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. In Colorado that turns out to be helpful.
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 more 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 new framework relies on market-supported rents rather than lease agreements. A lease shows what one tenant agreed to pay, which may be above market, below market, or an arrangement between relatives. Market rent evidence is harder to arrange around.
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.
The Colorado angle nobody mentions
This change is genuinely convenient in Colorado, and it is worth understanding why.
Colorado's HB24-1098 requires cause to end a residential tenancy, and removes lease expiration by itself as a ground. Once a tenant is in the house, getting it back for sale means relying on an enumerated cause, generally with 90 days written notice.
Under the old federal rule, using rental income meant producing a signed lease, which meant placing a tenant, which meant starting that relationship. Under B3-3.8-05 you establish market rent from an appraisal or a Form 1007 instead, with no tenant involved. Qualifying and tenanting are now separate decisions, and you can take the first without committing to the second.
That is a real planning advantage for a Colorado borrower and a direct consequence of two rules that were not written with each other in mind. 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.
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 for the occupied unit, or a market analysis supported by at least three comparable rentals.
Do I have to rent out my Colorado home before I can use the rental income?
No, and that is useful here. Because B3-3.8-05 establishes market rent from an appraisal or Form 1007 rather than a lease, you can document the income without placing a tenant. In Colorado that matters, since HB24-1098 requires cause to end a tenancy once 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; a negative result is included in the debt ratio.
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. Property tax classifications, exemption eligibility, and landlord-tenant rules change and depend on your facts; your county assessor, your CPA or a Colorado attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.