You can finance a new primary residence while converting the other one to a rental, even in the same town, but the documentation requirements are different. Will you need the rental income from the old house to qualify for the new one? as long as you can qualify for a new mortgage on a new home, with whatever expenses are associated with both the new and old property, you'll be okay. There are several ways to document income for a property without a rental history. You can get a lease agreement for the old house, and lenders will give you credit for 75% of the rent as income to you. Or the lender can have an appraiser prepare a rental schedule on the house and use 75% of the potential income for qualifying.