DSCR Appraisal & Form 1007 Rent Schedule: How Lenders Count Rent
How wholesale DSCR underwriters reconcile Form 1007 and Form 1025 appraisal rent schedules against actual leases, what to do when an appraisal rent comes back low, and pre-appraisal HUD Fair Market Rent (FMR) benchmark tables for Ohio, Texas, Michigan, Colorado, and Wisconsin.
Reviewed by Loan Daddy LLC editorial team · Updated October 2026 (October 21, 2026) · Broker, not lender · Equal Housing Opportunity
What are Appraisal Form 1007 and Form 1025 on a DSCR loan?
Direct answer: Fannie Mae Form 1007 (Single-Family Comparable Rent Schedule) and Form 1025 (Small Residential Income Property Appraisal Report) are standardized appraisal schedules where a state-licensed appraiser analyzes three or more comparable neighborhood rentals to establish the subject property’s monthly fair market rent for DSCR underwriting.
Because DSCR loans qualify the real estate asset on its own cash flow rather than the borrower’s personal tax returns or W-2 wages, the wholesale lender needs an objective, third-party verification of what the property can rent for in the open market. Simply typing an optimistic rent projection into a spreadsheet—or presenting an unverified lease signed the day before application—will not pass institutional underwriting.
When your mortgage broker orders the appraisal through an approved Appraisal Management Company (AMC), the assignment includes two distinct deliverables based on the property’s residential unit count:
- 1-Unit Single-Family Detached, Townhome, or Condominium: The appraiser completes the standard valuation report (Form 1004 for single-family/PUD or Form 1073 for a condominium) plus the Form 1007 Single-Family Comparable Rent Schedule. Form 1007 places the subject property side by side with three leased comparable homes in the immediate market area and adjusts for location, condition, bedroom/bathroom count, square footage, garage/parking, and utility inclusions.
- 2–4 Unit Multifamily (Duplex, Triplex, Fourplex): The appraiser completes Form 1025, which integrates both the market value opinion and a detailed unit-by-unit comparable rent schedule. The appraiser evaluates each unit’s bedroom/bathroom mix and concludes a separate monthly market rent for Unit 1, Unit 2, Unit 3, and Unit 4, which are summed to establish total gross market rent.
Inside the Form 1007 and Form 1025 grids, the appraiser documents six core data points for each comparable rental property: proximity to the subject property, date of lease execution, current monthly contract rent, concessions or utility inclusions paid by the landlord, physical characteristics (gross living area, room count, bedroom count, bathroom count, condition grade, and parking), and net adjusted monthly market rent. If a comparable rental includes landlord-paid water, sewer, trash, or lawn care while your subject property will bill utilities back to the tenant, the appraiser adjusts the comparable downward so the final Form 1007 figure reflects pure, unbundled shelter rent.
Does a DSCR lender use my actual lease rent or the Form 1007 market rent?
Direct answer: On an occupied rental property, standard wholesale DSCR guidelines use the lesser of your actual executed lease rent or the appraiser’s Form 1007/1025 market rent. However, selected wholesale shelves allow higher actual lease rent (up to 110 percent to 120 percent of Form 1007) when you document two to three months of rent receipt.
