Renting Out Your Idaho Home Instead of Selling It
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
This route buys you freedom from the calendar and costs you the exemption. Both halves belong in the decision, and the second one is usually discovered late.
The trade, stated honestly
Keeping the departing home means you are not racing two closing dates. That is genuinely valuable, especially when the sale is uncertain.
What it costs in Idaho is the homeowner's exemption on that property. Idaho Code 63-602G(2)(a) grants the exemption only where the homestead is owner-occupied and used as the primary dwelling place of the owner. Subsection (4)(c) requires the same for the exemption to continue without a new application. There is no tenant or rental carve-out anywhere in the section.
Losing a flat $125,000 of exempt value raises the taxable base on that house, which raises its tax line, which raises its PITIA. And PITIA is the number every subsequent test measures against. Reasoning on the owner-occupancy page.
If you read this advice for Utah, it does not carry
Utah Code 59-2-103(6)(b)(ii) preserves Utah's 45% residential exemption for each residential property that is the primary residence of a tenant, which makes renting the departing home the cheapest Utah structure. Idaho has no counterpart. Same decision, opposite outcome, one state line apart.
The lease will not help your loan either
Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08, ends its documentation section with a flat statement: lease agreements are not permitted for any departing residence.
Acceptable evidence of monthly gross rent is:
- a complete appraisal report that includes market rents, or
- a Single-Family Comparable Rent Schedule, Form 1007, for the occupied unit, or
- market analysis tools such as Zillow, Redfin or the MLS, using at least three comparable rental properties from the same market area, including subdivision or project where possible.
The lender must also document a current housing payment before any of that rental income is usable, and must keep all documentation used to determine market rents in the file.
What the income is worth
Adjusted net rental income is monthly gross rent times 75%, then minus the departing residence's PITIA.
Positive, and it offsets that property's PITIA and stops there. It does not become income you can use to buy more house. Negative, and the shortfall is added to your debt-to-income ratio. So the best available outcome is that the old house stops counting against you.
Idaho's exemption loss works against you inside that same formula, because it raises the PITIA you are subtracting. Run the numbers with the higher tax figure rather than the one on your current bill.
Reserves and the 12-month line
B3-3.8-05 requires six months of reserves covering the vacated property's PITIA when the borrower has less than 12 months of property management experience, in addition to reserves required for multiple financed properties. Most first move-ups have no landlord history, so plan on it.
If the departing home has more than one unit
The lender obtains the most recent year of individual federal income tax returns, IRS Form 1040, to support rental income received for tenant-occupied units. Those units follow the non-subject-property guidance, and the vacancy factor applies only to the unit the borrower occupied.
Compare this against the other two routes on the structures page, or start from the Idaho guide. Rent documentation mechanics are on the Form 1007 page.
Frequently asked questions
Does renting out my Idaho home keep the homeowner's exemption?
No. Idaho Code 63-602G(2)(a) grants the exemption only where the homestead is owner-occupied and used as the primary dwelling place of the owner, and 63-602G(4)(c) repeats that for continuing it. The section has no tenant or rental exception, so the exemption is forfeited.
Can I use a signed lease to document rent on the Idaho home I am leaving?
No. Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026, states that lease agreements are not permitted for any departing residence. Use a complete appraisal including market rents, a Form 1007 rent schedule, or market analysis tools with at least three comparable rentals from the same market area.
How is rental income from a departing residence calculated?
Monthly gross rent times 75% for net rental income, then minus the departing residence's PITIA. A positive result may offset that property's PITIA only. A negative result must be included in the debt-to-income ratio.
Will losing the exemption change how much rental income I can use?
Indirectly, yes, and against you. The offset is gross rent times 75% less the departing residence's PITIA, and taxes are part of PITIA. Forfeiting the flat $125,000 exemption raises that property's tax line and therefore its PITIA, which makes a positive offset harder to reach on the same rent.
How many months of reserves will a first-time landlord need in Idaho?
Six months of reserves covering the vacated property's PITIA, because that applies when the borrower has less than 12 months of property management experience. It is in addition to any reserves required for multiple financed properties.
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. Idaho's homeowner's exemption is administered county by county under Idaho Code 63-602G and 63-703, and eligibility depends on your facts; your county assessor, your CPA or an Idaho attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.