The Quick Read: The 1007 rent schedule prices a short-term rental (STR) as if it were leased by the month, so the comps are nearby monthly leases, never nightly booking data, and the appraiser cannot multiply a nightly rate by 30, which makes the 1007 number a fallback or floor while STR income is proven another way. In DSCR files, “the 1007” is industry shorthand for the appraiser’s rent schedule. The form measures a different income stream than the one your STR earns.
- STR comps on a 1007 are long-term monthly leases, not nightly stays.
- Nightly rate times 30 is not market rent, and appraisers cannot use it.
- Your lender, not the appraiser, decides which income number the loan uses.
- A 1007 that understates your STR can make coverage look weaker than the property performs.
- Good preparation, such as operating history, can matter more than the form itself.
What the 1007 Actually Is
The 1007 is a standard appraisal form that documents estimated monthly market rent on a one-unit investment property. The appraiser picks comparable rentals, adjusts them to match your property, and reaches one rent opinion. Underwriting then treats that opinion as gross rental income.
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.
The appraisal on a DSCR file really delivers two opinions. Value sets your loan-to-value ratio (LTV), which is the loan amount divided by the property’s value. Rent sets your debt service coverage ratio (DSCR), which is monthly rent divided by the full monthly housing payment: principal, interest, taxes, insurance, and association dues.
Properties with two to four units use a different report, called Form 1025, where the rent analysis is built into the appraisal. The nightly-rate problem is the same there. No clean authority addresses STR treatment on that form specifically, so ask your lender how it handles one.
The form is a monthly-lease tool by design. Keep that in mind and most of the confusion clears up.
Why Nightly STR Comps Don’t Fit
A nightly booking is a business data point, not a lease. It bundles furniture, services, vacancy risk, and operating costs into one price. The 1007 is built to strip all of that out.
McKissock Learning, an appraiser-education provider, summarizes the practice this way. Appraisers compare three properties on monthly rent. They cannot multiply nightly income by 30, even after deducting expenses. They value the real property only, not furniture, fixtures and equipment (FF&E), and not business income.
| Factor | Monthly lease comp | Nightly STR data point |
|---|---|---|
| Agreement | Signed lease | Platform terms and conditions |
| Furnishings | Not part of rent | Priced into the stay |
| Services | Tenant handles most | Cleaning, supplies, guest support |
| Vacancy | Stable, lease-driven | Seasonal and volatile |
| Operating costs | Owner-paid basics | Heavy, business-style |
An appraisal-management firm, Class Valuation, takes the hardest line. It says the 1007 was built for long-term monthly market rent and cannot support an STR appraisal. It adds that leaning on it can produce an artificially low DSCR when the STR’s real income exceeds long-term rent.
The Agency Contrast
DSCR loans are not agency products, so conventional-loan rules do not govern them. The agency material still matters for one reason: it defines the form and its limits. Fannie Mae’s appraiser update on short-term rentals and Form 1007 says the form documents estimated monthly market rent on a single-family investment property, and that it can also be used for condominium investment properties.
A state-hosted copy of that update adds that the form is required only when rental income is used to qualify on a one-unit investment property. The nightly-rate shortcut is rejected outright. The Appraisal Update podcast quotes the guidance directly: “Form 1007 cannot be used to estimate the nightly fee for an STR.”
Lenders on DSCR files borrow the form because it gives a clean, standardized rent opinion. Borrowing the form does not mean borrowing every rule that came with it. How a lender uses the number is set by that lender’s own program.
How the Appraiser Builds the Number, Step by Step
Here is what actually happens on a furnished, nightly-booked home.
1. Define the subject. The appraiser records size, bedrooms, baths, condition, location, and amenities.
2. Find monthly-lease comps. The appraiser typically pulls three nearby properties that are rented on monthly leases and share or bracket your property’s characteristics.