The “lesser-of” rule catches many investors off guard when they refinance or purchase a tenant-occupied building. Because GetDSCR (a brand of Loan Daddy LLC) is a commercial mortgage broker and not a lender, we match your scenario to the wholesale shelf whose rent-reconciliation rule fits your lease status. Here is how underwriting rules compare across the six most common scenarios:
| Transaction & Occupancy Scenario | Appraisal Form Ordered | How Qualifying Rent Is Calculated | Required Supporting Documentation |
|---|---|---|---|
| Vacant Single-Family Purchase or Refinance | FNMA Form 1004 + Form 1007 Comparable Rent Schedule | 100 percent of Form 1007 market rent on most standard wholesale DSCR shelves (some shelves apply a 90 percent to 95 percent factor if unleased at refinance). | Appraiser Form 1007 rent schedule with 3 comparable rental properties; no executed lease required at closing. |
| Tenant-Occupied Purchase (Lease at or Below 1007 Market Rent) | FNMA Form 1004 + Form 1007 Comparable Rent Schedule | Lesser of the executed lease contract rent or the appraiser Form 1007 market rent conclusion. | Fully executed lease agreement transferring at closing, tenant estoppel or rent roll, and Form 1007. |
| Tenant-Occupied Refinance (Lease Higher Than 1007 Market Rent) | FNMA Form 1004 + Form 1007 Comparable Rent Schedule | Capped at Form 1007 market rent unless borrower documents 2 to 3 months of canceled rent checks/deposits; selected shelves then allow up to 110 percent to 120 percent of Form 1007. | Executed lease plus 2 to 3 consecutive months of bank statements or canceled checks showing actual receipt of the higher lease amount. |
| Month-to-Month Seasoned Tenant Below Market Rent | FNMA Form 1004 + Form 1007 Comparable Rent Schedule | Selected wholesale shelves allow 100 percent of Form 1007 market rent when a legacy lease has converted to month-to-month or borrower signs a lease-turnover addendum. | Original expired lease showing month-to-month holdover terms and appraiser Form 1007 market rent support. |
| 2–4 Unit Small Residential Income Property (Duplex, Triplex, Fourplex) | FNMA Form 1025 Small Residential Income Property Appraisal Report | Sum of qualifying rents across all units: vacant units use Form 1025 market rent; occupied units use lesser of lease or Form 1025 market rent per unit. | Form 1025 unit-by-unit rent schedule, executed leases for occupied units, and current property rent roll. |
| Short-Term / Vacation Rental (Airbnb & VRBO) | Form 1004/1025 + Form 1007 (with STR Addendum or 12-Month Booking Ledger) | Trailing 12-month platform payouts, appraiser STR nightly/seasonal rent schedule, or approved third-party STR data provider (often with a 10 percent to 25 percent expense factor). | 12-month Airbnb/VRBO host payout summary, property management ledger, or approved third-party market projection report. |
Table reflects typical wholesale business-purpose DSCR guidelines as of October 2026. Specific lender overlays vary by program shelf, LTV tier, and credit score.
How is DSCR calculated when a rental property is vacant at closing?
Direct answer: When a rental property is vacant at closing—which is standard on most DSCR purchase loans and post-renovation refinances—wholesale lenders typically use 100 percent of the appraiser’s Form 1007 or Form 1025 market rent conclusion with no signed lease required prior to funding.
This rule is one of the biggest practical advantages of a DSCR loan over commercial bank financing, which frequently demands signed leases and certificates of occupancy before funding. Still, investors should watch for three nuances on vacant files:
- Purchases vs. Refinances of Vacant Rentals: On a purchase, virtually every wholesale DSCR shelf uses 100 percent of Form 1007 market rent on a vacant property without penalty. On a cash-out refinance of a property that is currently vacant, many shelves still use 100 percent of Form 1007 market rent (especially if the property was recently renovated and is actively listed for rent), while a few conservative shelves apply a 5 percent to 10 percent vacancy haircut or trim maximum LTV by 5 percentage points unless a lease is executed before closing.
- Rent-Ready Condition Requirement (C1 to C4): For the appraiser to issue a valid Form 1007 market rent without a “subject-to completion” holdback, the kitchen, bathrooms, flooring, mechanicals, and exterior must be in habitable, turnkey rental condition (Fannie Mae condition ratings C1 through C4).
- Multi-Unit Partial Vacancy: On a 2–4 unit property where two units are leased and one unit is vacant after a turnover upgrade, the underwriter combines the actual lease rents on the occupied units (capped at Form 1025 market rent unless higher receipt is documented) plus 100 percent of the Form 1025 market rent on the vacant unit.
How do appraisals and Form 1007 rent schedules work for short-term rentals?
