ADU Rental Income Mortgage 2026: How Fannie Mae Counts ADU Income for Qualification

As ADUs proliferate in high-cost markets, more buyers are purchasing properties expecting ADU rental income to help carry the mortgage. Fannie Mae guidelines allow that income to count toward qualification, but only under specific documentation requirements. Missing one step disqualifies the income entirely.

Fannie Mae ADU Income Guidelines

Per Fannie Mae Selling Guide B3-3.1-09, rental income from an ADU on a subject property may be used when the borrower does not have a history of rental income. Fannie Mae allows up to 75% of the documented monthly market rent to count as income. The 75% factor covers vacancy and maintenance risk.

• ✦Documentation required: signed lease agreement or appraiser market rent comment
• ✦Appraiser must identify comparable ADU rentals in the appraisal report
• ✦75% of market rent is applied, not 100%
• ✦ADU income can be added to borrower qualifying income only when using Fannie guidelines
• ✦No two-year rental history required for ADU on subject property, unlike traditional rental properties

What Freddie Mac Allows

Freddie Mac Single-Family Seller/Servicer Guide allows similar ADU income treatment on single-family properties. Freddie also applies a vacancy factor and requires market rent documentation from the appraisal. Unlike Fannie, Freddie has historically been more conservative on ADU rental credit, so verify current guidelines before quoting income to a borrower.

Underwriter Red Flags

An ADU lease signed the week before application raises red flags for occupancy fraud. The income is more credible when there is an established lease with a payment history, utility separation, or a documented market rent from the appraisal. For purchases, a 12-month lease signed at or before closing is the cleanest documentation path.