Short-Term Rental DSCR Loan FAQ for Phoenix and Scottsdale

Usually, yes, if it is a business-purpose investment property that no owner or family member lives in. Arizona law bars cities from banning short-term rentals, so STR use is legal in Phoenix, Scottsdale and Tempe. Lenders still want the state TPT license, the city STR permit or license, and income evidence their program accepts.

Often. Some programs average 12 months of platform payout history, some accept a market-data estimate for a new listing, and some count only long-term market rent. The method can change the ratio on the same house, so we compare programs by income method first. See how lenders count Airbnb income.

It varies by program. Many look for income at least equal to the full payment (a ratio of 1.00 or higher), and STR programs often prefer more cushion. Some allow lower ratios with more cash in the deal or more reserves. Test your deal in the STR DSCR calculator.

Usually not to qualify. DSCR loans qualify on the property's rental income. Lenders still review credit, assets and reserves, and they ask for property documents such as payout statements, the city credential and insurance.

No. DSCR financing through Loan Daddy is for business-purpose, non-owner-occupied investment property only. A home you or your family use as a residence, even part-time, needs a different consumer product, and we do not arrange those.

It depends on the program. Some lenders want the permit in hand, and others accept proof that you have applied. Phoenix prohibits renting or offering an STR without a current permit, so the property cannot earn STR income until you have one. See the Arizona STR permit checklist.

Per the city's published rules, an annual license per property for rentals of less than 30 days, an Arizona TPT license, neighbor notification within 30 days of licensing, an emergency contact and at least $500,000 of liability coverage. Confirm the current rules with the city. More on the Scottsdale page.

Yes, potentially. State law limits what cities and towns can do. It does not override private CC&Rs or condo declarations. If your community documents restrict rentals under 30 days, an STR-based loan probably will not work there. See HOA and condo rules.

Under Phoenix's published rules, ADUs with a certificate of occupancy issued on or after September 14, 2024 require the owner to attest they will live on the property to use the ADU as an STR, effective April 4, 2026. That does not fit an investment-only loan. Read the Phoenix ADU guide.

STR operators need an Arizona transaction privilege tax (TPT) license through the Department of Revenue, and the cities ask for it in their permit process. Booking platforms may collect and remit some taxes, but you still need the license. Ask a tax professional about your obligations.

Usually, yes. Most DSCR programs allow title in an LLC, with the articles of organization, operating agreement and EIN letter, and a personal guarantee from members. See holding an Arizona STR in an LLC.

Sometimes. Lenders review the condo project as well as your unit. Projects that operate like hotels, with rental pools, front desks or mandatory management, or with a high share of short-term units, can fall outside many DSCR programs. Send the building name early.

Often, if the property has booking history, a current city license and TPT record, and an appraisal that supports the value. Seasoning rules vary by lender, and proceeds must go to business purposes. See STR cash-out refinance.

Some DSCR programs finance 2-4 unit properties where one or more units are short-term rentals. Each unit needs to be allowed to operate as an STR, and the lender reviews the income method for each. Tell us the unit mix when you send the scenario.

No. Loan Daddy LLC is a mortgage broker, not a lender. We arrange and shop financing from wholesale lenders; the lender you choose underwrites the loan and makes the credit decision. See licensing.

No. Pricing comes from wholesale lenders, depends on the property and your file, and changes often. We compare current programs for your specific scenario instead of publishing a number that may not apply to you.

This site focuses on the core of the Valley. For all Arizona DSCR options, including long-term rentals elsewhere in the state, see dscrloanarizona.com.