The Quick Read: A Form 1007 estimates what a property would rent for on a monthly lease, while an STR projected income analysis estimates what it could gross on nightly bookings. For an Airbnb-style property, most programs lean on the nightly-basis evidence, with the 1007 serving as a fallback or cross-check, because the two documents measure different things.
- The 1007 values long-term monthly rent. It was not built for nightly rentals.
- An STR analysis comes from an appraiser addendum, a third-party market-data projection, or booking history.
- Short-term rental files on our network typically run up to 75% LTV on a purchase and up to 70% on an STR cash-out or refinance, subject to lender guidelines.
- Expect a 640+ score, about 12 months of hosting experience, and a 1.00 coverage floor on both purchases and refinances.
- Run the ratio under both bases before you choose a path.
The honest answer on who each option is for: the 1007 path suits a conversion or thin-data property where no verifiable nightly history exists yet, or an investor who is happy to qualify on long-term rent. The STR analysis path suits a property that clearly performs as a nightly rental, or a buyer with a credible market-based projection. Neither is “better” in the abstract. The income source can swing the coverage number on the same building, so the choice deserves real thought.
Short-Term Rental Calculator
Run the STR numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your nightly rate, occupancy, taxes, and insurance for a more accurate picture.
Short-term rental income is documented with a 12-month history or a market data report. Program parameters update from Lendmire’s centralized guideline source.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Nightly rate, occupancy, taxes, and insurance are editable estimates. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Side-by-Side
| Factor | Form 1007 (long-term rent) | STR projected income analysis |
|---|---|---|
| What it estimates | Monthly market rent | Nightly-basis gross income |
| Who produces it | Appraiser | Appraiser addendum, market-data report, or host statements |
| Comparable type | Monthly leases | Nightly rentals, occupancy, seasonality |
| Documentation | Appraisal rent schedule | Projection, or about 12 months of history |
| Property types | 1-unit; 2-4 units use Form 1025 | 1-unit and multi-unit, often per-unit support |
| Entity vesting | LLC closings possible | LLC closings possible |
| Reserves | Commonly around 6 months of PITIA | Often similar; varies by lender and leverage |
| Typical weakness | Understates nightly income | Projections get adjusted by the lender |
The reserve row and the entity row both come with qualifiers. Reserves vary by lender, leverage, loan size, and transaction type. LLC-titled closings work depending on program guidelines. This table reflects how files typically structure across the wholesale network, and every file is underwritten individually.
What Form 1007 Actually Measures
The 1007 is a rent schedule. Fannie Mae’s appraiser update on short-term rentals explains that it documents estimated monthly market rent for a single-family investment property and was not designed for properties used as STRs. The form asks for an indicated monthly market rent, so the appraiser must analyze comparable properties leased on a monthly basis.
That is why the common shortcut fails. Taking an Airbnb comparable’s nightly rate and multiplying by 30 is not a valid way to fill in the form, and Fannie Mae says so directly. McKissock, an appraiser-education provider, makes the same point and adds two more. The appraiser values real property only, not furniture or business income. And the final decision about how to count income belongs to the lender, not the appraiser.
One boundary on the agency material: it is cited here only for what the form is. Agency rules do not govern DSCR loans, and nothing about their STR treatment carries over to a DSCR file.
What an STR Projected Income Analysis Measures
An STR projected income analysis is a different animal. Class Valuation, an appraisal management company, describes it as a separately labeled narrative addendum that reports market-supported occupancy along with seasonal or event-driven pricing patterns. It argues that leaning on the 1007 for an STR often produces an artificially low coverage ratio.
Three sources of nightly-basis support show up across the network:
- An appraiser’s STR addendum. Produced alongside the appraisal by an appraiser who understands nightly markets.
- A third-party market-data projection. Typically used on purchases where the property has no operating record.
- Booking history. On an operating property, about 12 months of platform or management statements, matched against bank deposits.
Lenders usually convert the nightly figure to a monthly one and apply an adjustment before running the ratio, reflecting vacancy and operating friction. The adjustment varies by lender, so the same projection can produce different coverage numbers depending on where the file is placed. Brokers who see many guidelines side by side see this variation constantly.
When the 1007 Is the Better Fit
The 1007 path earns its place in a handful of situations.
Conversions and thin-data properties. Picture an investor holding a long-term rental in a small market who plans to start hosting. There is no booking history, and the market-data pool may be thin. Qualifying on long-term rent now, then revisiting the loan once a hosting record exists, can be the cleaner route. Some programs also fall back to the 1007 when STR data is weak.
Properties that rent about as well monthly as nightly. If the nightly premium is modest, the 1007 coverage number may already clear 1.00, and the extra documentation of an STR analysis buys little.
Investors who want long-term optionality. A property that is reviewed on lease or market rent does not depend on hosting performance holding up.
The flip point: if the 1007 number lands under 1.00 on a property that clearly performs as a nightly rental, the 1007 is probably the wrong lens. Coverage of 1.00 is where many select programs start, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. That is an option to weigh, not a reason to stay on a document that understates the asset.
When the STR Analysis Is the Better Fit
Purchases of established vacation or event-driven rentals. A buyer acquiring a property with a strong nightly market usually wants the nightly-basis evidence driving the ratio. A market-data projection or an appraiser addendum can capture seasonality that a monthly lease comparable cannot.
