For investors
DSCR loans for Arizona real estate investors.
A DSCR (debt service coverage ratio) loan qualifies you on the rental property's income instead of your personal tax returns. That makes it a common choice for investors with several properties, self-employed buyers, and anyone whose tax returns show heavy write-offs. Marketline compares DSCR programs from several lenders, because their rules vary widely.
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How DSCR qualifying works
The lender compares the property's rent, taken from a lease or an appraiser's rent estimate, with the full monthly housing cost: principal, interest, taxes, insurance, and any HOA dues. If the rent covers the cost by the margin the lender requires, the loan can qualify without your personal income documents.
Who uses DSCR loans
- Investors buying their fifth, tenth, or twentieth rental
- Self-employed borrowers and business owners
- Buyers purchasing in an LLC (lender rules vary)
- Short-term rental investors in Scottsdale, Phoenix, and other markets
- Out-of-state investors buying in Arizona
Arizona investor details we plan for
Short-term rentals. Rentals of less than 30 days need an Arizona transaction privilege tax (TPT) license from the Arizona Department of Revenue, with the TPT number shown on every listing, and the rental must be registered with the county assessor. Scottsdale requires an annual short-term rental license for each property ($250), and Phoenix requires an annual short-term rental permit ($250). Both require at least $500,000 in liability insurance and notice to neighbors. Other Arizona cities can require their own permit, so we check before you buy. Some DSCR lenders accept projected short-term rental income, and others use long-term rent only.
HOAs. Many Valley HOAs restrict rentals or set minimum lease terms. We check the CC&Rs before you commit.
Insurance. Landlord and short-term rental policies cost more than standard homeowner's coverage and count in the DSCR calculation. Marketline Insurance can quote them.
Property taxes. Arizona classifies rentals differently from owner-occupied homes, so a rental's tax bill can be higher than the seller's. We use the right figure in your DSCR calculation.
Arizona DSCR loan FAQ
What does DSCR stand for?
Debt service coverage ratio. It's the property's monthly rent divided by its full monthly housing cost. A higher ratio means the rent covers the payment more comfortably.
Do DSCR loans require tax returns?
Usually not. Most DSCR programs qualify on the property's rent, along with credit, assets, and reserves, instead of personal income documents.
Can I use a DSCR loan for an Airbnb in Scottsdale?
Some lenders allow short-term rental income, often based on market data or the property's booking history. The property also needs Scottsdale's annual short-term rental license and an Arizona TPT license.
Can I close a DSCR loan in an LLC?
Many DSCR lenders allow it, usually with a personal guarantee. We'll match you with a lender whose entity rules fit your setup.
Can I refinance a rental with a DSCR loan?
Yes. DSCR loans are available for rate-and-term and cash-out refinances on investment properties.
Talk with Taum about your loan. Free consultation, no pressure. Office 480-967-TAUM (8286) · Cell 480-797-4898 · Apply Now
David "Taum" Hemmingsen · Owner · Banker · Broker · NMLS #51267 · AZ MLO License #0910918
Marketline Mortgage, LLC · NMLS #1842 · Arizona Mortgage Broker License #MB-1049666 · 16427 N Scottsdale Rd, Ste 410, Scottsdale, AZ 85254 · NMLS Consumer Access · Equal Housing Opportunity
This is not a commitment to lend. All loans are subject to credit approval, property eligibility, and program guidelines, which can change.
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