied across a spectrum of seller circumstances, combining the variety of financing products in the “tool kit.” As you explore choices, keep in mind that different lenders will have their own suite of products.
- Pair this with a HELOC, assuming they qualify for the payments, to provide the equity advance without the expense or timeline restrictions of a traditional bridge loan. Use the market rent analysis to offset the debt obligation from qualifying. Brilliant!
- Sellers who want to keep their current home as a rental and maintain that 3% rate can shop BEFORE they have a signed lease agreement or even list their property for rent.
- Minimize duplicate payments with the Fairway 85% bridge loan. Advance up to 85% of the departing residence equity as a down payment on a new home. No duplicate payments, six-month selling timeline. (Max advance $750K)
We apply our expertise to cost-effectively match the right products to your timeline.
Closing the Gap
Financial advisors are among the biggest advocates for bridge financing. Why? Because they work the numbers from multiple angles, see the value in preserving invested assets, and recognize how uncertainty paralyzes decisions.
This announcement does NOT replace bridge financing for the majority of buy-before-you-sell candidates, as it does NOT eliminate duplicate mortgage payments or offer an equity advance like many traditional bridge products can.
It does add to the arsenal of financing solutions to help homeowners ease that transition.
There are so many ways to put this to work for homeowners. Don’t let uncertainty stifle your next move.
