The 1007 Rent Schedule: How DSCR Lenders Calculate Market Rent

The 1007 rent schedule is the form your DSCR lender requires to establish market rent on a single-family investment property—and the figure an appraiser writes on it becomes the income side of your debt-service coverage ratio. If that number comes in below your PITIA, no amount of actual lease income will save your qualification. Understanding exactly how appraisers build that number, what they're allowed to rely on, and where the process can produce results that don't reflect reality gives you a real edge before you order the appraisal.

What the 1007 Form Actually Contains — and How Appraisers Fill It Out

Fannie Mae Form 1007—officially the Single Family Comparable Rent Schedule—is a structured grid designed to document the market rent opinion that will underpin your DSCR calculation. The form itself contains five main sections: the subject property details (address, square footage, beds, baths, garage, condition), three comparable rental properties, an adjustments grid, and a reconciled market rent conclusion at the bottom. This is the number your lender will use.

The appraiser's job is to select three closed or active rental comps in the subject's market area—typically within a 1-mile radius in urban markets, or wider in rural ones. These comps must be genuinely comparable: similar property type, condition, and location. The appraiser then makes line-item adjustments for differences in gross living area, bedroom and bathroom count, garage presence or quality, condition, amenities, and lot characteristics. This methodology mirrors a standard sales appraisal, just applied to rental data instead of purchase prices.

The Three-Comp Grid: How Adjustments Work

Each comparable rental property gets its own column on the 1007. The appraiser lists the subject property's features alongside each comp, then adjusts the comp's monthly rent upward or downward to match the subject. If Comp #1 rents for $2,100 per month but is 200 square feet smaller than the subject, the appraiser might add $150 to account for that size difference. If Comp #2 has an extra half-bath, the appraiser might deduct $75. These adjustments are cumulative and cumulative adjustments that exceed 20% of the comp rent are flagged as questionable—though the appraiser can justify them if warranted.

After adjustments, each comp produces an indicated rent figure. The appraiser then reconciles these three adjusted figures into a single monthly market rent opinion. This reconciliation is qualitative, not mechanical. If adjusted rents are $2,850, $2,920, and $2,875, the appraiser might conclude market rent is $2,900, giving weight to the middle values. If one comp is clearly superior, it may receive more weight. The reconciled figure is what appears in the final conclusion line—and it's what your lender plugs into the DSCR formula.

Reconciled Market Rent vs. Actual Lease Rate: Which Number Wins?

Here's a critical distinction that trips up many borrowers: the 1007 produces an appraiser's opinion of what the property should rent for in the open market. But if the property is already leased—or will be leased at closing—at a rate different from that market opinion, DSCR lenders use the lesser of the two figures. If your property has an active lease at $3,200 per month but the 1007 comes in at $2,900, the lender qualifies you on $2,900. Conversely, if you've signed a lease at $2,600 but the 1007 says $2,900, the lender still uses $2,600. This "lesser of" rule protects the lender from over-qualifying on inflated assumptions.

For vacant properties at purchase, the 1007 is the only income evidence available. There is no existing lease to compare. This makes the 1007 even more critical to your deal structure—and also the only income support a lender will accept. You cannot bring in an oral agreement or a future tenant's application. The appraiser's market rent opinion is your qualifying income floor.

How DSCR Lenders Plug the 1007 Into Their Underwriting Formula

The DSCR formula itself is straightforward: Monthly Gross Rent (from the 1007) divided by PITIA (principal, interest, taxes, insurance, and any HOA fees). Most DSCR lenders require a minimum ratio of 1.0 to 1.25 depending on program tier and loan-to-value. A 1.0 DSCR means rent exactly covers the payment. A 1.25 DSCR means rent is 25% higher than the payment, providing a cushion for vacancy or repairs. Specialty DSCR loan programs that accept the 1007 as sole income documentation typically price rates based on where you fall in that range: a 1.0–1.15 ratio may carry a higher rate than a 1.25–1.50 ratio.