Direct answer: Standard Form 1007 rent schedules measure 12-month unfurnished lease rates, which often understate the revenue of a furnished vacation rental. For short-term rental DSCR loans, specialized wholesale shelves allow underwriters to qualify using 12-month platform payouts, an appraiser STR addendum, or approved third-party market data projections.
Even when a wholesale lender qualifies your Airbnb or VRBO using nightly revenue projections or trailing host payouts, the AMC will still order Form 1007 alongside the appraisal. Why? Because institutional underwriters look at the Form 1007 long-term rent as the property’s “Plan B” baseline—the fallback cash flow the home could generate if local short-term rental ordinances change or tourism slows down.
- Method 1 · Trailing 12-Month Actual Booking Ledger: Ideal for refinances or acquisitions of seasoned STRs where the seller transfers 12 months of verifiable Airbnb, VRBO, or direct-booking statements.
- Method 2 · Appraiser Form 1007 with STR Nightly/Seasonal Addendum: The appraiser analyzes comparable short-term rentals in the immediate resort or vacation submarket and provides a gross monthly STR revenue figure alongside the standard long-term Form 1007 figure.
- Method 3 · Approved Third-Party Market Revenue Projections: For newly furnished STRs or purchases without prior host history, selected wholesale shelves accept address-level projections from approved industry data platforms (typically applying a 10 percent to 25 percent expense/vacancy adjustment and requiring minimum market-score thresholds).
What can I do if my Form 1007 appraisal rent comes in lower than expected?
Direct answer: If your Form 1007 market rent comes back lower than expected and compresses your DSCR ratio, you have five practical remedies: file a data-backed Reconsideration of Value (ROV), document seasoned higher lease receipts, switch to an interest-only or low-ratio DSCR shelf, shop hazard insurance, or adjust loan-to-value.
A low Form 1007 rent conclusion does not automatically kill a transaction—especially when you work with a mortgage broker who can either challenge omitted comparables or pivot your file to a different wholesale lender without starting from scratch. Review the remediation playbook below:
| Shortfall Scenario | Immediate Underwriting Impact | Practical Investor & Broker Remedy | When to Use This Play |
|---|---|---|---|
| Appraiser missed closer, higher-rent comparable leases in the same subdivision | Form 1007 conclusion lands $150 to $300/month below actual submarket rents, pushing DSCR below 1.00x. | Submit a formal Reconsideration of Value (ROV) / Rent Schedule Appeal through the AMC with 3 to 5 verified MLS or executed neighborhood lease comps within 0.5 to 1.0 miles. | When objective, verifiable closed rental comps of identical bedroom/bathroom count and square footage were omitted. |
| Form 1007 rent is accurate, leaving DSCR between 0.85x and 0.99x | File no longer meets a 1.00x minimum on a standard DSCR shelf at 80 percent LTV. | Pivot the file to an Interest-Only DSCR structure (to lower the monthly payment denominator) or move to a sub-1.00x / Low-Ratio DSCR wholesale shelf. | When the property is in a high-appreciation market and you want to preserve closing timeline without re-negotiating price. |
| Actual executed lease ($2,400) is higher than Form 1007 ($2,150) | Default wholesale rule caps qualifying rent at the lesser of lease or Form 1007 ($2,150) without payment proof. | Provide 2 to 3 months of canceled rent checks or bank deposit receipts + security deposit proof on a wholesale shelf that accepts documented lease rent up to 110 percent to 120 percent of Form 1007. | On refinances or tenant-occupied acquisitions where the current tenant has a documented payment track record. |
| Insurance or property tax estimate inflated the PITIA denominator | Even a solid Form 1007 rent fails 1.00x coverage because an placeholder insurance quote was $120/month too high. | Shop a dedicated DP-3 landlord dwelling policy (adjusting wind/hail deductible within lender limits) or document exact county tax exemptions/assessments. | On every DSCR file where coverage sits near a 1.00x, 1.15x, or 1.25x program threshold. |
| Loan balance is slightly too high for the concluded Form 1007 rent | DSCR sits at 0.97x when the selected wholesale shelf requires 1.00x. | Reduce the loan-to-value by 3 to 5 percentage points (e.g., from 75 percent LTV to 70 percent LTV), shrinking the monthly principal-and-interest payment so DSCR crosses 1.00x. | When the borrower has extra liquid capital and prefers a 1.00x+ standard program structure. |
How can I estimate Form 1007 rent before paying for an appraisal using HUD Fair Market Rents?
