Your Utah Home Is Under Contract but Has Not Closed

Key takeaways

Under contract is not the same as closed. Until the sale funds, the departing residence's full PITIA is in your ratio unless a specific documented rule removes it. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Agency financing generally wants evidence the sale will actually fund, which in practice means the executed contract plus the closing disclosure or settlement statement. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Where the two closings cannot be aligned, the answer is a structure rather than a hope. Carrying both payments with a recast afterward is the most predictable of the three. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Utah adds no obstacle to borrowing against the departing home while it is under contract, since the state places no CLTV cap on homestead liens.
Rental conversion is generally off the table once the home is under contract to sell, so the 45% exemption question resolves the other way here.
Jumbo investors set their own rules. Above $832,750 in most Utah counties, some will not release the departing payment before the sale funds at all.

Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated September 25, 2026

A signed contract on your current home is good news and it is not yet a closed sale. Underwriting draws that line firmly, and the plan has to account for it.

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Where underwriting draws the line

A contract is a promise. Funding is an event. The departing residence's payment comes out of your debt-to-income ratio when the file can show the sale is done or documented to the point the guideline accepts, and not before.

The practical consequence is about sequencing. If your purchase closes before your sale funds, you are qualifying while holding two payments regardless of how solid the contract looks. That is a financing problem with financing answers, and it is worth solving on paper before the dates are locked.

What to have ready

The fully executed contract on the departing home.
The closing disclosure or settlement statement once it exists.
Current statements on the departing mortgage, taxes, insurance and any HOA dues, so the PITIA is exact rather than estimated.
Evidence of reserves. This is the lever that most often carries a file through an overlap.

Your agent handles the contract itself and its dates. We work on what the money has to do around it.

Which structure fits this situation

Structure	Fit when under contract
Carry both, recast after	Strong. The sale proceeds become the recast principal reduction, and nothing depends on an investor accepting an offset
Borrow against the departing equity	Workable. The second is repaid from the sale proceeds at closing. Utah places no state cap on the lien
Keep it and rent it	Generally not available. The home is committed to a buyer, so it will not become a tenant's primary residence

Because the rental route is closed off here, Utah's tenant exception in 59-2-103(6)(b)(ii) does not help. The departing home stays vacant through the overlap and does not hold the 45% reduction. Read the exemption page for what that costs.

If you are buying above the conforming limit

Utah's 2026 one-unit limit is $832,750 in 25 of 29 counties, and $1,150,000 in Summit and Wasatch. Above the applicable limit you are on investor guidelines rather than agency ones, and some jumbo investors will not release a departing payment until the sale funds. That makes the reserve conversation the central one. See the jumbo page.

Compare the three routes on the structures page, and if your home is listed rather than under contract, see listed but not sold.

Frequently asked questions

Does a signed contract on my current home remove that payment from my ratio?

Not on its own. Underwriting treats a contract as a promise and funding as the event. The departing residence's full PITIA generally stays in your debt-to-income ratio until the file documents the sale, which in practice means the executed contract plus the closing disclosure or settlement statement.

What if my purchase closes before my sale funds?

Then you are qualifying while holding both payments, and the answer is a structure rather than a timing hope. Carrying both payments and recasting the new loan after the sale is the most predictable route, because it does not depend on an investor accepting a rental offset.

Can I rent out my Utah home if it is already under contract to sell?

Generally no, because the home is committed to a buyer and will not become a tenant's primary residence. That means Utah's exemption-preserving exception in 59-2-103(6)(b)(ii) is not available in this situation, and the departing home holds no 45% reduction while it sits vacant through the overlap.

Will a jumbo lender ignore my departing payment once I am under contract?

Not reliably. The departing-residence rules in Fannie Mae B3-3.8-05 are agency guidelines; jumbo investors set their own and some require the sale to fund before releasing the payment. Above $832,750 in most Utah counties, or $1,150,000 in Summit and Wasatch, plan on reserves carrying the file.

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. Utah's residential exemption is administered county by county under Utah Code 59-2-103.5, and eligibility depends on your facts; your county assessor, your CPA or a Utah attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.