The debtor may need to propose a modified plan that reflects the additional income.

The city's strong rental market driven by a growing population ensures a steady income stream.

Does he have to report the income he received this past year and declare it a rental event though he would like to move back in eventually?

I'm willing to pay $250k for the home, I was hoping they would counter with something near this range, I've read other posts of people having 5 -6 counters back and forth with Fannie before they reduce the price.

We plan to convert the sale proceeds into multiple properties to create passive income. 

It appears they calculate gross ROI based on gross income divided by property price.

High crime + low income = Poor tenants to choose from.  

Don't forget about loss of income/rent...that being said this is a very broad question and I'm not certain if you think you have too much coverage or it costs too much or both...

We aren't necessarily concerned about a monthly profit on our first 10 or so as we are thinking these would be held for at least 10 years.So, a question we have about 2 houses - House # 1-smaller,good area new roof, new window, no basement, no garage, monthly income $140, $6000 left in debt to heloc..........House #2 - larger 4 bed, 2 bath, forclosure, estimated rehab 40k, estimated monthly income zero, zero debt to heloc........ higher value home.  

I am glad you mentioned to lending aspect of not having the W2 income.