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 a rent-capped state, the number it produces has a second life.
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 is in the policy: the framework relies on market-supported rents rather than lease agreements. A lease reflects what one tenant agreed to pay, which may sit above or below market.
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 Washington angle: market rent versus capped rent
Here the federal rule and Washington law interact in a way worth planning around.
B3-3.8-05 underwrites you on market rent, established from an appraisal or a Form 1007. HB 1217 then limits how fast your actual rent may rise: no more than 7% plus CPI or 10%, whichever is less, over any 12-month period, with the Department of Commerce publishing 9.683% for 2026 and 10% for 2027. No increase at all is permitted during the first 12 months of a tenancy.
The practical consequence is that the opening rent matters more in Washington than in an uncapped state. If you set the first rent well below the market figure you were underwritten on, the cap limits how quickly you can close that gap. Setting it deliberately, with the Form 1007 figure in hand, is the sensible order of operations.
It also helps that market rent can be established with no tenant in place, so the analysis can be done before any tenancy begins and before the first-12-months rule starts running. See the rental conversion page.
What happens to the number
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.
Does Washington's rent cap affect the rent I was underwritten on?
Not the underwriting, but it affects what you can actually charge over time. B3-3.8-05 uses market rent from an appraisal or Form 1007, while HB 1217 caps increases at 7% plus CPI or 10%, whichever is less, with 9.683% published for 2026. Setting the opening rent deliberately matters more in a capped state.
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. Excise tax treatment, rent-cap exemptions, and county relief thresholds change and depend on your facts; your closing agent, your county assessor, your CPA or a Washington attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.