Fannie Mae Stopped Taking Leases. Freddie Mac Didn’t.

Your client is buying a bigger place and keeping the old one as a rental. To qualify them, we want to count that rent. For as long as anyone in this business can remember, the way you did that was simple: get us a signed lease, and show us the tenant’s deposit hit your account. That is over.

Fannie Mae’s selling guide now says lease agreements are not permitted for a departing residence.

Not “we would prefer something else.” Not permitted. You can hand us a signed lease and a cleared rent check and it does nothing for you.

What Fannie Mae wants instead

The logic of the change is easy to follow once you see it. The old rule asked your tenant what the house rents for. The new rule asks the market.

That is the whole thing. Your tenant might be your buddy. Or your brother. A lease is two people agreeing on a number, and two people can agree on any number they like. A market rent figure cannot be negotiated into existence.

So instead of the lease, the file needs documented market rent.

In practice, expect that to mean an appraiser. Most lenders are going to ask for a rent schedule on the departing property — an appraiser looks at the market, pulls comparable rentals, and puts a number on what the place would actually rent for. That is the number the file uses. Plan around it, and build the time and the cost into the deal from the start.

They are no longer going to take the two parties’ word for it.

There is also language in the guide contemplating comparable rent data from other sources rather than an appraisal. We would not build a plan around it yet. How individual investors intend to apply that part is unsettled, and the gap between what a guide permits and what the investor buying the loan will actually accept is where files get stuck. If your lender tells you they have a path that does not require an appraiser, good — take it. Just do not assume it before you ask.

The one that actually kills files

The documentation is the headline. This is the part that stops deals.

Why family leases are specifically out

The guide is explicit that a lease used to document rental income cannot be with an interested party or a family member. In practice this was always how careful underwriters handled it, but it is written down now.

And for a departing residence it is close to academic, because the lease is not a usable document in the first place. That is the elegant part of the change. Once the market sets the number, it stops mattering who is living there. A sweetheart lease to a relative cannot inflate anything, because nobody is reading the lease.

The part nobody is talking about: for some people this is easier

Every write-up of this change frames it as a tightening. For a borrower who needs that rental income and does not have six months of reserves, it is. But look at what came off the list.

Under the old rule your client had to find a tenant, sign a lease, collect a deposit, and get all of it timed to land before closing. While still living in the house. While also buying another one. Anyone who has tried to show a property to prospective tenants while their own family is still in it knows exactly how pleasant that is.

That requirement is gone. No tenant needed before you close.

Get the market rent documented, have the reserves, close on the new house, move out, and then market the old one properly as an empty property. For a client with money in the bank, that is a materially better experience than the rule it replaced.

And Freddie Mac did not make the same change

This is the part most loan officers have not caught yet, and it is the reason the change is survivable.

Freddie Mac still takes the lease. So a borrower who did everything the old way — a signed lease, a deposited tenant check, and no six months of reserves sitting spare — is not out of options. For most programs that is going to be fine. The file may simply belong at the other agency.

We would confirm it on the specific file rather than promise it in advance. Agency rules move independently, which is the entire point of this post, and the version that is true this month is the version to check against your scenario.

Now the appraisal deadline, which moved and also did not

The second thing on our minds this week is UAD 3.6, the appraisal overhaul we have written about before. The short version: every form you have ever seen goes away. The 1004 for houses, the 1073 for condos, the 1025, all of it, replaced by one report that reshapes itself depending on the property.

The valuation does not change. The data entry changes enormously. It is far more structured, which is good for everyone downstream and painful for the appraiser doing it, and the appraisers we talk to say it adds hours to each report.

That is not an abstraction. We had an appraiser on our own panel, here in Broward, who used this as the reason to retire. The appraiser workforce is already shrinking and already older than the industry would like. A change that makes the work slower is not a neutral event.

The date still stands. The exception is per lender.

The mandate date was November 2, 2026, and it was not postponed. What happened at the end of September is that lenders were given a way to request an exception and keep submitting the current format past that date, into 2027.

Which means the answer is now different depending on who you ask. We went out to our own investors. Some had the exception approved already. Some were still deciding. One told us their approval runs only to February, not to the outer limit.

For the next several months, which appraisal form your buyer gets depends on which lender they picked.

That is a strange sentence to be true, and it is true right now. On balance we think it is good news. Everyone converting on the same morning was going to break something. Spreading the adoption out means fewer files sitting still in November while an underwriter and an appraiser figure out a new process on the same file.

What to do with all this

The thing underneath both of these

Neither of these made the news. Both of them are going to show up in the middle of somebody’s transaction over the next ninety days, and the person it happens to will find out at the worst possible moment.

That is most of what this job actually is. The enormous machinery moves somewhere out of sight, and what reaches your client is one line on a checklist that was not there last month.

We talk through this kind of thing every week on The South Florida Mortgage Report.

Capital Partners Mortgage Services, LLC · NMLS #2332376 · Craig Garcia, NMLS #653593 · 1515 N. University Dr., Suite D102, Coral Springs, FL 33071 · Equal Housing Opportunity · NMLS Consumer Access: www.nmlsconsumeraccess.org
Educational information only. Not a commitment to lend or an offer of credit, and not investment, tax or legal advice. Agency guidelines, investor overlays and implementation dates described here reflect published guidance as of October 2026 and are subject to change without notice. Documentation requirements, reserve requirements and rental income treatment vary by agency, program, investor and individual borrower circumstances, and the requirements that apply to any particular file are determined in underwriting. All loans are subject to credit, income, property, appraisal and program approval. Guest and third-party views expressed on our podcast are their own and are not endorsements by CPMS.