How To Get A Short-term Rental Rent Analysis Included With Your Appraisal — The Quick Read: You don’t get an STR rent analysis included on Form 1007, because Fannie Mae’s own rent-schedule form was built for monthly leases, not nightly bookings. You get it by ordering a separate narrative addendum — often titled “Short-Term Rental Projected Income Analysis” — and spelling that out in the appraisal engagement letter before the appraiser starts work. Get the scope wrong on the front end and the file gets stuck later, either with a rejected form or a lender who can’t use the number.
Key Terms Defined
Form 1007 — the Fannie Mae Single-Family Comparable Rent Schedule, built to estimate long-term monthly market rent on a one-unit property.
Short-Term Rental Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Sep 17, 2026
Prefilled with local estimates — 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 Sep 17, 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.
Form 1025 — the Small Residential Income Appraisal Report, used for 2-4 unit properties instead of Form 1007.
Narrative addendum — a written report the appraiser attaches to the appraisal that develops an income conclusion outside the standard form, used when no GSE form fits the property’s actual use.
Going concern value — the value of a property plus its operating business (furniture, bookings, brand), distinct from the value of the real estate alone.
Highest and best use — the legally permissible, physically possible, and financially feasible use that produces the greatest value for a property; it’s the analysis that decides whether an STR income approach even applies.
FFE — furniture, fixtures, and equipment; the personal property inside an STR that drives nightly income but sits outside the appraised real estate value.
Why Form 1007 Can’t Carry STR Income
Form 1007 was never designed for nightly rentals, and Fannie Mae says so directly. In its own appraiser guidance, Fannie Mae states that whether the 1007 should be used for short-term rentals is a question it hears often, and that the Selling Guide is silent on treating STR income as rental income at all — Fannie Mae’s Appraiser Update walks through why: STRs run on nightly terms-and-conditions agreements, not monthly leases, and often bundle in furniture, housekeeping, or other services a standard lease never touches.
That mismatch isn’t cosmetic. Form 1007 is scoped to real property value only. Personal property — the furniture and fixtures that make a short-term rental sell for a premium — gets excluded. And appraisers filling out a 1007 aren’t in the business of assessing business income at all. That’s a lender underwriting function, not an appraisal form function.
So the fix isn’t a checkbox or a special line on the existing form. It’s a different document entirely.
The Narrative Addendum: What Actually Gets Attached
A compliant STR income analysis is a separate report with its own clear label. It’s usually called “Short-Term Rental Projected Income Analysis.” Appraisers build it alongside the standard appraisal — they don’t staple it into Form 1007 itself. This addendum uses STR-specific data instead of lease comps. That data includes occupancy rates, seasonal pricing swings, and comparable STR listings pulled from platform data. HousingWire says this is standard practice among experienced STR appraisers.
Two things run in parallel on the file. The real estate gets appraised the normal way — sales comparison, cost, and income approaches as applicable to the property type. Then, if the lender wants STR income considered, the narrative addendum runs beside it as its own analytical track. They don’t get blended into one number on one form.
Step 1: The Engagement Letter Sets the Scope
The order form or engagement letter to the appraiser is the actual trigger point. If it doesn’t say STR income will be handled through a narrative addendum, the appraiser may default to Form 1007 — and then either produce a form that can’t legally carry the income, or come back with a form that leaves the income question unanswered.
The fix is simple and happens before the appraisal is even ordered: state plainly, in writing, that STR income will be analyzed through a narrative addendum, not Form 1007. That single sentence in the engagement scope prevents most of the downstream rework.
Step 2: Highest-and-Best-Use Analysis Comes First
Before any income gets developed, the appraiser has to determine what the property’s highest and best use actually is. The Tennessee Department of Commerce and Insurance frames this step as mandatory for any property operating, or capable of operating, as an STR. This decision determines which analytical path applies: the standard long-term rental path, or the going-concern STR path. It also determines which license type and competency level the appraiser needs to even take the assignment.
