Arizona DSCR Loan Lenders for Long-Term Rental Homes
Are you seeking long-term private financing for a residential rental property in Arizona? On this page you'll find a list of lenders that offer these “DSCR” loans for single family homes, condos, and 2-4 unit rental properties in Arizona’s urban areas. Some lenders consider vacation rentals (aka short-term rental or STR). The maximum loan-to-value is 80%. For a purchase, investors need a minimum down payment of 20%, and it could be higher depending on the debt service coverage ratio (DSCR), borrower’s credit score and location. The minimum credit score is 680 for most lenders. The loans terms range from 5 to 30 years.Searching...
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Arizona DSCR Loan Interest Rates
According to the loan documents software company, Lightning Docs, the average interest rate for Arizona DSCR long-term rental loans in the 4th quarter of 2023 was 8.38%. The average loan amount was $379,022. These stats are the average of 27 loans funded for residential rental properties in Arizona between October 1, 2023 and December 31, 2023 by multiple lenders that use Lightning Docs as their preferred software provider to prepare loan documents.
Funded DSCR Rental Loans in Arizona
Easy Street Capital, a direct private real estate lender, funded a $648,000 1st lien position long-term refinance loan secured by a single-family home in Scottsdale, Arizona. The property was appraised at $867,000 making the loan-to-value ratio 74.75%. We paid off a previous loan balance of $619,310. The loan was structured with a fixed interest rate of 9.125% and required interest-only payments for the first 10 years of the term, amortized on a 20-year schedule thereafter. There is prepayment protection of a 1% penalty for the first 12 months, with the remaining 348 months open for prepayment without penalty prior to maturity. The home is rented as a short-term rental (vacation home). The debt service coverage ratio was 1.51. The Borrower had good credit. The subject property is a 2,320-square-foot single-family home featuring four bedrooms and three and a half bathrooms. The home was originally purchased for below market value as it was in need of modernization. Since then, the Borrower has completely renovated the home. Updates included a new kitchen, new bathrooms, new flooring and fixtures, new windows, new interior and exterior paint, the addition of a brick paved walkway in the yard, and refinishing the pool with new pebble-tec. The Borrower plans to continue operating as a short-term rental and will pay off the loan over the 30-year term. This DSCR rental refinance loan was funded in July 2023.