Direct answer: Before paying $550 to $900+ for an AMC appraisal, cross-check your neighborhood MLS rental comps against the U.S. Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) schedule for your metro area and bedroom count. HUD FMRs provide a free, government-published 40th-percentile gross rent benchmark.
The tables below present official HUD FY2027 Fair Market Rents (effective October 1, 2026) across 30 major metropolitan areas in Ohio (OH), Texas (TX), Michigan (MI), Colorado (CO), and Wisconsin (WI)—sourced directly from the HUD Office of Policy Development and Research (PD&R) Fair Market Rent dataset (and the HUD FY2027 FMR Schedule PDF).
How to interpret these numbers when modeling a DSCR loan: HUD FMRs measure the 40th percentile of standard-quality gross rents (shelter rent plus standard tenant-paid utilities) across an entire HUD Metro FMR Area (HMFA) or Metropolitan Statistical Area (MSA). A micro-local Form 1007 appraisal in a renovated Class A/B neighborhood will often conclude above the metro-wide 40th-percentile FMR, while an older Class C block or an unrenovated unit may appraise below the metro FMR. All figures below are general market benchmarks for educational pre-screening only—not a loan offer and not an appraisal conclusion.
Ohio (OH) — HUD FY2027 Fair Market Rent Benchmarks by Bedroom Count
Ohio metros feature strong rent-to-price ratios across 2-bedroom and 3-bedroom single-family and duplex inventory, making Form 1007 comparable selection critical when neighborhood blocks vary block-by-block.
| Metro / HUD FMR Area (OH) | Efficiency (0 BR) | 1 Bedroom | 2 Bedrooms | 3 Bedrooms | 4 Bedrooms |
|---|---|---|---|---|---|
| Columbus, OH HMFA | $1,258 | $1,346 | $1,602 | $1,909 | $2,172 |
| Cleveland, OH HMFA | $924 | $1,050 | $1,274 | $1,628 | $1,756 |
| Cincinnati, OH-KY-IN HMFA | $1,052 | $1,128 | $1,442 | $1,897 | $2,141 |
| Dayton-Kettering-Beavercreek, OH MSA | $909 | $1,008 | $1,248 | $1,623 | $1,774 |
| Akron, OH MSA | $886 | $952 | $1,231 | $1,474 | $1,618 |
| Toledo, OH MSA | $822 | $875 | $1,145 | $1,461 | $1,558 |
Texas (TX) — HUD FY2027 Fair Market Rent Benchmarks by Bedroom Count
In Texas metros, higher 3-bedroom and 4-bedroom suburban rents must be weighed against county property tax assessments and wind/hail insurance premiums in the PITIA denominator.
| Metro / HUD FMR Area (TX) | Efficiency (0 BR) | 1 Bedroom | 2 Bedrooms | 3 Bedrooms | 4 Bedrooms |
|---|---|---|---|---|---|
| Dallas, TX HMFA | $1,491 | $1,536 | $1,807 | $2,275 | $2,892 |
| Fort Worth-Arlington, TX HMFA | $1,461 | $1,481 | $1,745 | $2,284 | $2,866 |
| Houston-The Woodlands-Sugar Land, TX HMFA | $1,233 | $1,261 | $1,497 | $2,017 | $2,502 |
| Austin-Round Rock-San Marcos, TX MSA | $1,447 | $1,530 | $1,817 | $2,292 | $2,689 |
| San Antonio-New Braunfels, TX HMFA | $1,099 | $1,229 | $1,441 | $1,864 | $2,163 |
| El Paso, TX HMFA | $798 | $969 | $1,146 | $1,559 | $1,915 |
Michigan (MI) — HUD FY2027 Fair Market Rent Benchmarks by Bedroom Count
Michigan rental markets span high-yield workforce housing in Metro Detroit and Flint to university-driven and medical-corridor rentals in Ann Arbor and Grand Rapids.