The 1007 form itself is ordered as an add-on to the standard URAR appraisal (Form 1004) on single-family properties, or it can be part of a Form 1025 on 2-4 unit income properties. A standalone 1007 add-on typically costs $100 to $200 on top of the base appraisal fee. For appraisers and lenders, the 1007 is not optional in DSCR underwriting—it's the required income documentation format.

The 'Lesser Of' Rule Explained

Understanding the "lesser of" rule is essential to avoiding surprises. Scenario one: you own a property currently leased at $3,500 per month, and the 1007 comes in at $3,200. The lender qualifies you on $3,200, even though you're collecting $3,500. The extra $300 provides additional cash flow but doesn't improve your DSCR qualification. Scenario two: the property is vacant, the 1007 says $2,800, but you've negotiated a lease at $2,650 before closing (rare, but it happens). The lender qualifies you on $2,650. Neither scenario changes the mechanics, but both illustrate why the appraisal must come in strong. A low 1007 will cap your qualifying income regardless of your actual lease.

Vacant Properties: Why the 1007 Is Your Only Income Evidence

On vacant properties, there is no lease history, no tenant in place, and no alternative income documentation the lender will accept. The 1007 becomes the sole income input. This is why ordering the appraisal early on a vacant deal is critical—it gives you time to challenge the number if necessary before you're locked into a closing timeline. A lender will not accept a borrower's own rent estimate, a listing agent's opinion, or a property manager's projection. Only the appraiser's 1007 figure counts.

1007 vs. 1025 vs. 216: Which Form Applies to Your Property?

Not every investment property DSCR deal uses a 1007. The form selection depends on the number of units and the complexity of the income analysis. Form 1007 applies exclusively to single-family (1-unit) investment properties—the most common DSCR scenario. If you're buying a single-family house or a condo as a rental, you'll get a 1007.

Form 1025 (Small Residential Income Property Appraisal Report) is used for 2–4 unit residential income properties. The 1025 is a comprehensive appraisal report that includes its own comparable rent analysis section built directly into the form. Because the rent schedule is integral to the 1025, a separate 1007 is never ordered. If you're financing a duplex, triplex, or fourplex, your appraisal will be a 1025, not a 1004 plus 1007.

Form 216 (Operating Income Statement) is a supplemental form sometimes requested on 1-4 unit income properties to project net operating income by estimating vacancy allowance, management fees, utilities, and repairs. Form 216 goes beyond gross rent and produces a net income figure. However, DSCR lenders rarely require it. Most underwrite to gross rent (the 1007 or 1025 figure) rather than net operating income, because the borrower's actual operating expenses are their own responsibility, not the lender's risk.

The cost structure reflects this hierarchy. A 1007 add-on runs $100–$200. A full 1025 appraisal for a 2-4 unit property is typically $500–$900 as a standalone report. A 216 is a supplemental form and costs $50–$150 if requested, but it's not a standard DSCR requirement.

One critical note: short-term rental (STR) income cannot be supported by a 1007. The form captures long-term market rent only—what an unfurnished property would rent for on an annual or month-to-month lease. If you're buying an Airbnb or VRBO, the 1007 will not include the STR income. That requires different documentation entirely.

Why 1007 Rent Figures Sometimes Come In Low — and What You Can Do

The most common culprit behind a low 1007 is appraiser comp selection. Rental data on the MLS is thinner than sales data. In some markets, active rental listings are sparse, stale, or concentrated in sub-markets that don't truly match the subject property. An appraiser working within a tight geographic area might pull comps that are older, in lower condition, or in neighborhoods with softer rental demand than the subject's actual location—all within the same zip code.

