DSCRRENTAL INCOME · SUBJECT PROPERTY
75% rental income rule calculator
Fannie Mae Selling Guide section B3-3.8-02 tells the lender to multiply monthly gross rent by 75% and then to subtract the PITIA of the subject property. The result is the adjusted net rental income (ANRI). This calculator does that arithmetic for one subject property.
The 75% step is the purchase calculation. On a refinance, the guide uses it only when the property is not on Schedule E of the most recent tax return. The result estimates one guide calculation, not loan approval or cash flow.
ADJUSTED NET RENTAL INCOME (ANRI)
$350.00
Positive result. Shown as income of $350.00 per month.
- Net rental income (rent × 75%)
- $1,800.00
- PITIA subtracted
- $1,450.00
- DSCR, a different measure (rent ÷ PITIA)
- 1.66×
DSCR here is gross monthly rent divided by monthly PITIA, with no 75% factor. It is not part of the Fannie Mae calculation. How a lender uses a positive or negative ANRI depends on the rules quoted below. Those rules depend on the rental property management experience of the borrower and on whether the property is the principal residence of the borrower.
The calculation in the guide
For a purchase, B3-3.8-02 gives this instruction.
To determine adjusted net rental income (ANRI), the lender must multiply monthly gross rent by 75% for the net rental income amount, then subtract the PITIA of the subject property from the net rental income.
The guide then shows the formula as an example. The example has no dollar amounts.
Net Rental Income - PITIA = ANRI
The sections that this page uses do not give a reason for the 75% factor. This page does not give one.
Worked example with page numbers
These three rows use a gross monthly rent of $2,400.00 and three PITIA amounts. The amounts are an illustration made for this page. The calculator code made each row.
| Monthly PITIA | Rent × 75% | ANRI | DSCR (rent ÷ PITIA) |
|---|---|---|---|
| $1,450.00 | $1,800.00 | $350.00 | 1.66× |
| $1,800.00 | $1,800.00 | $0.00 | 1.33× |
| $2,100.00 | $1,800.00 | -$300.00 | 1.14× |
ANRI is zero when the PITIA equals 75% of the rent. At that point, rent divided by PITIA is 1 ÷ 0.75, which is approximately 1.33. A lower ratio gives a negative ANRI.
Which documents set the rent
The guide names the documents that the lender must obtain. For a purchase, the lender must obtain the following.
a Single-Family Comparable Rent Schedule (Form 1007) or Small Residential Income Property Appraisal Report (Form 1025), as applicable, and a copy of the fully executed lease agreement(s) when a lease is being transferred to the borrower.
For a refinance, the lender must obtain the following.
Form 1007 or Form 1025, as applicable, to support monthly gross rents; the most recent individual federal income tax returns (IRS Form 1040), including Schedules 1 and E; and copies of the current lease agreement(s) if the property meets one of the qualifying examples to justify the use of a lease agreement.
For both transaction types, if the current market rents do not reasonably support the gross rents on the lease or on Schedule E, one option that the guide gives the lender is to use the lesser amount
.
When the 75% step does not apply
On a refinance, the calculation depends on the tax return. This calculator does only the 75% step. It does not do a Schedule E cash flow analysis.
| Refinance case in B3-3.8-02 | Guide text for the lender | This calculator |
|---|---|---|
| The property is on Schedule E and meets one of the qualifying examples for the use of a lease agreement | calculate the net rental income by performing a cash flow analysis using Schedule E, average the result over the months in service, then subtract the PITIA | Not applicable |
| The property is on Schedule E and does not meet one of those examples | calculate net rental income by performing a cash flow analysis using Schedule E, and average the results over 12 months. | Not applicable |
| The property is not on Schedule E of the most recent return | multiply the lease amount by 75% for the net rental income amount, then subtract the PITIA for the subject property. | Applicable |
How the lender uses the result
B3-3.8-02 makes the use of ANRI depend on the rental property management experience of the borrower.
| Experience | Positive ANRI | Negative ANRI |
|---|---|---|
| 12 months or more | if ANRI is positive, the lender may use the full amount in qualifying. | if ANRI is negative, the lender must include the amount in the DTI ratio. |
| Less than 12 months | if ANRI is positive, the lender may use the rental income to offset the PITIA only. | if ANRI is negative, the lender must include the amount in the DTI ratio. |
Section B3-3.8-01 adds a rule that depends on occupancy. For rental income that relates to the principal residence of the borrower, it says this.