| Metro / HUD FMR Area (MI) | Efficiency (0 BR) | 1 Bedroom | 2 Bedrooms | 3 Bedrooms | 4 Bedrooms |
|---|---|---|---|---|---|
| Detroit-Warren-Livonia, MI HMFA | $1,047 | $1,167 | $1,459 | $1,777 | $1,929 |
| Grand Rapids-Wyoming, MI HMFA | $1,306 | $1,365 | $1,630 | $2,113 | $2,417 |
| Ann Arbor, MI MSA | $1,458 | $1,503 | $1,804 | $2,164 | $2,371 |
| Lansing-East Lansing, MI MSA | $1,036 | $1,054 | $1,323 | $1,685 | $1,739 |
| Kalamazoo-Portage, MI MSA | $885 | $1,013 | $1,238 | $1,545 | $1,637 |
| Flint, MI MSA | $792 | $939 | $1,133 | $1,391 | $1,613 |
Colorado (CO) — HUD FY2027 Fair Market Rent Benchmarks by Bedroom Count
Front Range Colorado properties often pair higher acquisition prices with strong 3-bedroom and 4-bedroom Form 1007 rents; ADU and finished-basement bedroom counts should be verified against municipal records before ordering the appraisal.
| Metro / HUD FMR Area (CO) | Efficiency (0 BR) | 1 Bedroom | 2 Bedrooms | 3 Bedrooms | 4 Bedrooms |
|---|---|---|---|---|---|
| Denver-Aurora-Centennial, CO MSA | $1,751 | $1,831 | $2,169 | $2,846 | $3,183 |
| Colorado Springs, CO HMFA | $1,129 | $1,380 | $1,621 | $2,245 | $2,574 |
| Boulder, CO MSA | $1,520 | $1,735 | $2,033 | $2,703 | $3,146 |
| Fort Collins-Loveland, CO MSA | $1,551 | $1,589 | $1,759 | $2,379 | $2,576 |
| Greeley, CO MSA | $1,240 | $1,307 | $1,647 | $2,281 | $2,753 |
| Pueblo, CO MSA | $879 | $978 | $1,263 | $1,611 | $1,891 |
Wisconsin (WI) — HUD FY2027 Fair Market Rent Benchmarks by Bedroom Count
Wisconsin features dense 2–4 unit duplex and triplex stock in Milwaukee, Madison, Green Bay, and Kenosha where Form 1025 unit-by-unit rent schedules drive strong DSCR coverage.
| Metro / HUD FMR Area (WI) | Efficiency (0 BR) | 1 Bedroom | 2 Bedrooms | 3 Bedrooms | 4 Bedrooms |
|---|---|---|---|---|---|
| Milwaukee-Waukesha, WI MSA | $985 | $1,060 | $1,263 | $1,553 | $1,664 |
| Madison, WI HMFA | $1,196 | $1,375 | $1,565 | $2,047 | $2,264 |
| Green Bay, WI HMFA | $979 | $1,028 | $1,287 | $1,697 | $1,765 |
| Kenosha, WI MSA | $1,136 | $1,144 | $1,441 | $1,956 | $2,228 |
| Appleton, WI MSA | $918 | $986 | $1,256 | $1,739 | $1,952 |
| Eau Claire, WI MSA | $1,014 | $1,017 | $1,259 | $1,695 | $1,701 |
Source: U.S. Department of Housing and Urban Development (HUD), Office of Policy Development and Research, FY2027 Fair Market Rents Schedule (effective October 1, 2026). Figures represent metro-level 40th-percentile gross rent benchmarks, not individual property appraisals or loan offers. Explore state availability on our Markets page and test your property’s ratio in the DSCR Calculator.
How do Form 1007 rent schedules change DSCR qualification in real dollar scenarios?
