Rental Income FAQ

Question: Is the appraiser required to complete Form 1000 Single-Family Comparable Rent Schedule, when rental income from the subject 1-unit investment property is not being used for qualification?

Answer: No, Form 1000 is not required when rental income from the subject 1-unit investment property is not being used to qualify.

However, per Single-Family Seller/Servicer Guide (Guide) Section 5306.1(i)(ii) "Regardless of whether rental income from the subject investment property or 2- to 4-unit primary residence is being used to qualify the borrower, the Seller must deliver the ULDD Data Point Property Dwelling Unit Eligible Rent Amount. 

Note: Form 72, Small Residential Income Property Appraisal Report is required for all subject 2- to 4-unit primary residences and subject 2- to 4-unit investment properties, regardless of whether rental income from units not occupied by the Borrower is used for qualification.

Form 1000 may not be used to estimate market rent for short term rentals. The form is used to document the estimated monthly market rent. Short-term rentals are typically executed on a nightly basis without a lease agreement and have different costs associated with them (e.g., cleaning, furniture, etc.).

Yes, short-term rental income or loss from Schedule E may be used and must be annualized for qualification purposes.

Yes, if the Seller can determine that the specific land contract or contract for deed confers ownership of the property to the borrower. The Seller may need to consult with legal counsel to determine if legal ownership has been established. In addition, all other rental income requirements in Section 5306.4 must be met.