Using Boarder Income To Qualify
If someone has been renting a room from you and paying you regularly, that rent can count as income on your loan. The rules are specific, and they reward the people who kept records.
Rent From A Roommate Is Income, With Conditions
Every one of those conditions is about proof
- The boarder must have lived with you and paid you rent for the past twelve months
- Evidence of payment for at least nine of the most recent twelve months, averaged over twelve
- Documentation showing the boarder’s address is the same as yours
- A written agreement setting out the boarding terms and the intent to continue
- The boarder cannot be obligated on the mortgage or hold an ownership interest
- Rent paid directly to a third party rather than to you does not count
Boarder rent can carry up to 30% of your qualifying income
Twelve Months of Shared Residency
Nine of Twelve Payments Documented
The Boarder Is Not On The Loan
Payments Have To Come To You
A Written Agreement Is Required
What Underwriting Needs To See
Three kinds of proof, and a letter of explanation cannot replace any of them.
Boarder income is rent paid to you by someone living in your home who is not on the mortgage and holds no ownership interest in the property. Where it is allowed, it can carry a meaningful share of the qualifying income on a one-unit home, which is often the difference between a file that works and one that does not.
Two things decide whether boarder income makes it onto your application. The first is time, because the arrangement has to reach back twelve months rather than having started when you decided to buy. The second is evidence, because underwriting works from records rather than from what you and your roommate remember. Where the payments came to you and you can show them, this is usually straightforward.
What underwriting is testing is whether the arrangement is real and established rather than assembled for the application. That means twelve months of the boarder living with you and paying you, evidence of receipt for at least nine of the most recent twelve months, and documentation tying the boarder to your address. Where fewer than twelve months of payments are documented, the income is averaged across the full twelve.
Where Boarder Income Changes The Answer
Six situations that decide whether the rent counts.
You Have A Long-Term Roommate
Someone who has rented a room from you for a year or more and paid you directly. This is the situation the rules were written for, and it is the cleanest version of the file.
You Kept The Records
Canceled checks, bank statements, deposit slips, or transfers through services such as Venmo or PayPal. What matters is that the payments are traceable and that they came to you.
Nine Months Is Enough
You do not need a perfect twelve. Evidence covering at least nine of the most recent twelve months works, with the income then averaged across the full twelve.
The Boarder Is Coming With You
The written statement has to say the person has lived with you for the past year and intends to continue living with you in the new home. A roommate who is staying behind does not help the file.
A Renter Of An ADU Is Not A Boarder
FHA draws a line here. Where the space is an accessory dwelling unit, the income falls under the ADU rental rules instead, and those work differently.
Rent Paid To Someone Else Will Not Count
If your roommate pays the landlord or a third party rather than paying you, the arrangement does not produce boarder income no matter how long it has been running.
Hear From Homeowners Like You
Frequently Asked Questions
The questions that come up when a roommate is part of the picture.
Yes, within limits. Rent paid to you by someone living in your home can be used as qualifying income on a one-unit property, up to a defined share of your total qualifying income. The person cannot be on the mortgage and cannot hold an ownership interest in the property.
Twelve months. The boarder has to have lived with you and paid you rent on a regular basis over the past year. An arrangement that started recently, or one that begins when you buy the new home, does not qualify.
You have room. Evidence of receipt for at least nine of the most recent twelve months is enough, and the income is then averaged across the full twelve months for qualifying. So a couple of gaps will not sink the file.
With documentation showing the boarder’s address is the same as yours. A copy of a driver’s license, a bill, or a bank statement in their name at your address all work. You will also provide a written agreement covering the boarding terms.
It does. Bank statements, canceled checks, deposit slips, and transfers through services such as Venmo or PayPal are all acceptable ways to show the payments were received. What matters is that the record is traceable and that the money came to you rather than to a third party.
No. The person providing the rental income cannot be your spouse or domestic partner. Boarder income is meant to capture a genuine renting arrangement with someone outside the household relationship.
Probably not as boarder income. FHA treats a renter of an accessory dwelling unit as something other than a boarder, and the income is handled under the ADU rental rules instead. Those have their own documentation and their own restrictions, so it is worth sorting out which one applies early.
Find out what you qualify for
Whether you have a long-standing roommate or you are weighing whether the arrangement will help at all, it is worth checking what your records will actually support. Start a pre-qualification today.
Get Pre-Qualified*Loan amounts, rates, terms, and down payment requirements are subject to credit approval, income and asset verification, and program eligibility. Boarder income is subject to agency and FHA guidelines, including limits on the share of qualifying income it may represent, the property types on which it may be used, and the documentation required to evidence receipt and shared residency. Eligibility depends on the program, the property, and the file. This is not a commitment to lend. All loans are subject to credit approval, underwriting, and property qualification. Saxton Mortgage, LLC, NMLS #1717191. Equal Housing Lender.