Keep the Texas House, Rent It, Buy the Next One
Program and regulatory figures verified September 22, 2026. Details change; confirm your scenario with us.
The move that solves the most Texas buy-before-you-sell problems is the one people consider last: do not sell it at all.
Why this works better in Texas than elsewhere
Every other structure on this site runs into the homestead rules sooner or later. Renting does not, because you are not borrowing against the departing house. The 80% ceiling in Article XVI, Section 50(a)(6)(B) simply never applies, and neither does the twelve-day floor or the one-per-year limit. You qualify for the new home on income, and part of that income now comes from the old one.
The state's landlord-tenant posture helps too. Texas has no statewide rent control and no statewide just-cause eviction requirement. Compared with states that have both, a Texas owner keeping a house has materially more control over it.
How the rental income gets counted
Fannie Mae addresses this in B3-3.8-05, restructured effective September 2, 2026 and binding on all applications dated on or after November 1, 2026. Because there is no tax return history showing the property as a rental yet, market rent is established from a complete appraisal including market rents, a Form 1007 comparable rent schedule, or a market analysis supported by at least three comparable rentals. Lease agreements are not permitted for any departing residence.
The lease alone is not enough on its own. For a one-unit property the file also needs a Single-Family Comparable Rent Schedule on Form 1007, which is an appraisal product showing what comparable homes in the area actually rent for. Two-to-four-unit properties use Form 1025. More on that on the Form 1007 page.
Who this suits
- Owners whose house would rent for enough to cover most of its own payment.
- Owners in strong rental submarkets, which in Texas means most of the large metros.
- Owners who are not in a hurry, and who would rather hold an appreciating asset than liquidate it to fund a move.
- Owners whose equity is locked by the 80% ceiling and who therefore cannot bridge anyway.
Who it does not suit
If you need the equity out of the old house to complete the purchase, renting does not release it. If the house would not cover its own costs, you have added a monthly drain rather than income. And if you do not want to be a landlord, that is a perfectly good reason not to be one. We will tell you honestly which side of the line your numbers fall on.
Compare it against the other two structures on the structures page, or start with what it takes to qualify without selling.
Your real estate agent handles the purchase paperwork and the offer itself. We handle the money: what you qualify for, how the equity gets used, and what the payment looks like.
Frequently asked questions
Can I rent my current Texas home and still qualify for a new mortgage?
Yes, though it helps less than most sites suggest. Under Fannie Mae B3-3.8-05 the calculation is gross market rent times 75% less that property's PITIA, and a positive result offsets the departing residence's own payment rather than adding to qualifying income. Market rent must be supported by a Form 1007 or an equivalent analysis; lease agreements are not permitted for any departing residence.
What is Fannie Mae Form 1007?
A Single-Family Comparable Rent Schedule. An appraiser reports what comparable properties nearby actually rent for, which supports the rent figure in your lease. It is required on one-unit properties generating rental income; two-to-four-unit properties use Form 1025 instead.
Does Texas have rent control?
No. Texas has no statewide rent control and no statewide just-cause eviction requirement. That gives an owner keeping a former residence more flexibility than in states with tighter tenant protection regimes, and it is one reason the rental conversion path is used more often here.
Do I need a signed lease before closing on the new house?
The file wants market rent evidence rather than a lease, since lease agreements are not permitted for any departing residence under Fannie Mae B3-3.8-05. Expect a Form 1007 comparable rent schedule or an equivalent market analysis, plus six months of PITIA reserves on the vacated property where property management experience is under 12 months. Both take time, so raise it on a first call rather than three days before closing.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Texas homestead lending rules, property tax treatment, and loan limits change and depend on your facts; your real estate agent handles the purchase paperwork and your CPA or a Texas attorney handles legal and tax questions. Loans are subject to borrower and property qualification.