Consider a real scenario from DSCR forums: a single-family property in a strong urban neighborhood appraised for a purchase price of $385,000 in Columbus, Ohio. The loan amount is $308,000 (20% down), interest rate 7.875% on a 30-year fixed DSCR loan. Monthly P&I is $2,231. Taxes, insurance, and HOA total $520 per month. Total PITIA: $2,751. The 1007 rent schedule comes back from the appraiser with a market rent conclusion of $2,900 per month. The property is vacant at purchase, so this is the only income available. DSCR = $2,900 ÷ $2,751 = 1.054—just above the lender's 1.0 minimum but below the 1.25 threshold for best-tier pricing. At a 1.054 ratio, the deal qualifies, but the rate is 25 basis points higher than it would be at 1.25.

The 1007 methodology itself isn't flawed—comparables and adjustments are sound. The problem is the data pool. Rental comps on MLS are often listed by property managers or landlords who may overprice or underprice listings. Stale listings (over 60 days without update) can skew data. And in some markets, the most desirable properties never hit MLS; they're leased off-market to repeat tenants or through word of mouth.

How to Submit a Rent Reconsideration of Value

If your 1007 comes in low, you have a formal recourse: a Reconsideration of Value (ROV) request. The process is straightforward but must follow protocol. You or your agent gather competing rental comp evidence—active leases on similar properties, recent lease agreements, property management rent surveys, or a professional market rent study for the area. You document each comp with details: address, square footage, beds/baths, lease date, monthly rent, and rent per square foot. You submit this to your lender, not directly to the appraiser. The lender sends it through their appraisal management company (AMC) to the original appraiser.

The appraiser then reviews your comps and can choose to revise the market rent conclusion, revise it partially, or stand by the original figure with a written explanation. There is no guarantee of success, but a well-documented ROV with strong competing evidence succeeds more often than a generic objection.

What Counts as Strong Counter-Comp Evidence

The strongest counter-comps are active leases signed within the past 90 days on nearly identical properties in the same neighborhood. If your subject is a 3-bed, 2-bath, 1,400-square-foot single-family home built in 2000 in a specific subdivision, your best comp is another 3-bed, 2-bath, 1,400-square-foot home in the same subdivision leased recently at a higher rate. Second-tier evidence is property management company rent surveys for the specific zip code or neighborhood. Third-tier is a professional market rent study from a commercial real estate firm or appraiser specializing in that market.

Generic sources—Zillow rent estimates, Rent.com aggregates, or national apartment indices—carry minimal weight. Appraisers are trained to weight actual comparable lease data, not algorithmic estimates. If your investor in Columbus challenges the $2,900 market rent with two additional comps showing $3,050 and $3,100, and those comps are recent, verified leases on similar properties in the same area, the appraiser is likely to revise upward. A revised market rent of $3,025 produces a new DSCR of $3,025 ÷ $2,751 = 1.099. Still below 1.25, but higher than 1.054—and that 45-basis-point rate difference across a 30-year loan can save tens of thousands in total interest.

The 1007 and Short-Term Rentals: A Hard Limit You Need to Know

Form 1007 is engineered for long-term market rent. The form and its methodology reflect what a property would rent for on an unfurnished, month-to-month or annual lease basis. This is a hard constraint. If you're buying a property to operate as an Airbnb or VRBO short-term rental, the 1007 will not capture that income stream.

STR income requires a different appraisal approach entirely. Some DSCR lenders and non-QM programs offer specialized STR income documentation: a 12-month historical STR revenue statement (actual bookings and nightly rates) or a market STR revenue projection using tools like AirDNA or Rabbu. These projections typically account for seasonality, booking patterns, and market rates specific to short-term rental demand. But this analysis lives outside the 1007 framework.

Investors in Florida DSCR markets where STR income is common, or in Arizona and other high-STR markets, should confirm with their lender upfront which income approach will be used. The difference between qualifying on long-term market rent and actual STR revenue can be dramatic. A property with long-term market rent of $2,200 per month ($26,400 annually) might generate $60,000 in annual STR revenue. Using the 1007 figure alone leaves significant qualifying income on the table—or, worse, disqualifies the deal entirely if the long-term rent doesn't support the debt service.

