Tucson's small apartment buildings are mostly one-story block and adobe-style courts built between the 1940s and the 1980s. Prices per unit run well below Phoenix, and buildings near the University of Arizona and the midtown medical corridor rent year-round.
In short: LendingStreet finances 5-8 unit buildings in Tucson, Oro Valley, Marana and the rest of Pima County with DSCR loans that qualify on the 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. Arizona's moderate property taxes help the ratio, while roofs, cooling and owner-paid utilities are the items to check.
The neighborhoods around the University of Arizona, including West University, Jefferson Park, Feldman's and Sam Hughes, have small courts and older houses split into units. Many lease to students and university staff on an August cycle.
Midtown, along Grant Road, Speedway and Broadway, has 1960s and 1970s block courts that lease to hospital workers at Banner University Medical Center and Tucson Medical Center. Armory Park and Barrio Viejo near downtown have historic buildings, and the east side near Davis-Monthan Air Force Base has small buildings leasing to service members and civilian staff.
Oro Valley and Marana to the north have newer, higher-priced stock, and the south side offers the lowest prices per unit in the metro.
| Area | Typical building | Tenant base |
|---|---|---|
| West University and Jefferson Park | Courts and conversions near campus | Students and university staff |
| Midtown corridors | 1960s-70s block courts | Hospital and service workers |
| Armory Park and Barrio Viejo | Historic adobe and brick buildings | Downtown workers |
| East side near Davis-Monthan | Small garden buildings | Military and civilian base staff |
Flat and low-slope roofs with foam or built-up coatings are common, and their age affects both insurance and the appraisal. Many older courts use evaporative coolers instead of refrigerated air, and tenants increasingly expect AC, so budget for upgrades.
Older buildings often have one water meter, with the owner paying water, sewer and trash through Tucson Water and the city. Get a year of bills and subtract them from the rent before you decide what to offer.
Five to eight units is the top of the residential range; nine or more units moves into commercial lending. Inside that range the loan is approved on what the building rents for. No W-2s, no tax returns, a 620 minimum score, LLC ownership allowed, $150,000 minimum loan size with no stated maximum, and 30-year terms available.
The test is simple: total rent from all units divided by principal, interest, taxes and insurance. Most programs look for 1.0x or better, and sub-1.0 programs can work when the numbers are close. Purchase leverage can reach 80% LTV and cash-out 75% on smaller rentals, but on 5-8 unit buildings the maximum is often lower and varies by program.
The rent roll does a lot of the work. The appraiser checks every unit's rent against comparable rentals, and income that looks out of line with the area gets a closer look. Vacant or down units need a realistic rent and a plan for getting them leased.
Arizona classifies most residential rentals as Class 4 with a 10% assessment ratio, and the limited property value that drives the bill can rise only a set amount each year. Taxes in Pima County depend on the school district and other taxing bodies, so check the assessor record for the exact parcel.
Arizona requires owners of residential rental property to register with the county assessor. Cities stopped charging the transaction privilege tax on residential rent beginning in 2025; confirm current treatment.
This example is illustrative and not a quote. An investor buys a 1960s seven-unit block court off Grant Road for $990,000. The one-bedroom units rent for $1,050 each, for a combined $7,350 a month. Taxes are budgeted at $500 a month and insurance at $500.
A 75% LTV loan of $742,000 carries estimated principal and interest of about $5,188. Add taxes and insurance and the payment is about $6,188, a DSCR of about 1.19x. At 70% LTV, the $693,000 loan has a payment of about $5,846 and a DSCR near 1.26x. Low Arizona taxes leave plenty of room. If the owner pays water and trash, subtract that cost before relying on these figures.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $990,000 | $990,000 |
| Combined monthly rent | $7,350 | $7,350 |
| Loan amount | $742,000 | $693,000 |
| Estimated principal and interest | $5,188 | $4,846 |
| Taxes and insurance | $1,000 | $1,000 |
| Total monthly payment | $6,188 | $5,846 |
| DSCR | About 1.19x | About 1.26x |
Summer monsoon storms bring wind, hail and flash flooding. Buildings near washes such as the Rillito, Pantano and Tanque Verde can sit in mapped flood zones, where flood insurance is required.
Insurers ask about roof age, wiring and plumbing. Adobe and older block buildings can raise questions, so get a full-building quote early.
Buildings within walking distance of campus often lease by the academic year, sometimes by the bedroom. Turnover is concentrated in summer, and group leases with parent co-signers are common.
Tucson has rules on the number of unrelated occupants in some zones, and historic districts near campus review exterior changes. Check both before you plan renovations.
Some investors also look for small buildings near Pima Community College campuses and the midtown hospitals, where tenants tend to stay longer than students.
A clean package gets a faster answer on a small apartment building.
LendingStreet makes business-purpose DSCR loans on non-owner-occupied rentals. Our investor loans are business-purpose loans on non-owner-occupied property, and we review 5-8 unit buildings across the Tucson area.
Share the rent roll, the address and your target leverage in the form below or by phone at (877) 298-1001. We will size the loan at more than one LTV so you can see the tradeoff. Our Arizona 5-8 unit DSCR page covers the statewide picture.
Arizona requires residential rentals to be registered with the county assessor. Check with Pima County.
Not usually for the loan itself, but tenants increasingly expect AC, which can affect rents and turnover.
Yes, if it has 5-8 units and the leases support the payment.
Yes. We finance 5-8 unit buildings throughout Pima County.
If the building is in a mapped flood zone, flood insurance is required.
Eight units. Up to eight units fits our residential DSCR programs; nine or more is commercial multifamily.
No. The loan qualifies on the building's rent. There are no W-2s or tax returns, and the minimum credit score is 620.
Sometimes. Sub-1.0 DSCR programs are available, and putting more down is the other common fix.
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