Yes, rental income counts toward your DTI, and how it's calculated depends on whether the property has a tax-return track record. For a newly acquired rental without one, lenders work from the lease or an appraiser's market-rent analysis, and under Fannie Mae and FHA guidelines they count 75% of the gross rent, holding back the other 25% for vacancy and maintenance. In practice: if the mortgage payment on the property is $2,000 a month and market rent is also $2,000, only $1,500 counts as offsetting income, so the property shows as a $500 monthly negative and hits your ratios much like a $500 car payment. Flip it around: market rent of $3,000 against that same $2,000 payment gives you $2,250 of usable income, so the $250 that clears the payment gets added to your qualifying income instead. Once the rental has a full year on your Schedule E, lenders switch to your actual tax-return numbers rather than the flat 75%. They start with your net rental income, add back paper and carrying costs like depreciation, mortgage interest, taxes, insurance, and HOA dues (plus any one-time extraordinary expenses), then subtract the full payment. A net positive adds to your income; a net negative counts as a monthly debt. That cuts both ways, and it catches a lot of investors off guard: write off expenses aggressively and the income that qualifies you can come in far below the cash the property actually throws off. Because the exact numbers hinge on your returns and the specific payment, the free Roadmap conversation is where we'd pin down what your real qualifying rental income looks like.