When purchasing a rental or investment property, lenders need more than just your personal income documentation — they want to confirm if the property itself will generate enough rental income to support the mortgage payments. This is the practical role of the Rental Schedule Appraisal Form, also known as Fannie Mae Form 1007.
The form is an appraiser’s professional, unbiased estimate of what the property could realistically rent for in the current market. This appraisal helps lenders determine if rental income can cover part of the mortgage cost, thereby improving your chances of loan approval.
Commonly used for single-family investment homes or 2-4 unit properties where the borrower occupies one unit (often called “house hacking”), the form is a vital underwriting tool. For larger multi-unit properties, appraisers use Form 1025, which builds on the principles of the Form 1007 rental schedule.
During the appraisal, the licensed professional identifies at least three comparable rental properties (“comps”) in the same area, similar in size, condition, and amenities. They analyze differences in features — like garages, renovations, or location advantages — and adjust rent estimates accordingly to derive a fair market rent for your property.
For example, if a comparable rental lacks a feature your property has, such as a garage, the appraiser adjusts the rent value upward to reflect that benefit. This comparative adjustment ensures the final rental value is realistic and data-driven.
Once the market rent estimate is set, lenders typically use 75% of this figure to account for vacancy, maintenance, and management costs when qualifying your income. This approach balances projected earnings with potential expenses.
The form itself is organized clearly for lender review, including sections for subject property details, comparable rental data, adjustment calculations, the appraiser’s final rent opinion, and market condition summaries.
It’s important to understand that the Rental Schedule Appraisal Form provides an estimate, not a guaranteed rent. Also, it’s distinct from the primary appraisal report, which determines the property’s overall value; the rental schedule specifically measures income potential.
For more on related topics, see our articles on Investment Property Mortgage and Income Approach (Appraisal), which detail financing and valuation methods for rental properties.
For official guidelines, Fannie Mae’s Single Family Selling Guide provides comprehensive information on Form 1007 and income assessment: https://selling-guide.fanniemae.com
Understanding this form and appraisal process equips real estate investors to better prepare mortgage applications and work with lenders effectively.