When turning your St. Louis primary home into a rental to buy your next house in Kirkwood, Chesterfield, or South City, documenting qualifying rent is critical. The numbers only work if the lender counts rent on the house you already own. For years, many St. Louis buyers hit the same wall: the underwriter wanted a signed lease and a security deposit receipt before that rent could help you qualify for the new purchase. If the tenant was not lined up yet, the deal stalled.
Sean Zalmanoff at Better Rate Mortgage has been walking St. Louis move-up buyers through a quieter Fannie Mae documentation change that matters in that exact moment. In the scenarios he has been underwriting, the signed lease and security deposit are no longer the only path. A Form 1007 (Single-Family Comparable Rent Schedule) plus market rent support from sources such as MLS, Redfin, or Zillow can be enough for the lender to use market rent on the departing primary home, subject to the rest of the application and any lender overlays.
This is education for buyers and agents in the St. Louis metro. It is not a rate, not an APR, and not a commitment to lend. Fannie Mae selling guides, investor overlays, and appraisal requirements change. Your loan officer has to confirm what the specific AUS findings and the wholesale partner will accept on your purchase.
Turning Your St. Louis Primary Home Into a Rental for Move-Up Purchases
A classic St. Louis pattern: you still own the townhouse in Maplewood or the ranch in Florissant, you are under contract on the next primary home, and you intend to keep the first house as a rental. The new payment only works if some of the projected rent offsets the old PITI in the debt ratios.
Under the older documentation habit, many lenders wanted a fully executed lease and proof the security deposit was collected before they would count that rent. Buyers who planned to list the unit after they moved, or who had a verbal tenant and no signed paperwork yet, could not use the income. They either put more cash down, waited to close, or walked from the new house.
The update Sean has been citing for Better Rate Mortgage clients is that Fannie Mae can accept a market-rent approach on the departing residence when the lease package is not available, using a completed Form 1007 and comparable rental data. That does not mean every loan will count 100 percent of the rent you hope to charge. It means the door is open to document the income without waiting on a signed lease in situations that previously stalled.
What Form 1007 actually is
Form 1007 is the Single-Family Comparable Rent Schedule. An appraiser completes it. It is not a flyer you print from Zillow. The form compares the subject property to similar rentals and supports a monthly market rent opinion.
In practice for a St. Louis purchase where you are converting the current primary to a rental, the lender may order or accept a 1007 alongside the purchase appraisal package, or as a separate rent schedule on the retained property. The comps should look like real rentals in the same market: similar bedrooms, condition, and location. A luxury listing rent in Clayton does not support a modest duplex in North County.
Market listings from MLS, Redfin, or Zillow can help the appraiser and the underwriter see what similar units are asking or achieving. They do not replace the 1007. They support it. Screenshots without addresses, dates, and comparable details are weak evidence. Clean comps with clear rent amounts are what underwriters can defend.
What still has to be true on the loan
Documentation flexibility is not a free pass on ratios, reserves, or occupancy.
The new house still has to be your primary residence if that is how the loan is locked. The retained house has to make sense as a rental: zoning, condition, and a rent that fits the neighborhood. Lenders still apply vacancy factors and may haircut the rent used in qualifying. Credit, employment, and assets still have to clear. If you already have several financed properties, investor guidelines and reserve requirements get tighter even when the rent schedule is clean.
Freddie Mac, FHA, VA, and portfolio Non-QM loans are not the same rulebook. This article is about the Fannie Mae conventional path Sean has been discussing with St. Louis buyers. If your purchase is FHA or a non-conforming jumbo, ask which rent documentation that program wants before you assume a 1007 alone will carry the income.
Lender overlays still matter. One wholesale partner may accept market rent with a 1007. Another may still ask for a lease when the tenant is already identified. Better Rate Mortgage shops the guideline that matches the real paperwork you have, not the brochure version of the rule.
How to prepare before you write the offer
Do not wait until the financing contingency is almost expired.
Tell Sean early that the current home will become a rental and that you may not have a signed lease yet. Pull recent rental comps for your exact neighborhood, not the whole metro. Note the asking rents, bedrooms, and whether the units are leased or vacant. Keep the mortgage statement, HOA dues, taxes, and insurance for the retained property ready so the payment side of the ratio is accurate.
Ask whether the lender will order a Form 1007 on the retained property and what percentage of market rent they will use after vacancy. Get that answer in writing on the Loan Estimate conversation, not as a hallway guess. If a lease is already signed, bring it anyway. A real lease plus a 1007 is stronger than either document alone when the numbers are tight.
If the rent needed to make the new purchase work is well above every comparable in the ZIP code, fix the purchase price or the cash to close. A 1007 will not invent a rent the market does not support.
When a lease is still the better package
If you already have a qualified tenant, a signed lease, and the security deposit in hand, use that package. Underwriters like paper that shows the income has started. Market-rent documentation is the tool when the lease is not ready yet and the move-up timeline will not wait.
Short-term rental projections, furnished nightly rates, and optimistic Airbnb calendars are a different conversation. Conventional Fannie Mae qualifying on a departing primary usually wants long-term market rent support, not peak season nightly revenue. If the property will be a short-term rental, say so at the start so Sean can tell you whether a conventional purchase or a different investor product is the honest path.
What to do this week if you are under contract in St. Louis
If you are turning your St. Louis primary home into a rental, call Better Rate Mortgage with property details to confirm how your rent will be counted.Ask specifically whether your application can use Form 1007 and market rent comps for the departing primary, and what vacancy factor the AUS and the investor will apply.
Sean Zalmanoff, NMLS 239823, works these St. Louis move-up loans every week. Start at betterratemortgage.com. Bring the comps and the payment details on both houses before you ask what the new payment will be. The rent documentation decides whether the ratios even clear.
Better Rate Mortgage, Company NMLS 2401335. Licensed where Sean originates. This article is educational only. Guidelines change. Equal Housing Lender.
FAQ
Do I still need a signed lease to count rent on my current St. Louis home?
Not always, on the Fannie Mae conventional path Sean has been using. A Form 1007 with supportable market rent comps may be accepted instead of a signed lease and security deposit in some cases. Confirm with the lender on your specific purchase, because overlays still apply.
Is a Zillow rent estimate enough by itself?
No. Listing and rent sites help show the market. The Form 1007 from an appraiser is the document underwriters rely on. Thin screenshots without comparable detail usually fail.
Will the lender count 100 percent of the market rent?
Usually not. Vacancy factors and program rules commonly reduce the rent used in ratios. Ask for the factor that will apply on your Loan Estimate conversation so the payment math is honest.
Does this apply to FHA or VA purchases?
This article is about Fannie Mae conventional documentation discussed for Better Rate Mortgage clients. FHA, VA, Freddie Mac, and Non-QM investor loans can require different rent evidence. Say which program you want on day one.
What if my needed rent is higher than every comparable nearby?
The 1007 will follow the market, not your target payment. Either bring more cash, adjust the new purchase, or wait until a real lease at a supportable rent is in place. Do not force an unsupported rent into the application.