Direct answer: Even a $150 to $250 monthly difference between your lease, the HUD FMR benchmark, and the appraiser’s Form 1007 conclusion can shift a DSCR file across program tiers. Below are three worked examples illustrating exact dollar math with zero interest-rate quotes or offers.
Worked Example 1 · Vacant 3-Bedroom Rental Purchase in Columbus, OH
Scenario: An investor is purchasing a vacant, newly renovated 3-bedroom, 2-bath single-family rental in suburban Columbus, Ohio.
- Pre-Appraisal Benchmark Check: The Columbus, OH HMFA 3-bedroom HUD FY2027 Fair Market Rent benchmark is $1,909 / month. Three closed MLS rental comps within 0.6 miles of the subject property leased over the past 90 days for $2,050, $2,100, and $2,150 per month.
- Appraiser Form 1007 Conclusion: The investor hands the three MLS lease comps to the appraiser at inspection, and Form 1007 concludes a fair market rent of $2,100 / month.
- Hypothetical Monthly PITIA: $1,310 Principal & Interest + $285 Property Taxes + $115 Landlord DP-3 Insurance = $1,710 / month total PITIA.
- Underwritten DSCR: Because the property is vacant at purchase, the wholesale lender uses 100 percent of the Form 1007 rent:
$2,100 ÷ $1,710 = 1.23x DSCR.
Takeaway: Even if the appraiser had conservatively concluded the metro HUD FMR baseline of $1,909, the property still would have covered at $1,909 ÷ $1,710 = 1.12x DSCR—giving the investor a built-in safety margin before paying for the appraisal.
Worked Example 2 · Occupied Cash-Out Refinance in Dallas, TX (Above-Market Lease Documentation)
Scenario: A landlord is executing a DSCR cash-out refinance on a 4-bedroom single-family rental in the Dallas, TX HMFA (where the 4-bedroom HUD FY2027 FMR benchmark is $2,892 / month). The tenant signed a 12-month lease six months ago at $3,100 / month.
- Appraiser Form 1007 Conclusion: The appraiser’s Form 1007 concludes market rent is $2,850 / month.
- Hypothetical Monthly PITIA: $1,980 P&I + $610 Texas Property Taxes + $230 Landlord Insurance + $30 HOA = $2,850 / month total PITIA.
- Standard Shelf Outcome (Lesser of Lease or 1007): Uses $2,850 →
$2,850 ÷ $2,850 = 1.00x DSCR. - Documented-Receipt Shelf Outcome: By supplying 3 months of bank deposit receipts showing the tenant paying $3,100 per month on time, the broker places the file on a wholesale shelf that credits actual documented lease rent up to 110 percent of Form 1007 →
$3,100 ÷ $2,850 = 1.09x DSCR, unlocking a higher cash-out tier.
Worked Example 3 · Duplex Purchase in Milwaukee, WI (Form 1025 Unit-by-Unit Schedule)
Scenario: An investor purchases a 2-unit duplex (two 2-bedroom units) in the Milwaukee-Waukesha, WI MSA (where the 2-bedroom HUD FY2027 FMR benchmark is $1,263 / month per unit).
- Unit 1 (Occupied): Leased at $1,250 / month; appraiser Form 1025 supports $1,325 / month market rent. Underwriter uses the lesser of lease or market: $1,250 / month.
- Unit 2 (Vacant, Renovated): Appraiser Form 1025 supports $1,350 / month market rent. Underwriter uses 100 percent of market rent on the vacant unit: $1,350 / month.
- Total Qualifying Gross Rent:
$1,250 + $1,350 = $2,600 / month. - Hypothetical Monthly PITIA: $1,540 P&I + $430 Property Taxes + $155 Multi-Unit Insurance = $2,125 / month →
$2,600 ÷ $2,125 = 1.22x DSCR.
All figures in the worked examples above are purely hypothetical dollar illustrations to demonstrate DSCR underwriting math. They are not interest rate quotes, loan offers, or commitments to lend.
Want a broker to benchmark your property’s DSCR rent before you order an appraisal?