Skipping this step and jumping straight to nightly-rate comps — without isolating the real estate component from the business component — risks a misleading report and a possible USPAP Competency Rule violation, per the same Tennessee guidance.
Step 3: STR-Specific Comparable Data Replaces Lease Comps
Once the appraiser settles the highest-and-best-use question toward an STR analysis, they pull comparable data from short-term rental platforms instead of the local MLS lease database. AirDNA is the tool most commonly referenced in appraisal trade commentary for this step. Its Rentalizer function searches for comparable properties within a set radius of the subject property. It matches them on bedroom, bathroom, and guest-count configuration, according to AirDNA’s own documentation.
Worth flagging clearly: this output is a market-data projection tool, not a licensed appraisal. It feeds the analysis. It doesn’t replace it.
Step 4: The Math That Gets Files Rejected
Here’s the mistake that shows up across every trade source on this topic: multiplying a nightly rate by 30 to get “monthly rent.” It looks reasonable. It’s wrong, and appraisers who do it produce a number that doesn’t survive review.
The problem is vacancy. A one-unit STR earns zero on the nights it sits empty, and folding that zero into a simple average skews the number badly. The correct approach accounts for occupancy rate, seasonality, and the difference between potential and effective income — not a flat multiplier. Deducting operating expenses from a flawed multiplied figure compounds the error rather than fixing it.
Step 5: What Belongs in a Compliant Addendum
A properly built STR income addendum generally includes:
- The highest-and-best-use conclusion that supports doing an STR analysis at all
- Occupancy-rate data supported by market comps, not guesswork
- Seasonal pricing patterns specific to the subject market
- A set of comparable STR listings, matched on configuration and location
- Clear separation of real property value from FFE and business income
Lenders reviewing the file should weigh STR income against occupancy swings and expense volatility. They shouldn’t treat the topline revenue figure as a stabilized number. 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. An appraiser’s income conclusion says nothing about whether a jurisdiction actually permits the use.
Step 6: The Lender Decides How to Use the Number
Even a perfectly built narrative addendum doesn’t automatically become qualifying income. That call sits with the lender. Under GSE guidance, if a lender treats STR income as business income, the standard business-income underwriting provisions apply and no Form 1007 gets pulled into the picture; if the lender instead treats it as rental income for qualifying purposes, Form 1007 gets required wherever the Selling Guide calls for it. That’s a conforming-loan framework, not how DSCR files work — but it illustrates why the appraiser’s report and the lender’s treatment of it are two separate decisions.
For DSCR-based investment financing, the practical version of this question is simple: does the property’s rental income — long-term or short-term — cover the payment at the coverage level the program requires? That’s a different question than what Fannie Mae’s guides say. It’s worth reading Lendmire’s complete DSCR loans guide to see how property-level income qualification actually works on a business-purpose investor loan.
How This Plays Out on a DSCR File
Across the wholesale network Lendmire works with, short-term rental income on a purchase gets sized off the appraisal’s short-term-rent analysis at roughly 80% of gross. A refinance typically leans on twelve months of the property’s own operating history instead. Most lenders in the network want to see that the borrower has owned an income property for at least twelve months in the last thirty-six before extending STR-specific terms. This isn’t a first-time-landlord product.
Loan sizing on the STR side of the network runs to $2,000,000, with coverage of 1.00 or higher generally required to reach full leverage on that path. Coverage between 0.75 and 0.99 is a real path too, through select programs in the network, capped at that same $2,000,000 ceiling — leverage and terms adjust downward, subject to underwriting, and it isn’t available on the no-ratio track. No-ratio qualification also exists to $2,000,000 through select lenders, generally built around a seven-year clean housing history and no late payments in the last two years, subject to underwriting — no minimum coverage ratio gets published for that path, and it shouldn’t be assumed.