3. Adjust the comps. The grid corrects for differences such as bath count, square footage, condition, and location. Adjustments are made only for meaningful differences, and the market decides which ones matter. In a suburban planned development, beds and baths drive it. In a condo tower, views and floor level can matter more.
4. Reconcile to one figure. The appraiser lands on a single market-rent opinion and explains the range, vacancy view, and trend in the comments.
5. Report it. The lender gets the rent opinion alongside the value opinion.
Notice what never enters the process. Your furniture, your five-star reviews, and your platform bookings do not raise the 1007 rent. The appraiser values the building and the land as a rental, not your hosting business. Fancy furnishings do not move the form.
A Worked Example, in Ratios Only
These numbers are illustrative, not market data. Suppose you model your STR using nightly rate times 30. On paper, coverage looks like roughly 1.4x. That is the exact shortcut the guidance rejects.
Now suppose the appraiser returns monthly-lease comps that support rent covering the payment at about 0.95x. Same house, same payment, two very different pictures. Neither number is wrong. They measure different things.
If the program you choose relies only on the 1007, you are underwriting at 0.95x. A property that performs well as an STR can look thin on paper. That is the distortion Class Valuation warns about.
From there, a few paths exist, depending on the lender:
- A program that accepts STR operating history may use that income instead of the 1007.
- A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
- A larger down payment lowers the monthly obligation and can lift the ratio, though it never erases credit floors or property eligibility rules.
- Interest-only periods, available through select lenders in the network, can change the payment side of the ratio.
Each of these is reviewed subject to lender guidelines, credit approval, and property review. None is automatic.
Where the Income Number Comes From Instead
Which number the loan uses depends on the program. Across the wholesale network of DSCR lenders Lendmire works with, STR files commonly draw on one or more of these:
- Trailing history. Platform payouts or bank deposits show what the property has actually earned. Many STR programs look for about 12 months of hosting history.
- A third-party projection. A market-analytics report estimates what a comparable home could earn. These reports are projections, and lenders often discount them. They also miss property-specific details like condition and finishes.
- An STR-specific appraiser analysis. Some appraisers add a separate addendum that analyzes the STR market. It sits next to the 1007 and does not replace it.
- The 1007 as a floor or fallback. When STR evidence is thin, the long-term rent can carry the file. It also protects a lender from relying on a projection alone.
Programs commonly use the lower of in-place lease rent and appraiser market rent when a property is leased. When the property is vacant or run as an STR, the rent schedule and the STR evidence play different roles. Ask which applies before you order anything.
The appraiser does not decide which income counts. McKissock’s summary is plain that the lender makes the final income determination. That is the point most STR investors miss.
Where the General Rule Breaks
The rule that STR comps don’t work on the 1007 holds. Here is where it bends.
STR income far above long-term rent. A program that uses only the 1007 may fail the coverage test even though the property performs. Moving to a program that accepts operating history is the usual fix.
A weak STR market. The reverse also happens. If STR projections look thin, the 1007 long-term rent can steady the file. Some investors are surprised to find the plain monthly rent is the better number.
Thin comp markets. Resort and rural areas often have few long-term leases. The appraiser may widen the search radius or use older leases, then explain the choice in the comments. A thin comp set makes the rent opinion less certain, so budget for movement.
No STR data for the appraiser. When STR data is scarce, uncertainty about income lingers until the appraisal is back.
Income treated as business income. Some lenders treat STR income as business income. In that case the 1007 may not be used at all, and the documents requested look different.
Multi-unit STRs. Two-to-four-unit properties use the 1025 format, and the nightly-rate problem follows them there.
Appraisal form standards change over time, and written STR addenda tend to stay important either way. Ask your lender which form and addendum it expects on your file.
What the Network’s STR Programs Typically Look Like
Program parameters below are typical ranges across select lenders in Lendmire’s wholesale network. They are not guarantees, and every file is underwritten individually.
- Purchase leverage: on a short-term-rental purchase, up to 75% LTV on the strongest files.