The lender must add the monthly positive qualifying rental income to the borrower's total monthly income, and the full amount of the monthly mortgage payment (PITIA) must be included in the borrower's total monthly obligations when calculating the DTI ratio. (The income cannot be netted against the PITIA of the property.)
For a property other than the principal residence, it says this.
When the monthly qualifying rental income minus the full PITIA is positive, the lender must add it to the borrower's total monthly income. When the monthly qualifying rental income minus PITIA is negative, the lender must add the monthly net rental loss to the borrower's total monthly obligations.
B3-3.8-02 applies to two- to four-unit principal residences, to one- to four-unit investment properties and to a one-unit accessory dwelling unit (ADU) with a one-unit primary residence. The amount that this calculator shows is rent × 75% minus PITIA. That is a netted amount, as in the second quote. For rental income that relates to the principal residence of the borrower, the first quote says that the income cannot be netted against the PITIA. In that case, the netted amount on this page is not the amount that the first quote adds to income. This page does not decide which treatment applies to a loan file. The lender decides that.
What PITIA includes
Section B3-6-03 defines the monthly housing expense of the subject property and calls it PITIA. It is the sum of these items.
- principal and interest (P&I)
- property, flood, and mortgage insurance premiums (as applicable)
- real estate taxes
- ground rent
- special assessments
- any owners' association dues (including utility charges that are attributable to the common areas, but excluding any utility charges that apply to the individual unit)
- any monthly co-op corporation fee (less the pro rata share of the master utility charges for servicing individual units that is attributable to the borrower's unit)
- any subordinate financing payments on mortgages secured by the subject property
Enter the sum of the items that apply to the property in the PITIA field.
Where a negative result goes
Section B3-6-02 lists the parts of the total monthly obligation in the debt-to-income (DTI) ratio. One part is any net loss from a rental property
. The same section gives these maximum ratios.
For manually underwritten loans, Fannie Mae's maximum total DTI ratio is 36% of the borrower's stable monthly income. The maximum can be exceeded up to 45% if the borrower meets the credit score and reserve requirements reflected in the Eligibility Matrix.
For loan casefiles underwritten through DU, the maximum allowable DTI ratio is 50%.
The section also lists exceptions to these maximum ratios for some transactions. This calculator does not calculate a DTI ratio.
Limits for an accessory dwelling unit
B3-3.8-02 gives three limits for a property with an ADU.
Rental income is only allowed from one existing ADU.
Purchase or limited cash-out refinance transactions only.
The qualifying rental income amount from the ADU is limited to 30% of the total qualifying income.
ANRI and DSCR are different measures
ANRI is a dollar amount. The rules quoted above tell the lender how to use it. DSCR on this page is a ratio of the property only. It is gross monthly rent divided by monthly PITIA, and it uses 100% of the rent. The Fannie Mae sections in the source list do not use the term DSCR. This page gives no DSCR minimum, because the sources that this page uses do not contain one.
Continue with the DSCR loan calculator, compare a DSCR loan versus conventional financing, or use the DSCR loan down payment calculator.
Primary sources
- Fannie Mae Selling Guide B3-3.8-02, Rental Income from the Subject Property. Date on the section title 09/02/2026. This section has the 75% calculation, the documents, the experience rule and the ADU limits.
- Fannie Mae Selling Guide B3-3.8-01, General Rental Income Information. Date on the section title 09/02/2026. This section has the treatment by occupancy.
- Fannie Mae Selling Guide B3-6-03, Monthly Housing Expense for the Subject Property. Date on the section title 12/16/2020. This section defines PITIA.
- Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios. Date on the section title 04/02/2025. This section has the total monthly obligation and the maximum ratios.
Sources reviewed October 10, 2026. Each guide page showed the label "Published: October 07 2026" on that date. Agency guides change. Follow the current guide and the requirements of the lender for a real application.