When buying or refinancing an Arizona rental property, consider the property’s income potential. We offer DSCR financing that evaluates rental income instead of your personal income.
What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio. It compares a property’s gross rental income with its required monthly housing expenses.
DSCR = Gross Monthly Rental Income ÷ Monthly PITIA
PITIA includes principal, interest, property taxes, insurance, and, when applicable, association dues.
For example, a property with $3,000 in gross monthly rent and $2,500 in monthly PITIA has a DSCR of 1.20. That means its rental income equals 120% of its monthly housing expenses. The required ratio and available terms depend on the selected program. No-ratio options are also available, subject to additional qualification requirements.
Arizona DSCR Program Highlights
- Loan amounts up to $5,000,000
- Up to 85% LTV for purchases
- Up to 85% LTV for rate and term refinances
- Up to 80% LTV for cash-out refinances
- Minimum credit score of 620
- No personal income used to qualify
- No-ratio options available
- One- to four-unit residential investment properties
- Eligible condominiums permitted
- Vacant properties allowed
- Gift funds allowed, subject to program requirements
- No program limit on the number of financed properties
- Non-TRID options available for qualifying business-purpose transactions
- Investment properties only
Purchase an Arizona Investment Property
DSCR purchase financing can help investors acquire eligible rental properties without qualifying through personal employment income or a personal debt-to-income calculation.
Purchase financing is available up to 85% loan-to-value, subject to qualification. This may allow eligible buyers to put down as little as 15%, plus applicable closing costs and any required reserves.
Program guidelines may permit gift funds.
Contact us to review acceptable sources of funds before arranging your down payment.
Refinance an Existing Rental Property
A rate-and-term refinance can replace your existing investment property mortgage to adjust the rate, repayment term, or loan structure. Financing is available up to 85% LTV, subject to program requirements. Because it doesn’t use personal income for qualification, this approach may help investors whose tax returns don’t support traditional mortgage qualification.
Access Equity With a Cash-Out Refinance
A DSCR cash-out refinance may allow you to access equity in an eligible Arizona investment property. With financing available up to 80% LTV, qualified investors may use the proceeds for property improvements, another investment purchase, or other business purposes. The available cash-out amount depends on the property’s value, existing loan balance, closing costs, and applicable program requirements.
No-Ratio Options for Investors
A property may not meet a standard DSCR threshold and still be eligible for consideration through a no-ratio program. These options do not require a minimum qualifying DSCR under the selected program. The lender still reviews the property, credit, equity, and other underwriting factors. Different LTV limits, pricing, or reserve requirements may apply.
Vacant Properties Can Be Considered
An investment property may not have a tenant in place when you need financing. Vacant properties are allowed, subject to program guidelines. When permitted, we may evaluate rental income using an appraisal-supported market rent analysis. Let us know whether the property is leased, vacant, or being prepared for rental so we can review the appropriate option.
Financing for Growing Portfolios
Our DSCR options have no program limit on the number of financed properties, making them worth considering for investors who already own multiple rentals. Each transaction remains subject to underwriting. You can discuss a new purchase or refinance without assuming that the size of your existing portfolio automatically disqualifies you.
Contact us to review your investment property financing options.