- Refinance and cash-out leverage: on short-term-rental collateral, a refinance runs around 70% LTV, and a cash-out tops out at 70% LTV. Standard long-term rentals run higher.
- Credit: expect a 640 or better score on STR files.
- Coverage: a 1.00 floor on STR purchases, and a separate 1.00 floor on refinances. 1.00 is where select programs start, not a universal standard.
- Experience: about 12 months of hosting history is typical.
- Loan size: 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.
Clearing 1.00 is not the same as positive cash flow. DSCR compares rent only to the full payment, which lenders call PITIA. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. An STR carries more of those costs than most rentals.
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.
What to Do Before the Appraisal Is Ordered
Preparation matters more here than on a standard rental. A few moves change how the file reads.
Decide which income number you want the lender to use. If your program accepts operating history, bring trailing platform statements and matching bank deposits. That may beat relying on the 1007.
Run your own sanity check. Model coverage twice: once on long-term rent and once on STR income. If the long-term version sits near the floor, expect the appraisal to matter a lot.
Do not model nightly rate times 30. It is the single error the guidance flags by name. Build your projection from realistic occupancy and a discounted nightly rate instead.
Know your fallback. If the 1007 lands low, you have options. Lendmire’s piece DSCR Loan Denied Because The 1007 Rent Schedule Came In Too Low walks through them. For the ordering side, see Lendmire’s explainer The DSCR Appraisal: 1007 Rent Schedules, Comps, and What Gets Ordered.
Ask early which appraiser will be used and whether STR experience is required. The right answer varies by lender, and it is better to learn it before the report arrives. For the full program picture, the complete DSCR loans guide covers the basics.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Key Terms Defined
1007 rent schedule: The appraisal form that documents estimated monthly market rent on a one-unit rental property.
Comp (comparable): A similar nearby property whose rent the appraiser compares to yours.
Adjustment: A change to a comp’s rent to account for differences such as size, baths, or condition.
FF&E: Furniture, fixtures, and equipment. Appraisers do not value these on the 1007.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly housing payment used in the DSCR calculation.
Market rent: The monthly rent the appraiser believes the property would command on a long-term lease.
Frequently Asked Questions
Can I use my Airbnb numbers on a 1007?
No. The form documents monthly lease rent only. Your booking income can support the file through other routes, such as trailing platform or bank-deposit history, if your program accepts them.
Why can’t the appraiser multiply my nightly rate by 30?
A nightly rate includes furniture, services, and business risk that a lease does not. Appraisers value the real estate only, so the shortcut overstates what the property rents for as a long-term lease. The guidance rejects it, even after expenses are deducted.
Does furnishing the property raise my 1007 rent?
No. FF&E is excluded from the real property value, and the comps are monthly leases. Furnishings may help your actual STR income, but that shows up in your operating history, not on the form.
What if there are no long-term comps nearby?
The appraiser widens the search or uses older leases and explains the choice in the comments. Expect more uncertainty in the number. A lender may lean harder on STR operating history in that case, depending on the program.
Who decides which income the loan uses?
The lender does. The appraiser supplies a rent opinion, and the program rules determine whether the loan uses that figure, your STR history, a projection, or the lower of two numbers.
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. It is a broker arranging financing through select lenders in its wholesale network, covering 41 markets, including Washington, D.C. You can reach the team at 828-256-2183. Qualification is subject to lender guidelines and is not a commitment to lend.
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
1. McKissock Learning, Form 1007 and short-term rental appraisals
2. Class Valuation, why the 1007 can’t be used for short-term rentals
3. Fannie Mae, appraiser update on short-term rentals and Form 1007
4. Nevada Real Estate Division, copy of the Fannie Mae short-term rental update
5. The Appraisal Update podcast, Episode 172
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: How Much Rent a Property Needs to Hit a 1.0 or 1.25 DSCR · How to Convert an Advertised DSCR Minimum to True Rent Coverage · How to Meet DSCR Rent Schedule Requirements for a First-Time Rental Buyer
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.