Direct answer: Share your property state, unit count, loan purpose, and estimated value below to have a licensed commercial mortgage broker at Loan Daddy LLC review your expected Form 1007 or Form 1025 rent against wholesale lender rules—before you spend a dollar on appraisal fees.
What are the most common questions about DSCR appraisals and Form 1007 rent schedules?
Direct answer: Below are clear answers to the eight most common questions real estate investors ask about Form 1007 and Form 1025 rent schedules, AMC appraisal ordering rules, HUD Fair Market Rent comparisons, short-term rental addenda, and how to prepare comparable leases for the appraiser.
What is the difference between Form 1007 and Form 1025 on a DSCR appraisal?
Fannie Mae Form 1007 (Single-Family Comparable Rent Schedule) is an addendum attached to a single-family (Form 1004) or condominium (Form 1073) appraisal that estimates monthly fair market rent for a 1-unit property. Fannie Mae Form 1025 (Small Residential Income Property Appraisal Report) is the standalone appraisal and unit-by-unit rent schedule used for 2–4 unit properties (duplexes, triplexes, and fourplexes).
Can I order my own Form 1007 rent schedule directly from an appraiser?
No. For underwriting compliance and appraisal independence rules, wholesale DSCR lenders require the appraisal and Form 1007/1025 rent schedule to be ordered through an approved Appraisal Management Company (AMC). However, if you already have a recent AMC-ordered appraisal from another lender, many wholesale shelves allow an appraisal transfer.
Does the appraiser include utilities in the Form 1007 market rent estimate?
On Form 1007, the appraiser compares the subject property against three comparable rentals and adjusts for whether landlord or tenant pays utilities, appliances, pool maintenance, or furniture. DSCR underwriters use the net unadjusted base market rent assuming standard long-term unfurnished occupancy.
How does HUD Fair Market Rent (FMR) compare to a Form 1007 appraisal rent?
HUD Fair Market Rents represent the 40th percentile of gross rents (including standard utility allowances) across a metropolitan statistical area or county, published annually by HUD. A Form 1007 rent schedule is micro-local—using three comparable leases within the immediate neighborhood—and reflects unbundled contract rent. HUD FMR is a free pre-appraisal sanity check, not a substitute for Form 1007.
What happens if I am buying a property to run as an Airbnb, but the appraiser only writes long-term rent on Form 1007?
If you apply on a standard long-term rental DSCR shelf, the underwriter will only use the long-term Form 1007 rent. To qualify on higher short-term rental income, your broker must place the loan on a dedicated Short-Term Rental DSCR shelf that accepts either an appraiser STR nightly/seasonal addendum, a 12-month Airbnb/VRBO payout history, or an approved third-party STR market projection.
Can the listing agent or borrower give rental comps to the appraiser during the inspection?
Yes. Providing the appraiser at the property inspection with a printed packet of 3 to 5 recent, verifiable neighborhood lease comparables (with addresses, lease dates, square footage, bedroom/bath counts, and photos of recent renovations) is allowed and is one of the best ways to prevent an inaccurate Form 1007 rent schedule.
How long is a DSCR appraisal and Form 1007 rent schedule valid?
Most wholesale DSCR lenders treat an appraisal and its Form 1007 or Form 1025 rent schedule as valid for 120 days from the inspection date (and up to 180 days with a recertification of value), after which a new appraisal is required.
Do accessory dwelling units (ADUs) count toward Form 1007 rent on a DSCR loan?
Yes, on wholesale shelves that permit properties with a legally permitted ADU, the appraiser can provide market rent for both the primary dwelling and the ADU—provided local zoning allows both units to be rented and comparable properties with ADUs exist in the market area.
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Reviewed by Loan Daddy LLC editorial team · Updated October 2026. Educational content only, not an offer or commitment to lend. GetDSCR is a brand of Loan Daddy LLC (NMLS #2827624 · Equal Housing Opportunity), a commercial mortgage broker, not a lender. Program guidelines vary by wholesale lender and change over time. Business-purpose loans for non-owner-occupied investment property only; not for personal, family, or household use.