Metro Phoenix has a deep stock of small block-built apartment courts from the 1950s through the 1980s. Many sit on single lots in central Phoenix, Tempe and Mesa, and they trade often between investors who want more doors than a fourplex without crossing into commercial lending.
In short: Yes. LendingStreet finances 5-8 unit residential buildings across metro Phoenix with DSCR loans that qualify on the building's combined rent, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, and leverage on 5-8 units varies by program. In Phoenix the numbers usually turn on cooling costs, roof condition and whether the owner pays water and trash.
The classic Phoenix small apartment is a one-story or two-story block building wrapped around a courtyard or a shared parking lot. You find them in Encanto, Coronado, Garfield and the older grids north of Indian School Road, plus around Grand Canyon University in west Phoenix and along the light rail toward Tempe and Mesa.
Tempe buildings near Arizona State lease heavily to students and young workers. Mesa, Glendale and the older parts of Scottsdale add more courts and small two-story walk-ups with longer-term tenants.
| Submarket | Common building | Typical tenant base |
|---|---|---|
| Central Phoenix (Encanto, Coronado, Garfield) | 1950s-60s block courts, 5-8 units | Downtown and hospital workers |
| Tempe near ASU | Two-story walk-ups, 6-8 units | Students and recent graduates |
| Mesa and Glendale | Courtyard buildings and small complexes | Long-term working households |
| Older south Scottsdale | 1960s-70s small buildings | Service and hospitality workers |
Many Phoenix courts have flat or low-slope roofs with foam or built-up coatings, and the roof age shows up in both the insurance quote and the appraisal. Each unit usually has its own AC or heat pump, and in a Phoenix summer a failing unit is an emergency, not a maintenance item.
Older buildings sometimes run water on a single master meter with the owner paying the bill. If that is the case, the water, sewer and trash cost reduces what the building nets, so get twelve months of utility bills before you set your offer.
A building with five to eight units is still residential for our DSCR programs, so it qualifies on the property's rent rather than your personal income. There are no W-2s or tax returns to collect, LLC borrowers are standard and the minimum credit score is 620. Loans start at $150,000 with no stated maximum, and 30-year terms are available.
The ratio is the combined monthly rent of every unit divided by the full monthly payment: principal, interest, taxes and insurance. The standard minimum is 1.0x, and sub-1.0 programs exist for buildings that fall a little short. Maximum LTV on 5-8 unit buildings can be lower than the 80% purchase and 75% cash-out ceilings that apply to smaller rentals; it varies by program.
Expect the appraiser to review the rent roll unit by unit and compare each rent with similar units nearby. Leases well above the local market can be questioned, and vacant units need a supportable rent figure, so a clean rent roll matters as much as the purchase price.
Arizona property taxes are moderate compared with many states. Residential rentals are generally classified as Class 4 with a 10% assessment ratio, and the limited property value that drives most of the bill can only rise by a set percentage each year, so taxes do not jump to the purchase price the way they can elsewhere. Check the Maricopa County Assessor record for the current figures.
Arizona law requires owners of residential rental property to register it with the county assessor, and cities can layer on their own rules. Arizona cities stopped charging the transaction privilege tax on residential rent beginning in 2025; confirm current treatment for your building.
This example is illustrative and not a quote. An investor buys a 1960s six-unit block court near Encanto for $1,350,000. The six one-bedroom units rent for $1,350 each, for a combined $8,100 a month. Taxes are budgeted at $517 a month and insurance at $650.
At 75% LTV the loan is $1,012,000, estimated principal and interest is about $7,076 and the total payment is about $8,243, for a DSCR of about 0.98x. At 70% LTV the loan drops to $945,000, the payment to about $7,774 and the DSCR rises to about 1.04x. Low Arizona taxes help, but the price per door is high enough that the building only clears 1.0x with a larger down payment, or on a sub-1.0 program.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $1,350,000 | $1,350,000 |
| Combined monthly rent | $8,100 | $8,100 |
| Loan amount | $1,012,000 | $945,000 |
| Estimated principal and interest | $7,076 | $6,608 |
| Taxes and insurance | $1,167 | $1,167 |
| Total monthly payment | $8,243 | $7,774 |
| DSCR | About 0.98x | About 1.04x |
Phoenix does not carry hurricane premiums, but summer monsoon storms bring wind, dust and sudden flooding in some washes and low streets. Insurers focus on roof age, wiring in older buildings and any history of water claims.
Ask for a full-building quote early and confirm whether the property sits in a mapped flood zone. Fire separation between units and pool fencing, where there is a pool, are also common carrier questions.
Many Phoenix buyers of 5-8 unit courts plan a light renovation: new flooring, updated kitchens and individual meters where the city allows it. Once rents are raised to market, a cash-out refinance can pull equity back out, subject to program seasoning.
Others hold for long-term appreciation in central neighborhoods where new construction is pushing land values up. Either way, the DSCR on the day you close has to stand on the rents in place or the documented market rent.
Have these on hand when you request a quote.
Our investor loans are business-purpose loans on non-owner-occupied property. To get a quote, use the form below or call (877) 298-1001 with the address, units, current rents and price.
The LendingStreet team will check the ratio against a realistic tax and insurance budget and show what loan amount the rent supports. Investors comparing markets can also read our Arizona 5-8 unit DSCR page.
Arizona requires residential rental property to be registered with the county assessor. Check with Maricopa County and the city for any additional local requirements.
Not in the way they do in some states. Arizona limits how much the limited property value can rise each year. Use the assessor record, not a percentage of price, to budget.
Yes, if it has 5-8 units and the leases support the payment. Expect questions about lease terms and turnover.
That cost reduces the building's net income and should be in your budget. Bring the utility bills so the numbers are realistic.
Yes. Once units are leased at higher rents, a cash-out refinance up to the program limit can return capital, subject to seasoning rules.
On our DSCR programs, 1 to 8 units is residential. Nine or more units is commercial and is covered on our multifamily pages.
No. A DSCR loan qualifies on the property's rent. We do not collect W-2s or tax returns. The credit score minimum is 620.
You can bring more cash to lower the loan amount, or look at a sub-1.0 DSCR program if the numbers are close.
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