Preemption covers cities, not your association
A.R.S. § 9-500.39 limits what cities and towns can do about short-term rentals. It says nothing that overrides private covenants. Homeowners associations and condo associations get their power from recorded documents that every owner accepts when they buy. Those documents can restrict rental terms, and many Valley communities use them to limit STRs.
In practice this means a Phoenix, Scottsdale or Tempe home can be fully eligible for a city STR permit or license and still be off-limits as an STR because of its HOA. Lenders know this, and many will ask for the rental clause before they count short-term income.
Clauses to look for in the CC&Rs
- Minimum lease term. A clause requiring leases of 30 days or more, or longer, effectively bans STRs.
- Rental caps. Some communities limit how many homes can be rented at once, or how many times a year a home can be rented.
- Registration or fees. Some allow STRs but require owner registration, guest registration or a fee.
- Occupancy limits and parking rules. These do not ban STRs but can limit how many guests you can host.
- Amendment process. Associations can amend CC&Rs. A community that allows STRs today may vote to restrict them later. Arizona has rules about how amendments apply, and the details matter, so talk to an Arizona real estate attorney if this is a concern.
Condo project reviews
For a condo, the lender reviews the project as a whole, not just your unit. Expect questions about:
- Whether the declaration allows rentals under 30 days.
- Whether the project operates like a hotel: a rental desk, mandatory rental pooling, daily housekeeping or front-desk check-in.
- The share of units that are investor-owned or short-term rentals.
- Whether one owner holds a large share of units.
- The association's budget, reserves, insurance and any litigation.
Projects that look like hotels, sometimes called condotels, fall outside many DSCR programs. Some specialty programs will lend there, usually on different terms. Resort-area condos in Scottsdale and near-campus buildings in Tempe both deserve this check before you make an offer.
Practical steps before you make an offer
- Ask the listing agent for the CC&Rs, rules and regulations, and any rental policy.
- For condos, ask for the building name and the association's contact so a lender questionnaire can be completed.
- Search the documents for "lease," "rental," "transient," "30 days" and "hotel."
- Ask whether any amendments about rentals are being discussed.
- Send the building or community name to us early so we can check program eligibility.
Where HOA restrictions are less common
Older central Phoenix neighborhoods, including much of the Arcadia and Camelback area, often have no HOA. Many Tempe single-family neighborhoods are similar. Newer master-planned communities, gated north Scottsdale enclaves and condo buildings are where restrictions are most common. But check every property; there is no shortcut.
What lenders may ask for from the association
On a condo, the lender often sends the association a project questionnaire. Answers cover owner-occupancy and investor shares, delinquent dues, reserves, insurance, litigation, commercial space and rental rules. Some associations take time to reply or charge a fee, so request it early.
On a single-family home in an HOA, lenders usually need less: the rental clause, proof of dues status and sometimes a statement from the association that short-term rentals are allowed. If the community requires its own STR registration, keep a copy of that approval with your city and TPT documents.
If the answers look borderline, we can check which wholesale programs are comfortable with the project before you spend money on an appraisal.
Keep the association documents after closing, too. On a future cash-out or rate/term refinance, a lender will ask the same questions again, and any rule changes since you bought will matter.
If the HOA blocks STRs
You still have options. If the numbers work on a long-term lease, a long-term rental DSCR loan may fit. For all Arizona DSCR options including long-term rentals, see dscrloanarizona.com. If short-term income is the whole plan, look for a different property. Either way, send us the scenario and we will tell you what fits.
Questions investors ask
Can an Arizona HOA stop me from running a short-term rental?
Yes, potentially. A.R.S. § 9-500.39 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. Read the rental clause before you make an offer.
Is a Scottsdale condo in a resort-style building financeable as an STR?
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 that have a high share of short-term units, can fall outside many DSCR programs. Send the building name early so we can check program eligibility.
This guide summarizes rules generally and is not legal or tax advice. Check current Phoenix, Scottsdale, Tempe and HOA rules before you buy. Nothing here is a commitment to lend.