The Quick Read: The 1007 gives a long-term monthly market rent from comparable leases, while an STR income addendum projects short-term income from nightly pricing and occupancy. Which one sets your qualifying income depends on the program and on whether you are buying or refinancing, because each lender decides which evidence it accepts. Either way, the ratio is the same: income divided by PITIA.
- The 1007 fits long-term rentals and works as a fallback on some STR files.
- The STR addendum fits properties that really operate as short-term rentals.
- STR purchases on select programs reach 75% LTV; STR refinances and cash-outs top out around 70%.
- Expect a 640+ credit score and about 12 months of hosting history on STR files.
- Clearing 1.00 coverage is not the same as positive cash flow. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The short version: a long-term rental investor should lean on the 1007, and a true STR operator should ask early whether a program accepts STR income evidence. A 1007-only read can understate a high-earning vacation property. A projection with no cushion can overstate a fragile one. The decision is about which number is honest for this property.
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
The table below describes how each document works. The right-hand column reflects published industry norms for the STR path, and details vary by program.
| Factor | Form 1007 market rent | STR income addendum |
|---|---|---|
| What it measures | Long-term monthly market rent | Projected short-term income |
| Review basis | Rent comps or a signed lease | Platform history, projection, or appraiser analysis |
| Documentation | Appraiser’s rent schedule | Hosting history, third-party report, addendum |
| Property types | 1-unit (1025 for 2–4 units) | Properties legally operable as STRs |
| Entity vesting | LLC-held, subject to program terms | LLC-held, subject to program terms |
| Timeline | Tied to appraisal order | Tied to appraisal plus extra data |
| Reserve expectations | Vary by lender and leverage | Vary by lender and leverage |
What the 1007 Actually Measures
The 1007 measures what a property should rent for on a long-term lease. Fannie Mae’s forms list names it the Single-Family Comparable Rent Schedule and names Form 1025 as the Small Residential Income Property Appraisal Report. Under Fannie Mae’s appraisal guidance, the 1007 applies to a one-unit investment property and the 1025 covers two to four units. DSCR loans are not agency products. These are simply where the forms come from.
The form assumes stable occupancy and income driven mainly by the real estate. That works for a standard lease. It breaks down for a property run like a small hospitality business.
Why the 1007 Struggles With Short-Term Rentals
Short-term income is driven by nightly pricing, seasonality, events, cleaning and management, and local rules. HousingWire reports that the 1007 was designed only to estimate long-term monthly rent. It says that using it on an STR can produce an artificially low coverage ratio.
Appraisers address this with a labeled narrative addendum. It typically covers market-supported occupancy and seasonal or event-driven pricing patterns. HousingWire also notes that narrative addenda will stay essential as the new UAD 3.6 format retires the legacy forms, including the 1007. The form name may change. The approach is likely to continue.
Here is the catch: this is an appraisal-industry position, not a regulation. DSCR is non-QM, so each program sets its own rules on which income evidence it accepts.
When the 1007 Is the Better Fit
The 1007 is the better fit when the property is a conventional long-term rental or when STR evidence is thin. Across the wholesale network, a rent schedule or a signed lease is the simplest evidence for a standard rental. It usually carries no haircut. The file is easy to read.
It also works as a fallback. Picture an investor buying a lake cabin with no hosting history. If the program cannot credit a projection, the 1007 may be the only workable basis. The coverage ratio will often start lower, but it is a number the lender can underwrite.
Standard rentals can borrow up to 75%–80% on a purchase and around 75% on a cash-out. Credit requirements tend to cluster near 660, with 700+ unlocking the strongest tiers. The 1.00 coverage mark is where select programs start, and stronger ratios open better terms. A larger down payment can lift the ratio, but it does not erase leverage caps, credit floors, or reserve rules.
Choose the 1007 path if:
- The property is a long-term rental or will be leased.
- You lack 12 months of hosting history.
- Short-term rental rules in the area are uncertain.
- You want the cleanest, least-debated number.
When the STR Addendum Is the Better Fit
The STR addendum is the better fit when the property genuinely earns more as a short-term rental and the program accepts that evidence. This is most visible in beach and mountain markets, where STR revenue can far exceed long-term rent. A 1007-only read there can cut loan proceeds even when the property appraises well.
STR evidence comes in several types, and which are accepted depends on the lender and program:
- Trailing platform or bank history, such as payouts, 1099-K statements, or manager reports.
- A third-party projection, such as AirDNA.
- An appraiser’s STR analysis.
- The 1007 as a fallback.
