Form 1007 and How Departing Residence Rent Gets Documented
Program and regulatory figures verified September 19, 2026. Details change; confirm your scenario with us.
When a lease stopped being acceptable evidence, this form went from a supporting document to the main one.
What the form is
Form 1007, the Single-Family Comparable Rent Schedule, is completed by an appraiser to establish market rent for a one-unit property. It sets out comparable rentals and reconciles them into an opinion of market rent, much as a sales comparison approach reconciles comparable sales into an opinion of value. Two-to-four-unit properties use Form 1025.
Why it carries the weight now
Until the September 2026 restructuring, a fully executed lease was the usual way to document rent on a departing residence, with a rent schedule supporting it. Fannie Mae B3-3.8-05 now states that lease agreements are not permitted for any departing residence.
The reasoning appears in the policy itself: the framework relies on market-supported rents rather than lease agreements. A lease reflects what one tenant agreed to pay, which may be above market, below market, or an arrangement between relatives.
The content formerly at B3-3.1-08 now lives at B3-3.8-01 through B3-3.8-05. Advice still citing the old section number predates this change.
Why this helps in Virginia specifically
Because it separates two decisions that used to be joined.
Under the old rule, using rental income meant producing a signed lease, which meant placing a tenant. Under B3-3.8-05 market rent comes from an appraisal or a Form 1007, with no tenant involved.
That matters here for a particular reason. Virginia's real estate tax relief is a local ordinance attached to a qualifying owner-occupied dwelling, and converting the property to a rental changes its character in ways the locality decides. Being able to price the rental option on paper first means you can take that question to your commissioner of the revenue while you still have a choice, rather than discovering the answer after a tenant is in place. Detail on the rental conversion page.
What happens to the number
Whatever market rent is established, the qualifying calculation reduces it. Gross rent times 75%, with the remaining 25% treated as absorbed by vacancy and maintenance. Then the property's full PITIA is subtracted.
A positive result offsets that property's own payment. A negative result is added to your debt ratio. It does not become qualifying income either way, which is the single most misunderstood part of the current rule.
Six months of PITIA reserves apply on the vacated property where the borrower has less than 12 months of property management experience.
Timing
These requirements bind for applications dated on and after November 1, 2026, and lenders were encouraged to adopt them immediately after the September 2, 2026 publication. For a file being planned now, assume the new framework applies.
Frequently asked questions
What is Form 1007?
The Single-Family Comparable Rent Schedule, completed by an appraiser to establish market rent for a one-unit property using comparable rentals. Two-to-four-unit properties use Form 1025 instead.
Can I use a signed lease instead of Form 1007 for my departing home?
Not under the current rule. Fannie Mae B3-3.8-05 states that lease agreements are not permitted for any departing residence. Market rent must come from a complete appraisal including market rents, a Form 1007, or a market analysis supported by at least three comparable rentals.
Do I need a tenant before I can use rental income?
No. Because B3-3.8-05 establishes market rent from an appraisal or Form 1007 rather than a lease, the documentation can be produced while the house is still vacant. In Virginia that lets you check how converting the property affects local tax relief before a tenant is in place.
How much of the market rent counts?
75% of gross rent, with the remaining 25% treated as absorbed by vacancy and maintenance, less the property's full PITIA. A positive result offsets that property's own payment rather than adding to qualifying income.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Local tax relief ordinances, recordation treatment, and landlord obligations change and depend on your facts; your commissioner of the revenue, your CPA or a Virginia attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.