--- title: "The DSCR Loan Appraisal: How the Rent Schedule Sets Your Ratio" published: 2026-10-07T14:00:00Z updated: 2026-10-07T14:41:36Z author: "Chris Paliska" tags: ["DSCR Loans", "Investment Property Financing", "Underwriting", "Appraisal", "Real Estate Investing", "Investor Loans"] read_time_minutes: 6 canonical: https://www.totalqualitylending.com/blog/dscr-loan-appraisal-rent-schedule source: Total Quality Lending --- # The DSCR Loan Appraisal: How the Rent Schedule Sets Your Ratio > The appraisal on a DSCR loan sets both your loan-to-value and your qualifying rent. What the 1007 rent schedule is, how to prepare, and what to do when it comes in low. ![The rent schedule is the document your file lives on — Total Quality Lending](https://cdn.sanity.io/images/xd7hu67n/production/52ea1c1f0f2ec19d848977559e19aa98de0a9ebb-1728x910.png) **Quick answer:** The appraisal on a DSCR loan does two jobs. It establishes the value that sets your loan-to-value, and it establishes the market rent that sets your coverage ratio, through a rent schedule the appraiser completes alongside it, Form 1007 on a single-family and Form 1025 on two to four units. Lenders generally credit the lower of the in-place lease and the appraiser's market rent. On most investor files the appraisal is the pacing item, and it is the document a file most often fails on. Investors prepare carefully for the parts of a loan they can control. Credit, reserves, the entity, the contract. Then they treat the appraisal as something that happens to them. On a DSCR loan that is the wrong way round. The appraiser's rent opinion is the qualifying income. It is not reviewed against your tax returns, because there are none in the file. It stands alone. Here is what the appraisal is doing, what the appraiser is looking at, and what you can do before and after it lands. ## Two Numbers, Not One An owner-occupied appraisal answers one question: what is the property worth. An investor appraisal answers that and a second one: what would it rent for. The value sets the loan-to-value. If it comes in under the contract price, the loan amount is calculated on the lower figure and the gap is yours to fund. The rent sets the [debt service coverage ratio](/blog/what-is-a-good-dscr-ratio). If it comes in under the number the deal was modelled on, the ratio moves with it, and a file that cleared on paper may not clear on the appraisal. Both numbers can disappoint independently. A property can appraise at full value and still miss on rent, or the reverse. ## What the Rent Schedule Is The rent schedule is a separate form attached to the appraisal. On a single-family it is the Fannie Mae Form 1007, the Single-Family Comparable Rent Schedule. On two to four units it is the Form 1025, which includes the rent analysis within the small residential income property report. The appraiser identifies comparable rentals, adjusts them for differences in size, condition, bedrooms and location, and arrives at an opinion of market rent for the subject property. That opinion is what underwriting uses as gross rental income when it builds the ratio. Where a signed lease exists, most programs credit the lower of the lease and the market rent. A lease above market helps you less than it looks. A lease below market can hold the file back even when the appraiser agrees the property could rent for more. ## Short-Term Rentals Are Documented Differently A long-term rent schedule looks at lease comparables. Short-term rental income has no leases to compare, so it is supported by one of four sources instead: an appraiser's short-term rental analysis, a twelve-month property management statement, twelve months of bank statements showing the deposits, or, on purchases, an AirDNA Rentalizer report. The source changes the number. Projected income is multiplied by 0.80 before the expense factor is applied. A management statement documenting actual performance is not. On an operating property, bringing the seller's management statement rather than a projection can be worth a materially stronger ratio for the same revenue. The [worked examples](/blog/dscr-loan-examples) show the difference on one property. A marketplace revenue estimate pulled from a listing site is useful for deciding whether to pursue a deal. It is not accepted documentation on its own. ## What the Appraiser Is Looking At Beyond the comparables, the report notes condition, and condition can create conditions. Deferred maintenance, a roof at the end of its life, safety items, evidence of water intrusion, or an unpermitted addition can produce a report made subject to repairs, which has to be cleared before closing. Older housing stock, common in Midwest and Northeast investor markets, draws more of these than newer construction. Occupancy matters too. A tenant-occupied property needs scheduled access, and an uncooperative tenant can cost a week before the appraiser has even seen the inside. A vacant property needs utilities on so the appraiser can confirm systems work. ## How to Prepare for It - **Get it ordered early.