The Quick Read: You do not order the appraisal yourself. The lender or its appraisal management company engages the appraiser, and your job is to pay for it, give access to the property, and hand over the right documents. The appraisal sets value, which drives leverage, and the rent schedule sets market rent, which drives the coverage ratio.
- The lender orders it; you pay and cooperate.
- A single-family rental uses the 1007 rent schedule; a 2–4 unit property uses a form with the rent analysis built in.
- The appraiser’s rent opinion, not your pro forma, feeds the coverage ratio.
- Confirm the deal fits a program before the order goes out, because you pay even if the loan dies.
- Programs vary, so the exact treatment depends on the lender and the file.
Most new investors expect to call an appraiser, book a time, and get a number back. That is not how it works on these loans. The order runs through a channel, and the smartest thing you can do is get the file right before it starts.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 29, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
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.
What Do the Appraisal and the 1007 Do on a DSCR File?
The appraisal does two jobs. It sets value, which drives loan-to-value (LTV), the loan as a percentage of what the property is worth. It also sets market rent, which drives the DSCR, the ratio of rent to the full monthly obligation of principal, interest, taxes, insurance, and any HOA dues (PITIA).
Those are two separate tests. On a purchase, most files across our wholesale network land at 75%–80% LTV. The loan is sized on the lower of price or appraised value, so a higher appraisal does not raise your loan. A low one can cut it.
The rent side works the same way. Many programs we place files with start at 1.00 coverage, and stronger ratios open better pricing and leverage. A separate path through select lenders in the network goes below 1.00, with leverage and terms adjusted. Either way, the number that goes into the ratio is the appraiser’s rent opinion, not the figure you hoped for. Our complete DSCR loans guide covers the full qualification picture.
One caution on terms. Clearing 1.00 is not the same as positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside it.
Key Terms Defined
1007 rent schedule: A form where the appraiser lists comparable rentals and gives an opinion of monthly market rent for a single-family property.
1025: The appraisal form for 2–4 unit properties, with the rent analysis built into the report.
AMC (appraisal management company): A middleman that assigns appraisers, tracks the order, reviews quality, and delivers the report. NAR’s issue brief on AMCs notes that AMCs coordinate appraisals but do not perform them.
Market rent: What the appraiser believes the property would rent for today, based on comparable rentals.
In-place rent: What a current tenant actually pays under a lease.
PITIA: Principal, interest, taxes, insurance, and association dues. It is the bottom half of the coverage ratio.
Reconsideration of value: A written request asking the lender to have the appraiser review the report with new evidence.
Which Forms Get Ordered for Which Property?
The form follows the property type. These names come from the agency world, but the DSCR rules come from each investor’s guidelines. Agency guides are useful here only for form names.
| Property | Typical report | Rent opinion |
|---|---|---|
| Single-family | Full interior appraisal | 1007 rent schedule |
| Condo or townhome | Condo or standard form, by property | 1007 rent schedule |
| 2–4 units | 1025 | Built into the report, unit by unit |
| Short-term rental | Same appraisal | Long-term rent only; STR income is documented separately |
Fannie Mae’s Selling Guide names the 1007 as the exhibit for a one-unit investment property using rental income. Freddie Mac’s FAQ pairs it with its own Form 1000. Condo pairings are practitioner convention, and a lender can specify a different set.
Some property types never reach this step. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs.
Who Orders It, and What Do You Control?
The lender orders it, usually through an AMC. Independence is the reason. Regulated institutions are held to appraisal-independence expectations, and non-bank investors follow the same practice as a matter of their own requirements.
| You control | You influence | You can’t control |
|---|---|---|
| Whether to proceed | Access and scheduling | Who the appraiser is |
| Paying the fee | Documents the appraiser sees | The rent opinion |
| Property condition | Timing of the order | Which comps are chosen |
| Lease terms you sign | Evidence in a reconsideration | How the lender weighs the report |
Your broker does not pick the appraiser either. The appraiser does not approve or decline your loan. The lender makes that call after the report comes back.
How to Order It, Step by Step
1. Scenario-check first. Confirm the deal fits a program before anything is ordered. That means credit, leverage, reserves, and property type. Reserves commonly run about 6 months of PITIA across the network, and loans above $1,500,000 typically step up to about 9 months. A failed scenario after the order still costs you the fee.
2. Submit the application and a signed contract (purchase) or a clean property profile (refinance). The order cannot go out without them.
3. Verify the order details. Wrong details mean the wrong form or scope. Check address, unit count, occupancy (vacant or tenanted), transaction type, and the program. A duplex ordered as a single-family wastes time and money.
4. The lender or its AMC engages the appraiser. You do not pick, and neither does your broker. You pay the fee. Dollar amounts vary by property and market, so confirm the figure with your loan team.
5. Coordinate access. The appraiser usually goes inside as well as outside, because condition affects the rent comps. If a tenant lives there, give notice and get cooperation.
6. Hand over the evidence. A lease, a rent roll, a list of recent improvements, and nearby leased comps all help. The appraiser can only weigh what someone supplies.
7. The report goes to the lender. The underwriter reconciles rent and value, finalizes the coverage ratio and LTV, and decides the file.
Timing matters, but this article does not promise a number. The report is on the critical path, so order only after the scenario check, and ask your loan team how it fits the rest of your schedule.
