1004 vs 1025 vs 1007 Forms: A Plain-English Guide for DSCR Investors

When comparing 1004 vs 1025 appraisal for a DSCR loan, the difference isn't just form numbers—it's the difference between a lender accepting your income documentation and flagging your file for a re-order. Each form covers a distinct property type, and the presence or absence of a Form 1007 rent schedule determines whether the appraiser's market rent estimate flows into your DSCR calculation at all. Understanding which form applies to your deal before you open escrow can save you a week of delays and prevent costly surprises at the appraisal desk.

The Three Forms at a Glance: What Each One Actually Does

Most investors confuse these three forms as interchangeable paperwork, but they serve different purposes and property types. Here's what you're actually ordering:

• Form 1004 (Uniform Residential Appraisal Report): Used for single-family detached and attached properties (1-unit). Establishes market value only—no rental income analysis unless a Form 1007 is attached.
• Form 1025 (Small Residential Income Property Appraisal Report): Used for 2-to-4 unit residential properties. Includes unit-by-unit rental analysis and comparable rental data built directly into the form.
• Form 1007 (Single-Family Comparable Rent Schedule): A standalone addendum paired with the 1004 to establish market rent for 1-unit investment properties. It is not a standalone appraisal—it requires the 1004 as its foundation.

One source of confusion worth clearing up: Form 1004D is not a primary appraisal type. It's a completion or update report used to add missing information or refresh data on an existing appraisal. Investors often ask for a "1004 update" thinking it refreshes rental figures; it does not.

Form 1004: Value, Not Income

The Form 1004 gives you the property's market value. For a single-family home being used as a rental investment, that value is essential—but it tells you nothing about what the property can rent for. That's why the 1007 exists.

Form 1025: Value and Income Together

The Form 1025 is self-contained. It provides the property's market value and includes a dedicated income section with per-unit rental analysis, vacancy assumptions, and expense estimates. For a duplex, triplex, or fourplex, the 1025 eliminates the need for a separate rent schedule addendum.

Form 1007: The Rent Addendum That Changes Your DSCR

The 1007 supplies the appraiser's certified market rent opinion for a single-family rental. Without it, your lender has no official rent figure to use in the DSCR calculation. Some lenders will fall back to your actual lease, but many non-QM DSCR lenders require the 1007.

How DSCR Lenders Use Each Form to Calculate Qualifying Income

DSCR is calculated as: Gross Rental Income ÷ PITIA (principal, interest, taxes, insurance, association dues). The form you use determines where that rental income number comes from.

On a 1-unit deal, lenders pull the market rent figure from the 1007 rent schedule. The 1004 alone doesn't supply this. If a lender orders a 1004 without a 1007 on a single-family rental investment, there is no appraiser-certified rent figure at underwriting. The file either stalls or the lender uses your lease amount instead—and if market rent is higher than your lease, you lose qualifying upside.

On a 2-to-4 unit deal, lenders pull rental income directly from the 1025's income approach section, which itemizes rent per unit. You don't need a separate 1007 because the 1025 serves that function internally.

Here's a critical detail many posts omit: DSCR lenders use the lesser of appraiser's market rent (from the 1007 or 1025) versus actual lease. If the appraiser says $2,700/month but your lease is $2,350/month, the lender uses $2,350 for DSCR. This protects both parties—it anchors income to a real contract, not pure market opinion.

Why the 1007 Is the Critical Input for SFR DSCR Loans

If you're financing a single-family rental and your lender hasn't explicitly ordered the 1007, you're at risk. The AMC (appraisal management company) does not auto-attach it. Your lender must request it separately. Truss Financial Group, as a DSCR specialist, always confirms which addendum has been ordered before the appraisal is scheduled to avoid mid-process re-orders. It's worth asking any lender if this is their practice.

How the 1025 Embeds Rental Income for Multifamily

The Form 1025 consolidates everything. Its income section shows current contract rents, the appraiser's market rent opinion per unit, vacancy and expense assumptions, and gross rent multiplier (GRM) analysis. For a duplex or triplex, this is your complete rent documentation.

Property Type Decision Tree: Which Form Your Deal Requires

The appraisal form hinges on property type. Here's how to route your deal:

1-unit SFR (detached or attached, non-condo): Form 1004 + Form 1007. Required for DSCR.

2-unit, 3-unit, or 4-unit residential: Form 1025. The 1007 is not separately required because rent analysis is built in.

Condo (1-unit): Form 1073 (Individual Condo Unit Appraisal Report) + Form 1007 for DSCR. This is an important gap that many competitors don't address. Condos can't use the standard 1004 in most lender programs.

ADU / accessory dwelling unit situations: The primary dwelling gets a 1004, but whether the ADU rent is captured depends on lender guidelines. Some lenders require a 1007 that reflects combined market rent; others do not count ADU income at all. This is a grey zone worth clarifying with your lender before ordering the appraisal.

Manufactured homes on permanent foundation: May accept Form 1004C (manufactured home) instead of a standard 1004. This is lender-specific.

5+ unit multifamily: Moves into commercial appraisal territory. The Form 1025 does not apply. DSCR lending generally tops out at 4 units for residential programs.

Short-term rental (STR) properties: The lender still orders 1004 + 1007, but some lenders use STR income data (such as AirDNA) in addition to or instead of the 1007 market rent. Confirm your lender's approach before the appraisal is ordered.

Does a 1025 Appraisal Include a Rent Schedule? (The Answer Isn't Simple)

This is the top question and competitors answer it vaguely. Here's the direct answer: The 1025 includes its own income analysis—current rents, vacancy, market rent per unit—so a separate 1007 is not required and not ordered on 2-to-4 unit deals.

