Arizona Investment Property Loans

Arizona is a business-purpose lending state for us. We finance non-owner-occupied investment property here through DSCR, non-owner bank statement, NONI, bridge, and commercial programs.

Owner-occupied and consumer mortgage products (FHA, VA, USDA, conventional, jumbo, reverse) are not offered in Arizona.

Where Arizona deals actually pencil

Phoenix is one metro on paper and four different lending markets in practice. The gap between them is wide enough that the same borrower, same credit, same down payment gets a different answer depending on which side of the Valley the property sits on.

Illustrative 2026 submarket figures across the Phoenix MSA:

Figures are illustrative market observations, not quotes. Phoenix MSA median is roughly $425K on price and $2,050 on 3BR rent, with a metro-wide gross yield near 5.8%.

The practical read: Scottsdale rarely debt-services on a standard DSCR program. Not because there’s anything wrong with the asset, but because a 3.2% gross yield can’t carry today’s payment. Investors buying that corridor are usually structuring around appreciation, and the financing conversation should start from that premise rather than ending at a declined ratio.

For current observed pricing across credit tiers, see the non-QM rate index , updated weekly.

The new-build rent comp problem

Worth knowing before you underwrite a West Valley new-build: initial 2023 builder leases in parts of that submarket ran roughly 6%–10% above sustainable market, and replacement leases in 2026 have been coming in 4%–8% lower.

If your pro forma is built on the original lease, your actual DSCR at renewal may be meaningfully below what the file showed at closing. Underwrite to the appraiser’s market rent rather than the in-place lease when the two diverge and the lease is a first- generation builder lease.

Arizona short-term rental law is an investor advantage

Arizona is unusual, and it favors STR operators.

Under A.R.S. § 9-500.39, originating with SB 1350 (2016), Arizona cities cannot ban short-term rentals outright or impose blanket caps. SB 1168 (2022) restored the ability to require permits and licenses, but the underlying preemption stands — a municipality can regulate an STR, not prohibit it.

That is a materially different risk profile than a market where a city council can eliminate your business model by ordinance. It is also why STR-strategy files here underwrite differently than they do in, say, Nashville.

What operators actually have to carry:

• State TPT license from the Arizona Department of Revenue, obtained before you operate, with the license number displayed on every listing. State TPT base rate is 5.6%.
• Phoenix (Ordinance G-7156, effective November 6, 2023) — $250 annual permit, property-specific and non-transferable, 24/7 emergency contact through myphx311. Escalating fines from $500 to $3,500. ADUs may not be used as short-term rentals. Combined tax roughly 10%–12%.
• Scottsdale (Ordinance 4566) — $250 annual license and $500,000 minimum liability insurance. License must appear on all marketing. Combined tax 8.05%.
• Sedona — $210 annual permit. Tucson — $25 application, $70 renewal.
• Glendale carries the heaviest combined tax load in the metro at 15.7%, which is a real line item in an STR pro forma and is frequently left out of one.

Not every DSCR program will qualify a property on short-term rental income, and those that do differ on whether they accept a 12-month operating history or third-party market data. Confirm the program before you write the offer, not after.

Arizona-specific lending mechanics

Prepayment structures are not available everywhere. Availability and terms vary by state, by loan amount, and by whether the borrower takes title personally or through an entity. We confirm the structure for your state and vesting before quoting.

Second-lien structures are available on Arizona files, so CLTV approaches that rescue a tight down payment are on the table here.

LLC vesting is standard on DSCR files and generally recommended for portfolio separation. Expect to bring the operating agreement, EIN, and formation documents to closing.

Programs available in Arizona

• DSCR Loans — qualified on the property’s rental income rather than your personal income. No limit on financed properties.
• Bank Statement Loans — Non-owner-occupied bank statement loans; 12 or 24 months of deposits used to derive qualifying income, for self-employed investors.
• NONI / Foreign National Loans — for borrowers with no documentable U.S. income.
• Hard Money Loans — Short-term, asset-based financing for fix-and-flip, lot acquisition, and value-add deals. Available in all 50 states.
• Rehab Loans — Purchase and renovation financing in one loan. Fix-and-flip, BRRRR, and value-add projects.
• Bridge Loans — Short-term financing between an acquisition and permanent loan, or while a property is stabilizing. debt-service on day one because they aren’t stabilized yet.
• Commercial Real Estate Loans

Arizona city programs

• Scottsdale DSCR Loans
• Phoenix investment property financing

Arizona investor FAQ

Can I get a DSCR loan in Arizona if the property doesn’t cash flow yet? Sometimes. If the shortfall is structural — a Scottsdale-corridor property at a 3.4% gross yield — interest-only or a larger down payment may bridge it. If the property has no rent roll at all because it’s mid-rehab or newly vacant, that’s a timing problem rather than a ratio problem, and a bridge or no-ratio program is usually the better fit.

Does Scottsdale’s insurance requirement affect my loan? Not your qualification, but it affects your pro forma. The $500,000 minimum liability coverage is an operating cost that belongs in your expense modeling before you calculate returns.

Can I finance a short-term rental in Arizona with a DSCR loan? Some programs allow it and some don’t, and those that do differ on how they treat the income — 12-month operating history versus third-party market data. Because Arizona cities can’t ban STRs, lenders tend to view Arizona STR files more favorably than files in markets with prohibition risk.

Do you lend on Arizona owner-occupied purchases? No. Arizona is business-purpose only for us — investment and non-owner-occupied property financing. We do not offer FHA, VA, USDA, conventional, jumbo, or reverse mortgages in Arizona.

Is an Arizona LLC required? Not required, but standard practice and generally recommended on DSCR files.

Ready to run a specific Arizona property? Check DSCR eligibility or call (833) 350-9185 .

For illustration only. Not a commitment to lend. Rates and terms subject to change and qualification. Market figures are illustrative observations and not guarantees of performance. 1st Nationwide Mortgage Corporation, NMLS #1281. Equal Housing Lender.