If a borrower receives $1,000 in rental income per month, how much of this income can be used to qualify for a loan?

To determine how much of the rental income can be used to qualify for a loan, lenders typically apply a percentage of the gross rental income to account for vacancies, maintenance, and other expenses associated with rental properties. This is commonly referred to as the "income approach" in mortgage qualification.

In many lending guidelines, only a portion of rental income is considered for debt-to-income calculations. A standard practice is to take 75% of the rental income, which provides a more conservative and realistic assessment of how much income the borrower can count on reliably. In this case, if the borrower receives $1,000 in rental income per month, applying the 75% rule results in $750 being considered for loan qualification purposes.

This calculation acknowledges potential vacancies and upkeep costs that may reduce the actual cash flow. Thus, while the borrower receives $1,000, the amount that can be used to qualify for a loan is $750, making this the correct answer.