On select programs in the network, STR purchases reach up to 75% LTV, while refinances and cash-outs go up to about 70%. Expect a 640+ credit score and about 12 months of hosting experience. The coverage floor is 1.00 on purchases and refinances. Loan sizes run up to $3,000,000 on standard programs. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
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.
Some published industry material says programs apply a haircut to projected income, and that a refinance usually needs actual history. Those are market descriptions, not network terms. Ask each lender what it credits.
Same Ratio, Different Numerator
Both paths run through one formula. Monthly income divided by PITIA (principal, interest, taxes, insurance, and any association dues) gives the coverage number. Only the income figure changes.
Run the numbers on a modeled property two ways. Suppose the 1007 rent covers the monthly obligation at about 0.9x, while a supported STR figure covers it at about 1.25x. The same property clears or misses 1.00 depending on the evidence. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. It is a different path from a standard 1.00 program, not a lower floor on the same one.
One more point on what the ratio does not say. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside it, and STR operating costs are heavier than most. A strong addendum is not the same as a profitable property.
Which Document Drives Your File?
| Your situation | Likely lead document |
|---|---|
| Long-term lease in place | Lease or 1007 |
| STR purchase, no history | Projection or appraiser analysis, if accepted |
| STR with 12+ months of history | Trailing platform or bank records |
| Refinance of an operating STR | Actual hosting history |
| 2–4 units | 1025 rent analysis, plus STR support per unit if applicable |
The lender decides. Practitioners in a BiggerPockets discussion describe the lender choosing between the 1007, AirDNA, or both. One borrower was told that 12 months of history was needed to use actual rent, and noted they would not know whether the deal met the requirement until the appraisal came back. That uncertainty is real. Asking which evidence a program accepts before ordering the appraisal removes much of it.
Where the projection and the appraiser’s conclusion differ, some programs use the lower figure. A deal that only works at the full projection, with no cushion, is fragile. Stress-test it at the lower number.
Common Mistakes
- Treating the 1007 as the conservative choice for any rental. It is not conservative for an STR. It is the wrong tool.
- Assuming AirDNA equals an appraisal. A projection is not the appraiser’s conclusion.
- Assuming every program accepts STR income. Acceptance is program-specific, and some default to long-term rent.
- Using the 1007 on a 2–4 unit. The agency form for those is the 1025.
- Treating nightly rate times 30 as rent. It ignores vacancy, seasonality, and costs.
Key Terms Defined
Form 1007: The comparable rent schedule an appraiser prepares for a one-unit property to estimate long-term market rent.
Form 1025: The small residential income property appraisal used for two to four units.
STR addendum: A labeled narrative in the appraisal that projects short-term income from market data.
PITIA: Principal, interest, taxes, insurance, and association dues, the monthly obligation in the ratio.
DSCR: The rental income divided by PITIA, reviewed subject to lender guidelines.
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.
Verdict
Neither document is better in the abstract. For a long-term rental, or an STR with no usable history, the 1007 is the cleaner and more defensible number. For an operating STR in a market where short-term income clearly exceeds long-term rent, an STR-capable program that accepts platform history or an appraiser’s analysis usually reflects the property more honestly. The flip point is evidence: with 12 months of hosting records, the STR path is stronger. Without them, the 1007 is the safer bet.
For deeper detail on how the lease and the 1007 interact, see the complete DSCR loans guide for program basics. 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. Qualification is subject to lender guidelines. This is not a commitment to lend. Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can the 1007 be used for a short-term rental?
It can be used as a fallback, but it was built for long-term rent. Class Valuation says it cannot support STR income. On some files the 1007 sets a lower coverage figure than the property actually earns.
Do I need both documents?
Some files carry both. The lender underwrites from whichever evidence its program accepts for your situation. Ask before ordering which one drives the ratio.
Why did my appraised rent come in below my STR income?
The 1007 reflects long-term lease comps, not nightly pricing or seasonal peaks. If the gap is large, supply better comps or hosting history, or ask whether the program accepts platform records.
Does a 2–4 unit need extra STR support?
Often yes. The rent analysis is the 1025, and some programs want separate STR evidence per unit. Confirm with the lender.
Does the addendum guarantee my coverage will clear 1.00?
No. It supports an income figure, and the lender still reviews credit, leverage, reserves, and the property. Clearing 1.00 also does not mean positive cash flow.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage specializing in DSCR investor loans, helping arrange financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 2025 and 2026.
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References
2. Fannie Mae Selling Guide B4-1.2-01
3. HousingWire
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 Loan 30-Year Fixed vs Interest-Only for a Seasonal Market · How to Qualify for a DSCR Loan in Florida · Can You Use a DSCR Loan on a Second Home You Also Rent?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.