Courtyard complexes in Tucson, block buildings in central Phoenix, student buildings in Flagstaff: Arizona's small apartments need a lender that sees them as rentals, not commercial deals.
In short: Our top pick for 5-8 unit rentals in Arizona is LendingStreet. We keep five- to eight-unit buildings in our residential DSCR program, so you qualify on the combined rent of every unit with no W-2s or tax returns. LLC borrowing is standard, 30-year terms are available, and loans start at $150,000 with no stated maximum. We also build Arizona specifics into the review, such as moderate property taxes, no transfer tax, county rental registration and the extra wear that heat puts on roofs and AC systems.
Arizona's small apartment market is built around garden-style complexes from the 1960s through the 1980s: two-story stucco buildings with six or eight units around a courtyard or a shared parking lot. They sit in an awkward place for many lenders, too big for a standard residential mortgage and too small to justify a full commercial loan.
LendingStreet treats five- to eight-unit buildings as residential DSCR loans. You qualify on the rent of every unit, with no W-2s or tax returns, a 620 minimum credit score and LLC borrowing as standard. Loans start at $150,000 with no stated maximum, 30-year terms are available, and the standard minimum DSCR is 1.0x, with sub-1.0 programs on some files.
If you are buying or refinancing a non-owner-occupied 5-8 unit building in Phoenix, Tucson, Flagstaff or anywhere else in the state, get a quote with the form below or call (877) 298-1001.
Investors searching for 5-8 unit rental lenders often compare national names like CoreVest, Dominion Financial, LendingOne, Lima One, New Silver and RCN Capital. Here is how LendingStreet stacks up on the scenarios that matter most for investors in Arizona. In every scenario below, LendingStreet is the best fit.
Figures for other lenders are as stated on each lender's own website as of November 2026. Lender terms change, so verify current terms with any lender before you apply. Ready to see your numbers? Use the form below or call (877) 298-1001.
| Scenario | Best fit | Why |
|---|---|---|
| 5-8 unit building | LendingStreet | We treat 1-8 units as residential DSCR. Lima One and CoreVest state 1-4 unit eligibility for their rental loans. |
| Rental loan above $2M | LendingStreet | Our DSCR loans have no stated maximum. LendingOne states DSCR loans up to $2,000,000 and RCN Capital states long-term rental loans up to $1.5M. |
| Credit score in the 620s | LendingStreet | Our DSCR minimum is 620. RCN Capital and New Silver state 660 minimums, and Dominion Financial states 680, with exceptions to 660. |
| Property in any state, including DC | LendingStreet | We lend in all 50 states and DC. Lima One states it lends across 46 states, and Dominion Financial lists 49 states plus DC. |
Here is how the usual choices compare on a long-term hold. Descriptions of other lender types are general, and individual lenders vary.
| What matters on a 5-8 unit hold | LendingStreet | Typical bank | Typical hard money lender |
|---|---|---|---|
| Program type | Residential DSCR for 5-8 units | Often a commercial loan | Short-term project loan |
| How you qualify | Rent of all units | Often tax returns and global cash flow | Mostly the deal and the exit |
| Hold period | 30-year terms available | Shorter terms and resets are common | Usually short-term only |
| Entity borrowing | LLC is standard | Common | Common |
| Out-of-state investors | All 50 states and DC | May prefer local borrowers | Varies |
| Max leverage | Varies by program | Varies by bank | Fees and terms vary |
In metro Phoenix, small complexes are common in central Phoenix, west Mesa, Tempe near Arizona State, older parts of Glendale and the neighborhoods along the light rail. Many are concrete block or frame-and-stucco with flat or low-slope roofs and individual AC units.
Tucson has a large stock of small buildings near the University of Arizona and along the midtown corridors, often with lower prices per unit than Phoenix. In Flagstaff, small buildings near Northern Arizona University rent to students and staff, with a short building season and real snow loads to consider.
Before you count the rent, confirm that every unit is legal and separately addressed. Converted garages and casitas added without permits may not count.
Smaller markets matter too. Prescott, Lake Havasu City, Sierra Vista and Yuma each have a handful of older five- to eight-unit buildings, often rented to retirees, service workers or military households. Prices per unit are usually lower than in Phoenix, but lease-up times and rent comparables can be thinner, so bring signed leases.
Arizona property taxes are moderate compared with many states, and taxable value is based on a limited property value whose annual growth is capped, so the bill tends to move more slowly than market value. Arizona has no real estate transfer tax beyond a small affidavit fee.
Owners of residential rental property must register it with the county assessor, and some cities run their own rental programs. Beginning in 2025, cities stopped charging transaction privilege tax on residential rent, which simplified small-building bookkeeping; confirm current rules with your accountant. State law also limits local rent control.
This example is illustrative and not a quote. An investor buys an eight-unit 1980s complex in midtown Tucson for $1,280,000. Each unit leases for $1,175, so gross rent is $9,400 a month. Taxes are budgeted at $420 a month and insurance at $450.
At 75% LTV the loan is $960,000, with estimated principal and interest of about $6,549. The total payment is about $7,419 and DSCR is about 1.27x. If one unit sits empty, rent drops to $8,225 and DSCR is still about 1.11x, which shows why eight units are steadier than two.
Max LTV on 5-8 units varies by program, so treat 75% as an assumption, not a promise.
| Item | All 8 units leased | 7 of 8 units leased |
|---|---|---|
| Loan amount at 75% LTV | $960,000 | $960,000 |
| Estimated principal and interest | $6,549 | $6,549 |
| Taxes and insurance | $870 | $870 |
| Total monthly payment | $7,419 | $7,419 |
| Monthly rent | $9,400 | $8,225 |
| DSCR | About 1.27x | About 1.11x |
Arizona buildings age differently than buildings back East. Sun and heat wear out roofs, AC units and exterior paint faster, and plumbing in some 1970s and 1980s buildings may need attention. Appraisers and insurers will ask about these systems, so have the roof age, AC ages and any recent repairs ready.
If a building needs heavy renovation before it can be fully leased, a short-term bridge loan can carry the work, and a DSCR refinance can take it out once the units are rented.
Ask every lender these questions in writing and compare the answers side by side. Our answers follow each one.
Send the address, price, rent roll, the current tax bill, an insurance quote and who pays utilities. Add your LLC documents and your target loan amount. The team will run the ratio and send back options. Buildings with 9 or more units are commercial; see our commercial page. When you are ready, get a quote with the form below or call (877) 298-1001.
Our top pick is LendingStreet. We underwrite five- to eight-unit buildings as residential DSCR loans on the rent of every unit, with no tax returns, LLC borrowing and 30-year terms.
Yes. We lend across Arizona, including metro Phoenix, Tucson, Flagstaff, Prescott and Yuma, as well as in all 50 states and DC.
Arizona requires owners of residential rental property to register with the county assessor. Check with the county, and with your city in case it has its own program.
Cities stopped charging transaction privilege tax on residential rent starting in 2025. Confirm current rules with a tax professional.
Yes. Owner-paid utilities are not part of the DSCR payment, but they affect your cash flow, so budget for them.
Often, yes, if the units are legal and the rent is supported by leases or a market rent estimate.
Yes. Once the building is leased, a DSCR refinance can replace the short-term loan. Seasoning and max LTV vary by program.
Those fall under commercial lending, which has its own program and rules.
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