Fannie Mae 1037 PDF Details

For many, navigating the intricacies of rental income when applying for a mortgage can seem daunting. The Fannie Mae 1037 form, known as the Rental Income Worksheet for a principal residence or 2- to 4-unit property, offers clarity and guidance for borrowers in this situation. This vital document aids in calculating the monthly qualifying rental income by allowing for the consideration of potential rental earnings from a property. It requires detailed documentation including the address of the principal residence, alongside either Schedule E of the IRS Form 1040 or a lease agreement/Fannie Mae Form 1025 for verification. The process involves a meticulous calculation that begins by determining the property's period of service, followed by a precise method to compute the qualifying rental income through adjustments for various expenses and potential vacancy losses. Furthermore, it delineates ways to incorporate this rental income into the borrower's total qualifying income, thereby impacting the overall debt-to-income ratio—a critical factor in mortgage approval. With this form, borrowers and lenders can transparently assess and articulate the financial viability of including rental income, ensuring a grounded and informed lending decision that adheres rigorously to Fannie Mae's guidelines.

Form NameFannie Mae 1037
Form Length1 pages
Fillable fields0
Avg. time to fill out15 sec
Other namesform 1037, rental income calculation worksheet, fnma 1037, fannie mae rental income calculator

Form Preview Example

Rental Income Worksheet

Principal Residence, 2- to 4-unit Property: Monthly Qualifying Rental Income

Documentation Required:


Address of Principal Residence:





Schedule E (IRS Form 1040) OR






Rental Unit

Rental Unit

Rental Unit

Lease Agreement or Fannie Mae Form 1025








Step 1 When using Schedule E, determine the number of months the property was in service by dividing the Fair Rental Days by 30. If Fair Rental Days are not reported, the property is considered to be in service for 12 months unless there is evidence of a shorter term of service.

Step 1. Result: The number of months the property was in service:





Step 2 Calculate the monthly qualifying rental income using Step 2A: Schedule E OR Step 2B: Lease Agreement or Form 1025.




Step 2 A. Schedule E - Part I










Enter total rents received (from the non-owner-occupied units).










May enter rent from individual unit(s) or combine.


















Subtract total expenses.




















Add back insurance expense.




















Add back mortgage interest paid.




















Add back tax expense.




















Add back homeowners’ association dues.










This expense must be specifically identified on Schedule E in order to add it back.


















Add back depreciation expense or depletion.










Add back any one-time extraordinary expense (e.g., casualty loss). There










must be evidence of the nature of the one-time extraordinary expense.


















Equals adjusted rental income.










Divide by the number of months the property was in service (Step 1 Result).





























Step 2A. Result: Monthly qualifying rental income:




















Step 2 B. Lease Agreement or Fannie Mae Form 1025








This method is used when the transaction is a purchase or the property was acquired subsequent to the most recent tax filing.






Enter gross monthly rent (from the lease agreement) or









market rent (from Form 1025) for the applicable rental unit.










Multiply gross monthly rent or market rent by 75% (.75). The remaining 25%


x .75


x .75





accounts for vacancy loss, maintenance, and management expenses.


x .75
























Equals monthly rental income per unit.









Combine the monthly rental income of all non-owner-occupied rental units









(up to a maximum of 3 rental units since rental income is not eligible on the










unit occupied by the borrower).



















Step 2B. Result: Monthly qualifying rental income:






Step 3. Determine the qualifying impact using the combined result of Step 2A or Step 2B.

3A Add the monthly qualifying rental income to the borrower’s monthly qualifying income.

3B Identify the full amount of the PITIA as the borrower’s primary housing expense and include it in the debt-to-income ratio.

Use proposed PITIA when the subject property; existing PITIA when not the subject property.



DU Data Entry

Monthly Income and Combined Housing Expenses


Mortgage Liabilities








Subject Property

Enter the amount of the monthly qualifying income in


Include as the borrower’s primary housing





“Subject Net Cash.”


expense. For refinance transactions, identify







the mortgage as a subject property lien.











Non-Subject Property

Enter the amount of the monthly qualifying income in “Net


Include as the borrower’s primary housing









Refer to the Rental Income topic in the Selling Guide for additional guidance.

Fannie Mae Form 1037


How to Edit Fannie Mae 1037 Online for Free

The PDF editor helps make filling out files hassle-free. It is really an easy task to modify the [FORMNAME] form. Keep up with the next actions if you wish to do it:

Step 1: First of all, pick the orange "Get form now" button.

Step 2: Now, you can start editing the fannie mae rental income. Our multifunctional toolbar is readily available - add, delete, change, highlight, and do several other commands with the text in the form.

Enter the essential material in every segment to create the PDF fannie mae rental income

fannie mae form 1038 gaps to fill in

In the must be evidence of the nature of, Total A Divide by the number of, Step A Result Monthly qualifying, Result, Step B Lease Agreement or Fannie, Enter gross monthly rent from the, Enter, B Multiply gross monthly rent or, Multiply, accounts for vacancy loss, B Combine the monthly rental, Total, Add, Step B Result Monthly qualifying, and Result box, note down the information you have.

stage 2 to finishing fannie mae form 1038

Step 3: The moment you hit the Done button, the final document is readily transferable to all of your gadgets. Alternatively, you may send it using email.

Step 4: Get duplicates of your form. This can prevent possible future misunderstandings. We cannot look at or reveal your details, for that reason be sure it is safe.

Watch Fannie Mae 1037 Video Instruction

Please rate Fannie Mae 1037

1 Votes
If you believe this page is infringing on your copyright, please familiarize yourself with and follow our DMCA notice and takedown process - click here to proceed .