The direct answer
Fannie Mae does not use a universal 75% rule for every rental-income scenario. Under its current subject-property guidance, specified long-term rental situations can use 75% of gross monthly rent to estimate net rental income before subtracting PITIA. Other scenarios, including certain short-term rentals, can use different treatment.
Confirm the property and transaction type first
Purchase versus refinance, principal residence versus investment property, long-term versus short-term rental, and the borrower’s management history can change how qualifying rental income is calculated.
To apply the approach to an editable scenario, use the Rental Property Calculator. For the neighboring question, explore Rental Property Cash Flow Calculator.
Understand what the 25% reduction represents
Using 75% of gross rent is a qualifying-income convention that accounts for vacancy and operating uncertainty in specified cases. It is not the same as saying actual property expenses always equal 25% of rent.
Subtract the applicable PITIA when required
For the current subject-property calculation, Fannie Mae guidance can determine adjusted net rental income by taking the allowed net rental income and then subtracting the property’s PITIA. The resulting amount may be treated differently depending on borrower experience and occupancy.
Worked example
If qualifying gross monthly rent is $3,000 and the applicable Fannie Mae method uses 75%, the initial net rental-income figure is $2,250 before subtracting PITIA. That arithmetic does not by itself establish final loan eligibility.
Common mistakes and limitations
Do not apply 75% to every rental property, every lender or every short-term-rental scenario.
Scenario estimator based on user inputs. It is not an appraisal, lending decision, tax calculation or investment recommendation.
Frequently asked questions
Does Fannie Mae always use 75% of gross rent?
No. The current guide uses different methods depending on the transaction, property and documentation, and short-term rental rules can differ.
Is the 25% reduction an estimate of my exact operating expenses?
No. It is an underwriting convention in specified qualifying-income scenarios, not a property-specific expense audit.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- Fannie Mae — Selling Guide B3-3.8-01, General Rental Income Information (09/02/2026)Current U.S. rental-income documentation context; comps/market rent and qualifying-income concepts.
- Fannie Mae — Selling Guide B3-3.8-02, Rental Income from the Subject PropertyCurrent subject-property rental-income qualification, 75% gross-rent treatment and PITIA context.
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