Across metro Phoenix and Tucson, small multifamily ranges from 1950s block duplexes near downtown to newer fourplexes in Mesa and Tempe. Investors use DSCR loans here because the rents, not their tax returns, carry the file.
In short: Yes. LendingStreet finances duplexes, triplexes and fourplexes across Arizona with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and cash-out up to 75% LTV, and the standard minimum DSCR is 1.0x with a 620 minimum credit score. Before closing in Arizona, plan to register the rental with the county assessor and budget for one air conditioning system per unit.
In metro Phoenix, older block duplexes and fourplexes sit in central Phoenix neighborhoods such as Coronado, Garfield and the areas around Grand Avenue, as well as in Tempe near Arizona State University, west Mesa and Glendale. Newer fourplexes and build-to-rent duplexes have gone up in the East Valley and the far West Valley.
Tucson has a large stock of small multifamily near the University of Arizona, in Sam Hughes, Jefferson Park and Feldman's, with plenty of 1960s and 1970s fourplexes across midtown. Flagstaff's market is driven by Northern Arizona University and tight land supply, so prices are higher and listings fewer.
| Area | Typical 2-4 unit stock | What to check |
|---|---|---|
| Central Phoenix and Glendale | 1950s-1970s block duplexes and fourplexes | HVAC age per unit; roof type |
| Tempe and Mesa | Student and workforce fourplexes; newer builds | Rent by unit vs by bedroom; HOA in newer projects |
| Tucson midtown and university area | 1960s-1970s fourplexes and casitas | Older plumbing; student turnover |
| Flagstaff | Small buildings near NAU | Higher prices, snow load, wildfire insurance |
The debt service coverage ratio compares the building's gross monthly rent with its monthly housing payment. On a duplex, triplex or fourplex, that rent is the total from all units, and the payment includes principal, interest, taxes, insurance and HOA dues where they apply.
Leases on occupied units are compared with the appraiser's rent survey, and a vacant unit is usually counted at market rent. Because the loan qualifies on the property, there are no W-2s or tax returns, and borrowing in an LLC is standard.
Run the numbers with figures you can verify. For a Arizona purchase, that means taxes estimated for an investor owner, a written insurance quote covering every unit, and rents that match the leases or the local market, so the ratio holds up in underwriting.
Arizona taxes most rental homes and small multifamily as Class 4 residential rental property. Owner-occupied homes in Class 3 get a homeowner rebate on school taxes that rentals do not, so a building that was owner-occupied will usually see a higher bill once it becomes a rental. Taxes are figured on a Limited Property Value that rises gradually, which keeps bills fairly predictable.
Arizona does not charge a real estate transfer tax, so closing costs are mainly title, escrow and recording. Cities had long charged a transaction privilege tax on long-term residential rent, but state law ended that for long-term rentals starting in 2025; confirm the current rules with your city and the state revenue department.
This example is illustrative and not a quote. An investor buys a 1960s block fourplex in central Phoenix for $780,000. Rent is $1,350 per unit, or $5,400 a month across all four units. Taxes are low relative to price, which helps the ratio.
At 80% LTV, the loan is $624,000, estimated principal and interest is about $4,151, taxes are $250 a month and insurance is $250, for a total payment of about $4,651 and a DSCR of about 1.16x. The building clears the 1.0x standard minimum. Set aside reserves for HVAC replacements, which are outside the DSCR math but very real in Phoenix.
| Item | Amount |
|---|---|
| Purchase price | $780,000 |
| Combined monthly rent | $5,400 |
| Loan amount (80% LTV) | $624,000 |
| Estimated principal and interest | $4,151 |
| Property taxes (monthly) | $250 |
| Insurance (monthly) | $250 |
| Total monthly payment | $4,651 |
| DSCR | About 1.16x |
Arizona has no hurricane or major earthquake risk, which helps premiums, but summer monsoon storms bring wind, hail and flash flooding to parts of the Valley and Tucson. The bigger budget item is cooling: each unit usually has its own air conditioner, and replacing four aging units at once is expensive. Flat or foam roofs on older block buildings also need regular coating. Ask for HVAC ages and roof history during due diligence.
Arizona law requires owners of residential rental property to register it with the county assessor, and the record must be updated when ownership changes. Some cities add their own rental programs or crime-free housing requirements. The state's residential landlord and tenant act governs deposits, notices and repairs, and Arizona does not allow local rent control.
If you plan to use one unit as a furnished short-term rental, state law limits how far cities can restrict STRs, but many cities now require permits; check before you count nightly income.
Two to four units are residential for DSCR purposes, and the same core terms apply: loans from $150,000 with no stated maximum, up to 80% LTV on a purchase and up to 75% on a cash-out refinance. Each added unit spreads vacancy risk, since one empty unit hurts a fourplex less than a duplex.
Buildings with five to eight units are still residential but are often underwritten with more review, and max LTV can be lower; terms vary by program. Nine or more units are commercial and fall under our multifamily programs.
Gather these before you apply.
Our investor loans are business-purpose loans on non-owner-occupied property, and we finance duplexes, triplexes and fourplexes throughout Arizona. Tell us the address, purchase price or value, current rents and your goal, and the team will size the loan on the property's actual numbers. Use the form below to get a quote, or call (877) 298-1001.
Yes. Arizona requires residential rental property to be registered with the county assessor, and you should update the registration when you buy.
No. Arizona does not charge a real estate transfer tax. You will pay title, escrow and recording costs.
Yes. We qualify on the combined rent of all units. Student properties can have higher turnover, so a clean rent roll and current leases help.
Many do, because Arizona taxes are low relative to price. Older buildings with high insurance or deferred HVAC work may need a lower loan amount to clear 1.0x.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the borrower cannot live in any unit.
Up to 75% of appraised value, minus the payoff and closing costs, if the rent still clears the program minimum at the new payment. Seasoning varies by program.
No. DSCR loans qualify on the building's rent, not your personal income. Expect a 620 minimum credit score, reserves and LLC documents if you use an entity.
Usually at market rent from the appraisal. Programs vary, so a signed lease on the vacant unit can help if the ratio is close.
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