Keep the Texas House, Rent It, Buy the Next One
Program and regulatory figures verified September 17, 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 percent 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 directly in B3-3.1-08. Rental income may be used for a property placed in service during the current calendar year, which is exactly what converting a principal residence to an investment property is. Because there is no tax return history showing the property as a rental yet, a fully executed current lease is used to document the income instead.
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 percent 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?
Often yes. Fannie Mae allows rental income from a principal residence being converted to an investment property, documented with a fully executed current lease and supported by a Form 1007 comparable rent schedule on a one-unit property. That income then helps you qualify for the home you are buying.
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?
Generally the file wants a fully executed current lease to document the income, since there is no rental history on the property yet. Timing matters and it is worth planning early, which is exactly the kind of thing to raise 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.