Picture an investor holding an STR that’s cash-flowing well on actual bookings. But the standard long-term-lease appraisal comes in far below what the property earns. Class Valuation documented a 35.9% spread between a STR’s nightly-rate revenue and comparable long-term MLS lease rent in one market example. This shows exactly why a long-term-only appraisal understates earning power on this property type. A well-documented STR income addendum, sized against the network’s 80%-of-gross treatment on a purchase, is the mechanism that lets the loan reflect what the property actually generates — rather than what a monthly-lease comp guesses at.
DSCR files above $3,000,000 step into a separate size ladder within the network, where leverage steps down as the loan gets bigger — 75% through $3,000,000, 65% at the $3,000,000-to-$4,000,000 tier, and 60% on review above that — but the STR-specific income treatment and the $2,000,000 STR loan cap sit below that ladder, not on it.
Files that use the wrong methodology don’t just get delayed. They distort the DSCR number itself. This produces artificially low ratios that don’t reflect actual operating performance. HousingWire flags this risk specifically for non-agency and DSCR lending. The form-misuse problem doesn’t disappear just because the loan isn’t headed to a GSE.
Common Mistakes on These Files
The most frequent error is assuming the 1007 and the narrative addendum are interchangeable — they’re not, and a lender that receives a 1007 with STR income baked in has grounds to reject the file outright. A close second is ordering the appraisal without specifying STR scope in the engagement letter, which leaves the appraiser guessing and often defaults to the wrong form.
Another recurring problem: assuming STR use raises the real estate’s value. It doesn’t. A property has the same real-estate value whether it’s rented nightly or monthly — the usage doesn’t change the underlying valuation, only the income analysis layered on top of it.
Finally, treating AirDNA output as a finished appraisal conclusion rather than input data. It’s a projection tool built from comparable listings, useful for developing an opinion, not a substitute for a licensed appraiser’s judgment.
What’s Changing
UAD 3.6 is set to retire legacy appraisal forms, including Form 1007, replacing them with standardized data structures. Narrative addenda will still carry STR income analysis after that transition — the form retirement doesn’t remove the underlying problem, it just changes the container. Getting the engagement letter language right now is the habit that carries forward regardless of which form version is current.
This article is educational and not legal or tax advice. Anyone relying on an STR income analysis for a specific property or loan decision should consult a qualified appraiser, attorney, or tax professional about their own situation.
Frequently Asked Questions
Can an appraiser just write “STR” on Form 1007 and note a higher rent?
No. Form 1007 is scoped to develop long-term monthly market rent on real property; writing in an STR figure without a supporting narrative addendum misrepresents what the form is certifying and risks a state appraisal board violation.
Does every STR need a going-concern narrative addendum?
Not necessarily — it depends on whether the lender wants STR income used for qualification and what the highest-and-best-use analysis concludes. Some files proceed on standard long-term rent alone if the borrower qualifies without STR income.
What data do appraisers use instead of lease comps for STR analysis?
Platform-based comparable listing data, commonly through tools like AirDNA, matched on bedroom count, bathroom count, guest capacity, and proximity to the subject property, supplemented by occupancy and seasonality research.
Does using a narrative addendum guarantee a lender will accept the STR income?
No — the appraiser’s addendum is one input; the lender still decides how to categorize and weight that income under its own program guidelines, subject to underwriting.
Do DSCR loans require Form 1007 at all?
DSCR programs are business-purpose loans that qualify primarily on property-level rental income covering the payment, subject to lender guidelines — the appraisal and rent-analysis method used depends on the specific program and property, not a fixed conforming-loan form requirement.
If you are buying or refinancing a short-term rental and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property’s income, credit profile, leverage, and investor goals.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
For current guidelines and terms, see Lendmire’s super jumbo DSCR loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage focused on investor financing, arranging DSCR loans in 39 states plus Washington, D.C. — 40 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. 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. HousingWire
3. Tennessee Dept. of Commerce & Insurance FAQ
4. AirDNA Help Center — Rentalizer
5. Class Valuation — Update on Short Term Rentals
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.
