FHA Expands Income Guidelines to Include Those Sharing Housing Expenses

The Federal Housing Administration (FHA) recently updated its guidelines to include income from boarders or significant others who share your housing expenses. 

These updates aim to expand potential income sources, reduce rental history requirements to 12 months, and increase borrower’s home buying power. 

Updated Guidelines for Qualifying for an FHA Mortgage

Expanded Income Sources: Borrowers can now include income from boarders or significant others who share their housing expenses.

Flexible Documentation: Acceptable income verification includes bank statements, canceled checks, and deposit slips showing rental payments received.

Reduced Rental History Requirement: Only 12 months of rental history is required. 

FHA Issues New Boarder Income Guidelines

In Mortgagee Letter 2025-4, the FHA released revised requirements for documenting and calculating income received from individuals renting space inside a borrower’s home, otherwise known as boarder income. 

Acceptable boarder income documentation includes bank statements, canceled checks, and/or deposit slips showing rental payments received. 

Boarder income is permitted whether the borrower is currently a renter or the homeowner. 

The FHA will also accept rental income history from 2 years to 12 months.  

Borrowers with a 12-month rental history may qualify for an FHA-insured mortgage using boarder income as long as the following is true:

• Income has been received for at least 9 of the most recent 12 months
• Income is currently being received

Additional guidelines include: 

• Boarder income will be averaged over a 12-month period
• Boarder income cannot exceed 30% of the borrower’s total monthly effective income

Ready to Take the Next Step?

If you’re interested in learning more about how these new FHA guidelines can benefit you or someone you know, please don’t hesitate to reach out.

Our team of experts are here to guide you through the process and help you achieve your homeownership goals.