A Real DSCR Calculation Using a 1007 Rent Schedule

Let's walk through the Columbus example with complete numbers. Purchase price is $385,000. After a 20% down payment, the loan amount is $308,000. On a 30-year fixed mortgage at 7.875%, monthly principal and interest is $2,231. Property taxes and insurance for the area run $420 per month; HOA fees are $100. Total PITIA is $2,751.

The 1007 comes back with a market rent conclusion of $2,900 per month. The DSCR formula is $2,900 ÷ $2,751 = 1.054. The lender's minimum is 1.0, so the loan qualifies. But a 1.054 DSCR sits in a lower rate tier. Most lenders price best rates at 1.25 or higher. The borrower is quoted a rate of 7.875% at 1.054, but a 1.25 DSCR would qualify for 7.625%—a 25-basis-point improvement.

The borrower and agent submit an ROV with three additional recent lease comps in the same neighborhood. Two comps at $3,050 and $3,100 are recent leases on similar homes. The appraiser revises the market rent to $3,025. New DSCR: $3,025 ÷ $2,751 = 1.099. Still below 1.25, but the lender now quotes 7.75%—10 basis points better than the original offer. Over 30 years on a $308,000 loan, that's not huge, but it's real money. And if the deal had been even tighter, that ROV could have been the difference between qualification and rejection.

Before you order any appraisal, you can run your own DSCR ratio before ordering the appraisal to stress-test your numbers. Plug in your purchase price, down payment, assumed interest rate, taxes, insurance, and HOA. Then estimate what market rent might be in that area. If the resulting DSCR is below 1.0 or only marginally above it, you know appraisal risk is high, and you can either renegotiate price, increase your down payment, or adjust your rate assumptions before committing to the appraisal fee.

Ready to Run Your Numbers?

Plug your property details into the free DSCR Calculator to see if the deal pencils. Truss Financial Group specializes in DSCR and non-QM lending for real estate investors — reach out for a quote tailored to your portfolio.

Frequently Asked Questions

What is a 1007 rent schedule?

Form 1007 — officially the Single Family Comparable Rent Schedule — is a Fannie Mae appraisal form used to determine the market rent for a single-family investment property. A licensed appraiser selects three comparable rental properties, makes adjustments for differences in size, condition, and features, and reconciles those into a single monthly market rent opinion. DSCR lenders use this figure as the income input in their qualification formula.

What is the DSCR for rent?

In a DSCR loan context, 'rent' means the gross monthly market rent established by the 1007 form — not the borrower's personal income. The DSCR ratio is calculated by dividing that monthly rent figure by the property's total monthly PITIA (principal, interest, taxes, insurance, and HOA). A ratio of 1.0 means rent exactly covers the payment; most lenders require at least 1.0 to 1.25 depending on the program.

What is the difference between 1007 and 1025?

Form 1007 is a standalone rent schedule add-on used specifically for single-family (1-unit) investment properties alongside a standard URAR appraisal. Form 1025 is a full appraisal report designed for 2-4 unit residential income properties — it includes its own comparable rent analysis built into the report, so a separate 1007 is not needed. If you're buying a duplex, triplex, or fourplex for a DSCR loan, expect a 1025, not a 1007.

What is the difference between a 1007 and 216?

Form 1007 establishes gross market rent — the top-line monthly income figure an appraiser believes the property can command. Form 216 (Operating Income Statement) goes a step further by projecting net operating income after vacancy allowance, management fees, and maintenance costs. Form 216 is a supplemental form and is rarely required by DSCR lenders, who typically underwrite to gross rent rather than net operating income.

Can I challenge a low 1007 rent figure?

Yes — through a formal Reconsideration of Value (ROV) request submitted to the appraiser via the lender. To succeed, you need documented competing rental comps: active or recently closed leases on comparable properties, property management rent surveys, or a local market rent study. Generic objections without comp evidence are almost never successful. The ROV must go through the lender's appraisal management company (AMC) — borrowers cannot contact the appraiser directly.