Refinances on seasoned hosts. With about 12 months of documented history, actual statements often carry more weight than a forecast. Lenders generally treat operating history more favorably than a projection, though how history is averaged and adjusted varies by program.
Properties where a gap exists between long-term and nightly income. Consider a scenario where the 1007 produces coverage around 0.85x and the STR basis produces roughly 1.25x on the same building. The 1007 path would push the investor toward lower leverage or a sub-1.00 structure available through select lenders, while the STR path may clear the 1.00 floor directly. Those inputs are modeled assumptions, not market data.
The flip point here: a projection is a forecast, and underwriters discount forecasts. If the data is thin, the property sits in a market with little comparable activity, or local operating rules are uncertain, the STR basis can be weaker than it looks on paper. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Which Document Governs, by Scenario
| Scenario | Usual lead document | Common fallback |
|---|---|---|
| Purchase, no history | Market-data projection or appraiser addendum | 1007 rent |
| Refinance, 12+ months hosted | Booking history | Projection or 1007 |
| Long-term rental converting to STR | 1007 rent initially | STR analysis after history builds |
| 2-4 unit property | Form 1025 rent analysis or per-unit STR support | Varies by program |
Purchase leverage tops out at 75% LTV on STR collateral. STR refinances and cash-outs sit around 70%. Those are separate ceilings from standard long-term rentals, and they come with a 640+ credit expectation. A bigger down payment can lift coverage, but it never erases a leverage cap, credit floor, or reserve rule. The strongest files clear both tests: enough equity and enough rental coverage. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
When the Numbers Disagree
Disagreement between sources is normal. A projection says one thing, the appraiser’s addendum another, and the 1007 a third. If the illustrative calculator on this page shows a long-term rent figure and a higher short-term gross for the same property, that gap is the whole point of this article: the two figures sit on different income bases, and neither is a quote or an underwriting result. A few practical moves help:
1. Ask which figure the specific program counts, and whether it takes the lower of two sources or a single declared basis.
2. Compare the comparables each source used. A projection built on a different bedroom count or amenity profile will diverge.
3. Check whether the gap comes from the lender’s adjustment rather than the underlying data.
4. If the spread is large, consider whether a different program in the network treats the same evidence differently.
Remember what DSCR does and does not measure. It compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow, because repairs, vacancy, management, utilities, and capex sit outside the calculation. That matters more on STRs, where operating costs run heavier than on a long-term lease.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Order of Operations for the Borrower
- Confirm the property can legally operate as a short-term rental before ordering anything.
- Decide whether the property has history or is a new STR.
- Pull the projection or gather statements and matching deposits.
- Tell the appraiser the file needs a nightly-basis analysis, not a multiplied-out 1007.
- Run coverage under both bases and look at the spread.
- For a 2-4 unit building, ask whether the program wants per-unit STR support.
Key Terms Defined
Form 1007: the appraisal rent schedule that estimates monthly market rent for a single-family or condo investment property.
Form 1025: the small residential income report used for 2-4 unit properties, which includes the rent analysis.
STR projected income analysis: a labeled appraiser addendum estimating nightly-basis income from market occupancy and seasonal pricing.
Market-data projection: a third-party estimate of what a property could gross on nightly bookings, usually used on purchases.
Haircut: the adjustment a lender applies to a projection or history to reflect vacancy and operating costs.
PITIA: principal, interest, taxes, insurance, and association dues, the monthly obligation rent is divided by.
Frequently Asked Questions
Can I multiply the nightly rate by 30 and put that on a 1007?
No. Fannie Mae and McKissock both treat that as an incorrect way to complete the form. The 1007 calls for monthly rent supported by monthly lease comparables.
Does the appraiser decide how my STR income counts?
No. The appraiser values the real property and reports the evidence. The lender decides how income is treated and which document drives the ratio. Different programs in the network handle that choice differently.
Which is likely to produce the higher coverage ratio?
On a property that performs well as a nightly rental, the STR basis usually produces the higher number, because long-term rent tends to sit lower. The gap varies by property and market, and lender adjustments narrow it. Running both is the only reliable check.
Does a new STR purchase need booking history?
Programs typically want about 12 months of hosting experience from the borrower, but a purchase with no property history can rely on a projection or appraiser addendum. Refinances lean on documented property history. Details vary by lender guidelines and credit approval.
Can an LLC hold an STR with a DSCR loan?
Often yes, subject to program eligibility. Entity vesting works on both the 1007 and STR paths. Manufactured homes, log homes, and barndominiums are not offered in these programs regardless of vesting.
The Balanced Verdict
Neither document wins by default. The 1007 is the right tool for long-term rent and a reasonable fallback for conversions and thin-data markets. The STR projected income analysis, or documented booking history, is usually the better lens for a property that earns on nightly bookings. The practical advice is to model both, see how far apart they land, and choose the program that matches the evidence you can actually document.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. The complete DSCR loans guide covers the broader program picture. Qualification is subject to lender guidelines, credit approval, and property review. This is not a commitment to lend. Tax treatment varies; consult a qualified professional.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Appraiser Update, June 2024
2. McKissock, Form 1007 & STR appraisals
3. Class Valuation, 1007 and STRs
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: STR Income vs Long-Term Rent Fallback for a First-Time Airbnb DSCR Buyer · Projected vs History Income for a DSCR Loan on a New-Build STR · Projected STR Income vs Rental History for a Long-Term-to-Airbnb Conversion
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.