Form 1007, and Why Your Lease No Longer Counts
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
If you have read that a signed lease is the strongest way to prove rent on the home you are leaving, that guidance is out of date. Here is the current rule.
What changed
Fannie Mae reorganised its rental income guidance and issued Announcement SEL-2026-08 on September 2, 2026. Departing residences now have their own section, B3-3.8-05, dated 09/02/2026. Guidance that previously sat under B3-3.1-08 has moved, and a good deal of writing still cites the old section number.
The substantive change that matters most: leases are out. The documentation section closes with the sentence, lease agreements are not permitted for any departing residence.
What is accepted
- a complete appraisal report that includes market rents, or
- a Single-Family Comparable Rent Schedule, Form 1007, for the occupied unit, or
- market analysis tools such as Zillow, Redfin or the MLS, with at least three comparable rental properties, from the same market area including subdivision or project when possible.
Where the departing residence is multi-unit, market analysis is limited to the borrower-occupied unit. All documentation used to determine market rents must be in the loan file. Separately, the lender must document a current housing payment to use any departing-residence rental income at all.
The calculation, exactly
Adjusted net rental income is monthly gross rent multiplied by 75%, then minus the PITIA for the departing residence.
- If the result is positive, the lender may use rental income to offset the departing residence PITIA only.
- If the result is negative, the lender must include the amount in the debt-to-income ratio.
The asymmetry is the point. Strong rent does not make you a stronger borrower for the new purchase; it makes the old house stop counting. Weak rent still hurts.
Reserves
Six months of reserves covering the vacated property's PITIA are required when the borrower has less than 12 months of property management experience, in addition to reserves for multiple financed properties.
Multi-unit departing residences
The lender obtains the most recent year of individual federal income tax returns, IRS Form 1040, to support rental income received for tenant-occupied properties. Those units follow the non-subject-property guidance, and the vacancy factor applies only to the unit the borrower occupied.
The Oregon note
This route matters more in Oregon than in most states, because five Oregon metros were declining as of August 2026 and converting rather than selling removes the dependency on a sale date entirely.
See the rental conversion page and the structures page.
Frequently asked questions
Can I use a lease to document rent on a departing residence?
No. Fannie Mae Selling Guide B3-3.8-05, dated 09/02/2026 under Announcement SEL-2026-08, states that lease agreements are not permitted for any departing residence.
What is Form 1007?
The Single-Family Comparable Rent Schedule. It is one of three accepted ways to establish monthly gross market rent on a departing residence, alongside a complete appraisal that includes market rents and market analysis tools using at least three comparable rental properties.
How is adjusted net rental income calculated on a departing residence?
Monthly gross rent multiplied by 75%, then minus the PITIA for the departing residence. A positive result may offset that property's PITIA only and never adds qualifying income. A negative result must be included in the debt-to-income ratio.
Which Selling Guide section covers departing residences now?
B3-3.8-05, Rental Income from Non-Subject Property: Departing Residence, dated 09/02/2026. Rental income guidance was reorganised by Announcement SEL-2026-08, so citations to the older B3-3.1-08 section are out of date.
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. Oregon property tax is administered county by county under the Department of Revenue, and whether any local charge applies to your transfer depends on where the property sits; your closing agent, your CPA or an Oregon attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.