Can I Use Rental Income From A Roomate?

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Recently, starting 11/29/2017 Freddie Mac has made some big strides in changing the requirements to qualify for a refinance if you have a Live-in Aid (roommate) or if a renter rents your Accessory Unit/Granny Flat/Guest House.

Updates for rental income received for a live-in aid are as follows:
  • Removing restriction that the Primary Residence must be the subject property
  • Specifying the receipt of rental payments must be documented for the most recent 12 months
  • Removing specific income continuance requirement
  • Specifying that rental income from a live-in aide who resides in the accessory unit is acceptable

Prior to this change you were not able to utilize the income unless it was documentable on your schedule E which in most cases people receiving rental income from a roommate were not doing that.

Freddie Mac has also changed its requirements on properties owned in the prior calendar year:

  • Option 1: for long-term rental income sources (e.g., lease with at least a one-year term). It requires a current lease which lends support to income stability and continuance, so a shorter documented history (one-year tax return) is acceptable.
  • Option 2: for short-term rental income sources (e.g., rental income from a source where a lease is not utilized, lease with less than a one-year term). Short-term rental income sources may be more volatile than long-term rental income sources, so a longer documented history (two year's tax returns) is required to support income stability and continuance.
If this has prevented your ability to refinance in the past please give us a call at 800-779-4547 and we would be happy to discuss the new guidelines and determine if they would help you qualify.