** The appraisal is ordered once there is an application and an executed contract. The turn time in that market is the single biggest input to the closing date, and to how long the [rate lock](/blog/when-to-lock-dscr-rate) needs to be. - **Arrange access on day one.** Give the tenant notice as the lease requires and confirm the appointment yourself rather than through two intermediaries. - **Hand the appraiser the facts.** The signed lease if there is one, a rent roll on multi-unit, a list of improvements with dates, and any comparable rentals you know of that support the rent. Appraisers can consider information you supply. They cannot consider information nobody gave them. - **Fix the obvious before the visit.** A missing handrail or a disconnected smoke detector is a cheap repair in advance and an expensive condition afterward. - **Know your number in advance.** Work out the minimum rent the ratio needs at your leverage, so you know immediately whether the report clears. ## When the Rent Schedule Comes in Low It happens, and it is not the end of the file. The options, roughly in the order they are usually tried: - **Reconsideration.** If you have comparable rentals the appraiser did not use, a reconsideration request with specific comps can move the opinion. Opinions without evidence do not. - **More down.** A lower loan amount lowers the payment and lifts the ratio without touching the rent. [What that does to the down payment.](/blog/dscr-loan-down-payment) - **An interest-only structure.** The ratio on an interest-only loan is built on ITIA rather than PITIA, which can lift the same property across the line. [How that changes the ratio.](/blog/interest-only-dscr-loans) - **A sub-1.00 or no-ratio program.** Available with pricing adjustments and lower maximum leverage, for files where the strategy does not depend on the property covering itself on day one. One thing a low rent schedule does not do is get fixed by a rate lock. The lock holds pricing. It does not hold the ratio or the loan amount. ## FAQ **What is a 1007 rent schedule?** Fannie Mae Form 1007 is the Single-Family Comparable Rent Schedule, an appraiser's opinion of market rent based on comparable rentals. On two to four units the equivalent analysis is part of Form 1025. It establishes the qualifying income on a DSCR loan. **Does the lender use my lease or the appraiser's rent?** Generally the lower of the two. **Can I use Airbnb income on the appraisal?** Short-term rental income is supported by an appraiser's STR analysis, a twelve-month management statement, twelve months of bank statements, or an AirDNA Rentalizer report on a purchase. Projections are adjusted before they enter the ratio. **What if the property appraises below the purchase price?** The loan is calculated on the lower of price and value, so the difference comes from you, or the price is renegotiated. **Can I order my own appraisal?** No. The lender orders it through an independent process. You can supply information to the appraiser, and you can request a reconsideration with evidence. **Does a vacant property qualify?** Yes. The appraiser's market rent opinion is the qualifying income where there is no lease. ## Want to Know the Rent Your File Needs? Send us the property, the purchase price and the rent you are modelling. We will tell you the minimum the rent schedule has to return at your leverage, and what the fallback structure looks like if it comes in under. [Submit a scenario](https://tqltpo.totalqualitylending.com/submit-scenario), or [schedule a consultation](https://calendly.com/totalquality/investmentconsultation). Built by Investors to Build Investors. The Total Quality Lending Team. *This article is for general informational purposes only and is not financial, legal, or lending advice. Loan availability, terms, and qualification depend on a full underwriting review and program guidelines. Not a commitment to lend. All loans subject to credit approval. Total Quality Lending, NMLS #1933377. Equal Housing Lender.* --- Canonical URL: https://www.totalqualitylending.com/blog/dscr-loan-appraisal-rent-schedule Publisher: Total Quality Lending (NMLS #1933377)