Using Apartment Rent to Qualify for a Mortgage on Long Island

Rent from an apartment in the home you live in can count toward your income when you apply for a mortgage.

That goes for an accessory apartment in a one-family house, and for the other unit of a two-family. A lot of Long Island homes have one or the other. With Nassau and Suffolk property taxes, every bit of income helps when you qualify.

Here’s how much of the rent lenders count and what they’ll want to see.

Can you use apartment rent to qualify for a mortgage?

Often, yes, if you live in the home and the apartment meets the lender’s rules. Lenders can usually add about three-quarters of the rent to your income, from an accessory apartment (ADU) or the other unit of a two-family. On an accessory apartment, the cap is a little under a third of your qualifying income.

An accessory apartment, or ADU, is a separate apartment that comes with a one-family house. It can be over the garage, in the basement, in an addition or in its own small building. It needs its own kitchen, its own bathroom and a place to sleep.

A second kitchen alone doesn’t make it an apartment. Neither does a space you can only reach through the main house.

Planning to count the rent? Tell me early, so the appraisal comes with a rent estimate.

How much of the apartment’s rent counts?

Lenders usually count about three-quarters of the monthly rent. The rest allows for months the apartment sits empty.

The rent comes from the lease or from the appraiser’s estimate of market rent. FHA uses whichever is lower.

The counted rent is added to your income. Your full house payment still counts as a debt.

For example, say you’re buying a house in Suffolk with an apartment over the garage. You earn $7,000 a month before taxes, and the apartment rents for $2,000. Three-quarters of that rent is $1,500, so the lender works with $8,500 in monthly income.

An accessory apartment has one more limit, and it only matters when the rent is big next to your pay. The rent that counts can’t be more than a little under a third of your total qualifying income. In this example, $1,500 is well under that.

Fannie Mae’s own example shows why this helps. Buyers earning $6,000 a month didn’t qualify on pay alone. Once the rent from their $1,400 apartment counted, they did.

My advice: make sure you can still cover your bills in a month when the apartment sits empty. If counting the rent won’t help in your case, I’ll tell you straight.

Which loans count ADU rental income?

Conventional and FHA loans both count accessory apartment rent. Lenders I work with use these rules. Some lenders add their own on top.

• Conventional (Fannie Mae and Freddie Mac): rent from one accessory apartment on a one-family home you live in, for a purchase or a refinance with no cash out. Fannie Mae also counts rent from the other units of a two- to four-family you live in.
• FHA: rent from an accessory apartment, or from the other units of a two- to four-family you live in. Here’s more on when an FHA loan fits.
• VA: rent from the other units of a two- to four-family you live in, if you can show you’re likely to do well as a landlord.
• Bank statement and 1099 loans: I also offer these through lenders I work with, and they can count apartment rent on a home you live in too.
• Buying a rental you won’t live in? Lenders look at that differently. Here’s how rental financing works.

Accessory apartment or two-family: which rules apply?

On Long Island, the two-family house is the workhorse. Plenty of one-family homes in Nassau and Suffolk have an apartment too, though, and the rules aren’t the same.

The appraiser decides which one you have, based on things like separate utility meters and a separate mailing address. A one-family with one accessory apartment is still a one-unit home, so one-unit rules and loan limits apply.

• One-family with an accessory apartment: the cap applies, and the rent comes from one apartment only.
• Two- to four-family you live in: the same three-quarters of the rent from the other units counts, with no cap. Loan limits are higher for two to four units.

What paperwork do you need to count apartment rent?

Lenders usually want the appraiser’s rent estimate, plus the lease if a tenant is staying.

• The appraiser’s rent estimate. The appraiser compares similar rentals nearby and reports what the apartment should rent for. Plan on a full appraisal if you’re counting the rent.
• The lease, if a tenant is staying. The lender wants a signed copy. Under Fannie Mae’s September 2026 rules, the lease has to be arm’s-length, not with anyone who has a stake in the sale. Those rules also ask for proof the rent is being paid, usually two recent months of bank statements or transfers.
• A new lease, if you sign one. The same Fannie Mae rules apply, plus a term of at least six months.
• Tax returns, if you already rent it out. On a refinance, the lender works from the rent on your tax returns.
• Your current housing payment. Fannie Mae wants to see what you pay for housing now, like rent or a mortgage. If you don’t have one, the rent may not count under its rules.
• Some savings after closing. FHA asks for two months of house payments when it counts accessory apartment rent. Fannie Mae and VA ask for six months on a two- to four-family.

Here’s the full list of rental income documents. Not every apartment’s rent can be counted, so send me the details early.

ADU rent calculator: how much of the rent could count?

See how much of the apartment’s rent a lender could add to your income. You need the rent, your other income and the loan type.

Frequently asked questions