The Quick Read: Usually yes for a single-family rental, but no law requires it. The lender sets the rule, and most programs we place files with order a full appraisal that includes a Form 1007 rent schedule, because that form supplies the market-rent number used to calculate coverage. Two- to four-unit properties use a different form, and a few select lenders waive or replace the 1007 with restrictions.
- A 1007 is the appraiser’s opinion of monthly market rent, built from comparable rentals.
- It feeds the coverage ratio: rent used for lender review divided by the full monthly housing obligation (PITIA).
- Duplexes through fourplexes use Form 1025, not the 1007.
- Short-term rentals usually lean on platform income data, though the appraisal is still typically ordered for value.
- Waivers are rare, and they usually mean a lighter valuation method with tighter limits on leverage, property type, and loan size.
What Is a 1007 Rent Schedule, Exactly?
A 1007 is a short form the appraiser completes as an attachment to the appraisal of a single-family investment property. It estimates what the home should rent for on the open market. The form is an agency document, Fannie Mae’s Form 1007 and Freddie Mac’s matching Form 1000, and the form’s own instructions say it exists so a lender can obtain market rent from the appraiser.
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As of Oct 29, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. 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.
Here is the catch most new investors miss. That is a conventional-loan form. DSCR loans are business-purpose investor loans that sit outside those agency rules, so nothing in federal law says a DSCR file must have one. Lenders borrow the form because it is familiar and it works. Convention, not statute.
The layout is simple. The appraiser lists three comparable rentals, with lease dates and monthly rents. Adjustments follow for things like location, age and condition, room count, and living area. A comments box covers the rent range, vacancy, and rent trend. The bottom line is one indicated monthly market rent. The instructions tell the appraiser to adjust only for significant differences, so a clean comp set matters more than a clever one.
Why Most Programs Ask for It
Most programs ask for it because DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. There are no pay stubs to lean on. A third-party opinion of rent gives the lender an independent number it did not get from the borrower.
Across our wholesale network, the appraisal produces two separate numbers, and each does a different job:
- Value sets the leverage cap. On a purchase, most files land at 75%–80% LTV (loan-to-value, the loan as a percentage of the property’s value).
- Market rent sets coverage. DSCR is rent used for lender review divided by PITIA, which stands for principal, interest, taxes, insurance, and association dues.
The smaller of the two limits sets your loan size. That is why a property can appraise at value and still come up short on rent. Taxes and insurance do not shrink when rent does, so a modest rent shortfall can cut the loan amount by a larger percentage than you would expect. In one modeled example, a 10% rent shortfall trimmed the loan by roughly 13% when rent was the binding limit. That is a hypothetical, not a promise. Lendmire’s piece How Much a Lease and Appraiser Rent Gap Changes DSCR Loan Size walks through the logic.
Coverage of 1.00 is where select programs start. Stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
Which Form Applies to Your Property?
The form depends on what you own. Fannie Mae’s appraisal report forms list shows the 1004 for one-unit properties and the 1025 for two to four units. DSCR appraisals borrow those same report formats.
| Property or situation | Primary rent evidence | Form involved |
|---|---|---|
| Single-family, vacant | Appraiser’s market rent | 1004 plus 1007 |
| Single-family, leased | Lower of lease or market rent (typical) | 1004 plus 1007 |
| Duplex to fourplex | Unit-by-unit rent analysis | 1025, no 1007 |
| Condo | Market rent from the appraiser | Unit report plus 1007 |
| Short-term rental | Platform projection or hosting history | Appraisal for value; 1007 is monthly rent only |
Some investors also want Form 216, an operating income statement, on income-producing properties. That depends on property type and the lender’s investor. A lease alone almost never replaces the appraiser’s number on a one-unit home.
Lease vs. 1007: Which Number Counts?
On most files, the lower of the signed lease and the appraiser’s market rent counts. A vacant property uses market rent alone. The lower-of treatment is a lender and program convention, not a federal rule, and a few lenders handle it differently.
Why the conservative figure? A lease above market may not survive the next tenant, so it earns you nothing extra. A lease below market can hold your ratio down. The 1007 rent gets the final word more often than investors expect.
| Scenario | What typically counts | Investor takeaway |
|---|---|---|
| Lease above market rent | Market rent (the lower figure) | Extra lease dollars add no coverage |
| Lease below market rent | The lease, on most programs | Fixing the lease may lift the ratio |
| No lease, vacant | Market rent alone | The 1007 is the whole story |
| Month-to-month or newly signed lease | Varies by lender | Ask before ordering the appraisal |
One investor discussion on BiggerPockets about a low rental appraisal shows the gap in action: a signed lease sat well above the 1007 figure, and the thread notes some lenders use only the 1007 while others allow a variance with a current lease. We see the same split across the network. Some programs take the lower figure, some allow the lease to support a higher number, and the strictest overlays want the appraisal rent regardless.
On an occupied refinance, the lease carries more weight because it shows real payment history. The lower-of convention still caps a lease that runs above market.
When a 1007 May Not Be the Deciding Document
Several situations change the answer. Most are exceptions in how the rent is proven, not true escapes from valuation.
Two- to four-unit properties. There is no 1007. The rent analysis lives inside the Form 1025, which includes unit-level rents. If you searched for a 1007 on a fourplex, you asked for the wrong form.
