Behind on the Mortgage: Can I Rent the House Out Instead of Selling?

Yes, you can usually rent the house out instead of selling it, but renting only helps if the rent covers the full monthly payment plus everything else the house costs, and it does not by itself fix the months you are already behind. Moving out can also change which protections and programs your servicer must offer you. Run the numbers and ask the servicer three questions in writing before you sign a lease.

Renting is a reasonable plan for some homeowners and the wrong one for others. This page covers the math, the servicer, Florida landlord rules and association limits.

Start with the numbers: rent has to cover more than the mortgage

The rent has to beat the whole cost of owning the house, not just principal and interest. Add up principal, interest, property taxes and insurance (the full payment on your statement), association dues, a repair reserve, and a cushion for months with no tenant. If you have a second mortgage or HELOC, include it.

Then look at the past-due balance separately. Rent pays next month; it does not pay the arrears, late charges, or an escrow shortage already on the account. Those still need a repayment plan, a modification, or another workout.

Two other costs are easy to miss. Tell your insurer the house will be rented and ask in writing whether your current policy still fits. And if you claimed a Florida homestead exemption, renting all or substantially all of the home counts as abandoning the homestead until you move back in; abandonment after January 1 does not cost that year’s exemption unless the home is rented more than 30 days per calendar year for two consecutive years (Fla. Stat. 196.061). Ask the county Property Appraiser what that would do to your tax bill, and see property tax increase in Florida for how the bill is built.

What moving out changes with your servicer

The federal loss mitigation procedures in 12 CFR 1024.41 apply only when the house is your principal residence (12 CFR 1024.30(c)(2)). Those procedures include the rule that a servicer generally cannot make the first foreclosure filing until the loan is more than 120 days delinquent, and the rule against a foreclosure sale while a complete application received more than 37 days before the sale is under review. The CFPB’s official interpretation says those procedures stop applying if the property ceases to be your principal residence, which depends on the facts and Florida law.

The investor’s own program rules still matter, and they differ:

• Fannie Mae. The Flex Modification eligibility table in Servicing Guide D2-3.2-06 does not include an owner-occupancy test and notes the property may be vacant. The $7,500 short sale relocation payment in D2-3.3-01, however, requires that the property was your principal residence at the time of the evaluation notice. Details are on Fannie Mae Flex Modification.
• FHA. HUD may set loss mitigation conditions concerning owner-occupancy (24 CFR 203.501). HUD’s rules also let a servicer skip the usual foreclosure delay when the home is not your principal residence, is occupied by rent-paying tenants, and the rent is not being applied to the mortgage (24 CFR 203.606(b)(3)). See FHA loss mitigation options.

Ask the servicer in writing: If I move out and rent the house, which loss mitigation options stay open on my loan? Get the answer before you sign a lease.

Florida landlord basics

Once you rent the house, Florida’s landlord and tenant law, Chapter 83, applies to you. Three rules come up first:

• Security deposit. It must be held in a separate Florida bank account or covered by a surety bond, and you must give the tenant written notice of how it is held within 30 days of receiving it (Fla. Stat. 83.49). After the tenant moves out, you return it within 15 days, or send a written notice of any claim within 30 days (83.49(3)).
• Ending a month-to-month tenancy. Either side must give at least 30 days’ written notice before the end of a monthly period (Fla. Stat. 83.57).
• If a foreclosure happens anyway. The new owner must give a bona fide tenant at least 90 days’ notice to vacate under the federal Protecting Tenants at Foreclosure Act (Pub. L. 111-22, restored in 2018). Florida’s matching statute, 83.5615, takes effect only if the federal act is repealed.

Condo and HOA rental rules

Your association may limit rentals, so read the declaration before you advertise. In a condominium, an amendment that prohibits or limits rentals binds only owners who consent to it and owners who take title after it takes effect (Fla. Stat. 718.110(13)). In an HOA, a governing document or amendment enacted after July 1, 2021 that regulates rentals applies only to later buyers and owners who consent, but an association may still bar leases shorter than six months or more than three rentals a calendar year for everyone (Fla. Stat. 720.306(1)(h)). Rising dues change the math too; see HOA and condo assessment increases.

If the numbers do not work

If rent cannot cover the full cost, the gap comes out of your pocket every month, and a sale while the loan is still manageable leaves more choices open. If you have equity, a regular sale can pay off the loan and the arrears. If you owe more than the house is worth, a short sale needs the lender’s approval, and occupancy can matter for relocation money. Can I sell my house if I’m behind on payments explains both routes, and a free HUD-approved housing counselor can help you compare renting, a workout, and a sale on your actual numbers.

Neither choice is right for everyone. For the document list your loan type requires, run the free file checker, or call 855-725-3898 for the real-estate side.

This page is general information for Florida homeowners and is not legal or tax advice.