Vacant or Leased: What Changes?
| Item | Vacant property | Leased property |
|---|---|---|
| Rent used | Appraiser’s market rent | Lease compared with market rent |
| Your tasks | Make it rent-ready | Provide lease; coordinate tenant access |
| Risk | Light market rent | Lease above market gets no extra credit |
Many programs count the lower of the lease and market rent. An above-market lease typically earns nothing beyond market. A below-market lease holds the ratio at the lease figure. A month-to-month or expired lease often falls back to market rent.
For a vacant purchase, the appraiser’s number stands alone. That is why condition matters. A property that is not rent-ready invites a lower opinion.
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.
Purchase Versus Refinance
On a purchase, the order follows the executed contract, and the lower-of-price-or-value rule applies. On a refinance, value comes from the appraisal and the leverage ceilings differ. Across most of the network, cash-out tops out around 75% LTV on standard rentals, with about 6 months of seasoning as the common expectation. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
Some programs may lean on a recent appraisal or an automated rent estimate for a refinance. That varies widely, so ask before assuming.
Check the Rent Before You Order
Run a rough test first. The appraiser’s number is built from comparable rentals that match your property type, so a triplex needs comps. Comp-based opinions tend to land realistic but conservative.
Build a cushion into the deal. A property that only clears 1.00 on your hoped-for rent can slide below it on a lighter opinion. A property that clears around 1.2x on a conservative rent has room. Before ordering, you can:
- Confirm the unit is rent-ready.
- Compare any lease against nearby leased comps.
- Assemble a short package of leased comparables.
- Ask your broker whether a sub-1.00 path through select lenders, with leverage and terms adjusted, exists if the rent comes in light.
A larger down payment lowers the payment and can lift the ratio. It does not erase leverage caps, credit floors, reserve rules, or property eligibility. Strong files clear both tests: enough equity and enough rental coverage.
When the Rent or Value Comes in Low
Read the whole report, not just the conclusion. Look at the comps chosen, the adjustments for size, condition, bedrooms, and baths, and whether the comps match your property type.
Then pick a path:
- Request reconsideration. Submit specific, verifiable evidence, such as leased comps the appraiser missed. Opinion and frustration are not persuasive.
- Lease the property at a supportable rent and use the lease as evidence, where the program allows.
- Restructure. Lower leverage, a larger down payment, or a program with a different rent treatment can change the math. Select lenders offer extended terms (40-year) and interest-only periods, and those may help coverage, subject to lender guidelines.
- Move to a sub-1.00 path through select lenders in the network, with leverage and terms adjusted.
If the appraisal comes in below the purchase price, the loan sizes off the lower value. You either bring more cash, renegotiate, or walk, depending on your contract.
Edge Cases Worth Knowing
The form is changing for agency loans. Fannie Mae’s appraiser update says the 1007 is not used under its redesigned appraisal standard. Market rent is developed in a rental section of the new report instead, with a mandate date of Nov. 2, 2026. Those deadlines bind agency-delivered loans. Whether a DSCR investor’s order forms change is up to that investor’s guidelines. The rent opinion itself continues either way.
Short-term rentals. A standard 1007 reflects long-term market rent, not nightly revenue. Short-term rental programs document income separately. On the network, purchases go up to 75% LTV, refinances run around 70%, and cash-out tops out at 70% on short-term-rental collateral. Expect a 640+ score, about 12 months of hosting history, and a 1.00 coverage floor on both purchases and refinances. If the long-term rent comes in light, Lendmire’s walkthrough on saving an STR loan after a low 1007 rent schedule covers the options. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture. 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.
Appraisal waivers. Don’t count on one. On investor loans they are rare.
Five or more units. These move toward commercial underwriting, which looks at net operating income instead of gross rents against the payment.
Common Mistakes
- Ordering before the scenario check, then paying for an appraisal on a deal that cannot work.
- Wrong unit count or occupancy flag on the order.
- Missing the access appointment.
- Assuming a high lease will lift the ratio.
- Expecting a higher appraised value to raise the loan.
- Handing over nothing, then arguing about comps afterward.
- Treating a 1.00 ratio as proof of positive cash flow.
If you are weighing whether this step applies to your file at all, Lendmire has a separate explainer on whether a DSCR loan requires an appraisal and a 1007 rent schedule.
Frequently Asked Questions
Can I order my own appraisal?
No. The lender or its AMC engages the appraiser, and a borrower-picked appraiser compromises independence. You pay the fee and cooperate with access and documents.
Does the appraiser go inside the property?
Usually yes. Condition affects the rent comps, so an interior and exterior look is typical. Plan for tenant notice if the unit is occupied.
Can I submit my own rent estimate instead?
Not as a substitute. You can hand the appraiser a lease and leased comps as evidence, but the opinion is the appraiser’s, and the lender decides how to use it.
Who pays, and what if the loan falls through?
You pay, and the fee is generally not refundable once the work is done. That is why a scenario check comes first.
Does the 1007 work for an Airbnb?
No. It reflects long-term market rent. Short-term rental programs rely on hosting history and separate income documentation, and typically want a 640+ score.
Next Step
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. Programs change, and every file is underwritten individually. This is not a commitment to lend. Tax treatment varies; consult a qualified professional.
About Lendmire
Lendmire, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history, which is a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. NAR Issue Brief on Appraisal Management Companies
2. Fannie Mae Selling Guide B4-1.2-01
3. Freddie Mac UAD and Forms Redesign FAQ
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get a DSCR Loan on a Surfside Beach Rental? · Does a DSCR Loan Need a 1007 Rent Schedule? · Can You Buy a Pittsburgh Rental With a DSCR Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.