The Appraisal Rent Schedule: Why the Lender's Rent Differs From Yours
On a DSCR loan, the appraiser's rent estimate can matter as much as the property's value. Here's how it's set and how to support your number.
Short answer
On DSCR loans, the appraiser estimates market rent from comparable rentals on a rent schedule: Form 1007 for single-family homes or the rental section of Form 1025 for 2 to 4 units. Lenders use that figure, or the lower of it and an existing lease, to calculate the ratio. A lower rent estimate means a lower DSCR.
Key points
- The appraiser's market rent drives the ratio.
- Many lenders use the lower of lease and market rent.
- Strong comparable rentals are the best support.
How the rent schedule works
The appraiser picks comparable rentals, usually nearby properties of similar size, age and condition, and adjusts for differences like bedrooms, parking or updates. The result is a market rent for your property, and on a DSCR loan it feeds straight into the ratio.
Deal sheet: $2,200 monthly payment, illustrative
| Rent | DSCR | |
|---|---|---|
| Your expected rent | $2,600 | 1.18 |
| Appraiser's market rent | $2,400 | 1.09 |
| Difference | −$200 | −0.09 |
Why it can come in low
- Comparables from older listings in a fast-rising market
- Upgrades the appraiser didn't credit, like a renovation or an added bedroom
- Few true comparables nearby
- Short-term rental income the program doesn't count; see short-term rental loans
Have a rental in mind? Send the address and expected rent, and a KREC loan advisor will run the DSCR for you. Check my DSCR
How to support your number
- Pull three to five current rentals that closely match your property.
- Document upgrades with photos and invoices.
- Share a signed lease at market rent if you have one.
- Ask your lender how to request a reconsideration if strong comparables were missed.
If the ratio still falls short, see five ways to move your DSCR.
Frequently asked questions
What is Form 1007?
It's the single-family comparable rent schedule an appraiser completes to estimate market rent. For 2 to 4 unit properties, rent is estimated on Form 1025.
Does the lender use my lease or the appraiser's rent?
Many lenders use the lower of the two. Some allow a higher lease with proof the tenant has been paying it.
Can I challenge a low rent estimate?
You can usually request a reconsideration through your lender with better comparable rentals. There's no guarantee it will change.
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