However, the 1025 income section is not identical to the 1007. The 1007 provides comparables for a single-family rental market. The 1025 uses comparable rental properties of similar unit count. The 1025 income section contains: actual contract rents, appraiser's market rent opinion per unit, vacancy and expense assumptions, and gross rent multiplier analysis. All of this feeds directly into your DSCR calculation.

Some lenders request a 1007 alongside a 1025 for a duplex being used as a SFR-equivalent. This is unusual and lender-specific. If your file is a duplex or triplex, the 1025 is self-contained for rent evidence. If it's a SFR, demand that your lender confirm the 1007 is included in the appraisal order.

A Real-Numbers Example: How Form Choice Affects DSCR at Closing

Scenario A — SFR (1004 + 1007): You're buying a single-family rental for $380,000 with 25% down ($95,000). Loan amount is $285,000 at 7.75% on a 30-year fixed. Your PITIA is $2,410/month. The appraiser's 1007 market rent comes in at $2,700/month. Your DSCR is 2,700 ÷ 2,410 = 1.12. Most DSCR programs require a minimum of 1.10, so you qualify.

Now imagine the 1007 is missing and your lender falls back to your actual lease of $2,350/month. Your DSCR becomes 2,350 ÷ 2,410 = 0.97. That's below the 1.0 minimum. The loan does not close. One missing addendum tanked the deal.

Scenario B — Duplex (1025): You're buying a duplex for $520,000 with 25% down ($130,000). Loan amount is $390,000 at 7.875%. Your PITIA is $3,295/month. The 1025 shows Unit A market rent at $1,550 and Unit B at $1,550—combined $3,100. Your DSCR is 3,100 ÷ 3,295 = 0.94. That doesn't qualify on its own.

You confirm your actual leases are $1,650 + $1,650 = $3,300. Your lender uses the lesser of market ($3,100) or actual ($3,300), so market rent applies. You need to either negotiate the purchase price down or bring more down to improve your ratio. With a 32% down payment ($166,400), your loan amount drops to $353,600, PITIA drops to $2,975, and your DSCR improves to 3,100 ÷ 2,975 = 1.04—now you qualify.

Use the free DSCR calculator to model your numbers before the appraisal is ordered. You can run both scenarios and see exactly where you stand.

Common Ordering Mistakes That Delay DSCR Closings

Mistake 1: Assuming the 1007 is automatic. It must be explicitly requested by the lender. AMCs do not auto-attach it.

Mistake 2: Agent orders a 1004 without telling the lender it's a rental investment. No 1007 gets attached, no market rent figure surfaces, and the file stalls at underwriting.

Mistake 3: Using a 1004 for a property with an active ADU or in-law suite. Underwriters may flag the property as requiring 1025 treatment or exclude ADU income entirely.

Mistake 4: Lender orders a 1025 for a property appraisers classify as a large SFR with attached guest quarters. This can trigger a form mismatch and force a re-order.

Mistake 5: Confusing 1004D with a new 1004. Investors sometimes ask for a "1004 update" thinking it refreshes rent figures. It does not.

Before the appraisal is finalized, vet your appraisal before it reaches the underwriter to catch any inconsistencies. A DSCR specialist like Truss Financial Group typically confirms the correct form is in the appraisal order before the AMC engagement is sent—worth asking any lender if this is standard practice for them.

Get Your DSCR Loan Quote

Run the numbers on your next investment property with the free DSCR Calculator. When you are ready to move forward, the team at Truss Financial Group can pull a personalized rate quote and walk you through the program options that fit your scenario.

Frequently Asked Questions

What is the difference between a 1004 and 1025 appraisal?

A Form 1004 is used for single-family (1-unit) properties and establishes market value only — it does not include rental income analysis unless a separate Form 1007 is attached. A Form 1025 is used for 2-to-4-unit residential income properties and includes built-in unit-by-unit rental analysis, making it self-contained for DSCR income documentation. The key practical difference for investors: if you're financing a SFR rental, you need both the 1004 and the 1007; if you're financing a duplex through fourplex, the 1025 covers both value and income.

What type of appraisal is needed for a DSCR loan?

For a single-family rental, DSCR lenders require a Form 1004 paired with a Form 1007 rent schedule — the 1007 is what supplies the appraiser-certified market rent figure used in the DSCR calculation. For a 2-to-4 unit rental property, lenders use a Form 1025, which includes rental income analysis without needing a separate addendum. For condos, the correct form is a 1073 (Individual Condo Unit Appraisal Report) plus a 1007.

What is a Form 1025 appraisal?

Form 1025, officially called the Small Residential Income Property Appraisal Report, is the standard appraisal form for 2-to-4 unit residential properties. Unlike the 1004, it includes a dedicated income section where the appraiser analyzes current contract rents, estimates market rent per unit, applies a vacancy factor, and calculates a gross rent multiplier — all of which feed directly into a DSCR lender's income analysis. It is not used for single-family homes or for properties with five or more units.

Does a 1025 appraisal include a rent schedule?

Yes — the Form 1025 includes its own income and rent analysis section, so a separate Form 1007 is not required or ordered for 2-to-4 unit properties. The 1025's income section provides per-unit market rent opinions supported by comparable rental data, which functions as the equivalent of the 1007 for multifamily deals. A standalone 1007 is only needed when the appraisal form used is a 1004 (SFR) or 1073 (condo).

Does appraisal form 1025 include a rent schedule?

Yes. The Form 1025 has a built-in income analysis that serves the same purpose as a rent schedule — the appraiser provides market rent estimates for each unit, supported by comparable rentals in the area. For DSCR underwriting on a duplex, triplex, or fourplex, the 1025 is the complete document and no additional rent addendum is needed. This is different from single-family rental appraisals, where the 1004 must be supplemented with a separately ordered Form 1007.