Income qualification is one of the more nuanced aspects of the Buy Before You Sell process. How both property payments are treated for DTI purposes depends heavily on which program structure is used and what documentation is available.

Scenario 1 — Departing Residence Excluded from DTI

In many BBYS program structures, the departing residence payment is excluded from your DTI calculation entirely. This is typically possible when:

• The BBYS provider has taken a lien or advance position on the departing residence
• A signed listing agreement is in place showing the property is actively for sale
• Sufficient equity exists to cover the outstanding mortgage from sale proceeds

In this scenario, you only need to qualify on the new purchase payment plus your other debts — making the math much more manageable.

Scenario 2 — Both Payments Included in DTI

In some structures, particularly bridge loan arrangements, the lender may require you to qualify carrying both the new mortgage payment and the existing departing residence payment. This is more conservative and requires stronger income to support both obligations simultaneously.

Rental Income Option

If you intend to rent out the departing residence during the transition, documented rental income may offset the payment for DTI purposes. Typically 75% of the monthly rent can be applied as an income offset, subject to documentation requirements.