Rental income can only be used to offset the mortgage but no additional income from vacated property can be used to qualify

Verification: Rental of the Property Applicant Occupied Prior to the New Loan

Obtain a copy of the rental agreement on the property, if any.

Analysis: Rental of the Property Applicant Occupied Prior to the New Loan

Use the prospective rental income only to offset the mortgage payment on the rental property and only if there is no indication that the property will be difficult to rent. This rental income may not be included in effective income.

Obtain a working knowledge of the local rental market. If there is no lease on the property, but the local rental market is very strong, the lender may still consider the prospective rental income for offset purposes.

Original Question:
We have a borrower that is refinancing his current property out of his VA loan and purchasing another property using his restored VA benefits.  Are we able to count the rental income without a signed lease agreement for both loans if get a 1004 with the appraisal?