Short-term rentals. The 1007 documents monthly rent from long-term lease comparables, not nightly business income. STR files commonly use an AirDNA-style projection or historical hosting income instead. On our network’s STR programs, expect about 12 months of hosting history and a 640+ credit score, with purchases up to 75% LTV. Cash-out on STR collateral tops out at 70%. 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.
Select-lender waivers. A waiver is sometimes available, rarely, and only through select lenders. It usually means a lighter valuation method, such as an automated model, with limits on leverage, property type, and loan size. It almost never means no valuation at all. Read any “no appraisal” pitch as a different path with different terms, not a free pass.
Vacant or rehab properties. A vacant property depends on market rent alone, so the 1007 stands by itself. A property not yet rent-ready is a lender-by-lender question.
What to Do If the 1007 Comes in Low
Start by figuring out what actually missed. Did value come in low, rent come in low, or both? They are separate problems with separate fixes.
If rent missed, work through these in order:
1. Check the comps for facts. Wrong bedroom count, wrong square footage, or a comp from a different property type can drag the number down.
2. Send better rental comps. Recent, nearby, similar leases give the lender something to weigh in a reconsideration request.
3. Look at the lease. If the lease runs below market, a new lease at a stronger rent may lift coverage on programs that count the lower figure.
4. Adjust the structure. A lower loan amount or more cash down can bring coverage back to the minimum.
5. Try a different program. Guidelines differ across lenders, and a select-lender path below 1.00 coverage exists with leverage and terms adjusted.
One more thing. A larger down payment lowers the monthly obligation and can lift the ratio. It never erases credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
How to Prepare Before the Appraisal
Confirm the lender’s rent basis before anyone orders the report. Ask whether they count the lower of lease and market rent, the appraisal alone, or something else. That one answer changes how you model the deal.
Then model coverage on conservative comps, not on your best-case rent. If your ratio only works at the top of the rent range, treat the file as thin. Give the appraiser access, a list of upgrades, and any recent leases in the area you know about. Facts help. Pressure does not.
On the program side, typical wholesale-network guidance runs roughly like this, subject to lender guidelines and not a commitment to lend: credit around 660 on most programs, with a 620 floor in parts of the network and 700+ unlocking the strongest leverage tiers. Reserves are commonly around 6 months of PITIA, stepping up to about 9 months on loans above $1,500,000. Standard loan sizes run up to $3,000,000.
Be honest about what the ratio means, too. Clearing 1.00 is not positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex all sit outside the calculation. Our complete DSCR loans guide covers how those pieces fit together. DSCR loans are designed for non-owner-occupied investment properties, and because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
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.
Common Misconceptions
“The 1007 is required on every DSCR loan.” No. It is an agency form that investor lenders adopt by convention. No federal rule requires or waives it.
“My signed lease sets the rent.” Usually the lower of the lease and the appraiser’s number counts.
“The lender appraises on actual rent.” The appraiser values the property, and single-family homes are valued mostly by sold comparables. Rent is a separate opinion. A BiggerPockets thread on whether DSCR lenders appraise based on rent makes the same distinction.
“The 1007 works for a duplex.” It does not. Two- to four-unit properties use the 1025.
“The 1007 captures Airbnb income.” It captures monthly market rent, not nightly revenue.
“A waiver means no valuation.” It usually means a lighter method with restrictions.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
DSCR (debt service coverage ratio): qualifying monthly rent divided by the full monthly housing obligation on the property.
PITIA: principal, interest, taxes, insurance, and association dues, the full monthly cost the rent has to cover.
Form 1007: the appraiser’s single-family rent schedule, an opinion of monthly market rent from comparable rentals.
Form 1025: the appraisal report for two- to four-unit properties, with rent analysis built in.
LTV (loan-to-value): the loan amount as a percentage of the property’s appraised value or price.
Market rent: what a property should rent for on the open market, regardless of what the current tenant pays.
Frequently Asked Questions
Can a DSCR loan skip the rent schedule entirely?
Rarely. A few select lenders in the network waive the 1007 or substitute an automated rental estimate, but those paths usually carry limits on leverage, property type, and loan size. Most files still run through a full appraisal with a rent opinion.
Who orders and pays for the 1007?
The lender or its appraisal management company orders it as part of the appraisal, and the borrower usually pays the appraisal cost. Fees vary by property and market, so ask for the cost before the order goes out. The 1007 is typically an attachment, not a separate engagement.
Does a duplex or fourplex need a 1007?
No. Duplexes through fourplexes use the Form 1025, which includes unit-by-unit rent figures. The appraiser builds the income analysis inside that report.
Is the 1007 used for short-term rentals?
Not as the main income proof. The 1007 reflects long-term monthly market rent. Short-term rental files usually rely on a platform-based projection or hosting history, and the appraisal is still typically ordered for value.
Can I challenge a low 1007 number?
Often yes, through a reconsideration request supported by better comparables or corrections to factual errors. Results depend on the lender and the appraiser. Getting a lease in place at a stronger rent can also help on programs that count the lower of the two figures.
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. Reach the team at 828-256-2183 or request a quote.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Freddie Mac Form 1000 / Fannie Mae Form 1007
2. Fannie Mae Selling Guide B4-1.2-01
3. BiggerPockets: DSCR loan low rental appraisal
4. BiggerPockets: Do any DSCR lenders appraise based on rent
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is a 40-Year DSCR Loan Worth It on a Rental? · Can a W-2 Employee Get a DSCR Loan on a Rental? · Can You Use a Like-Kind Exchange With a DSCR Loan?
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.