Salt Lake City has a rental feature many metros lack: a large stock of homes with basement apartments, many of them now legal under state law. A second rent under the same roof can be the difference between a property that qualifies and one that does not.
In short: For Salt Lake City investors, LendingStreet writes DSCR loans that use the property's rent to qualify, so no tax returns or W-2s are needed and the loan can close in an LLC. Loans start at $150,000 with no stated maximum, with up to 80% LTV on purchases, up to 75% LTV on cash-out and a 620 minimum score. Utah's residential exemption, legal accessory units, Salt Lake City's short-term rental limits and earthquake exposure are the local items to check first.
In the city, Sugar House, Liberty Wells, Central City and the Avenues have older bungalows and small apartment buildings, while Rose Park, Glendale and Poplar Grove on the west side have lower prices. The University of Utah supports demand on the east bench.
Most single-family rental investors buy in West Valley City, Taylorsville, West Jordan, Murray, Midvale and Magna, where homes with basement units are common. South Jordan, Herriman and Draper are newer and pricier. Davis County to the north and Utah County to the south are separate markets.
| Area | Typical rental stock | What to check |
|---|---|---|
| Sugar House and Liberty Wells | Bungalows, duplexes, small apartment buildings | High prices relative to rent |
| Rose Park, Glendale, Poplar Grove | Smaller older homes | Condition, rent comps |
| West Valley City and Taylorsville | Ranch homes with basement apartments | Legality of the second unit |
| South Jordan and Herriman | Newer subdivisions | HOA rules, higher prices |
Many Salt Lake County homes were built with full basements, and a large number have been finished as separate apartments. A 2021 Utah law requires most cities to allow internal accessory dwelling units in owner-occupied single-family homes, which changes the picture for an investor-owned rental. Confirm with the city whether the second unit is legal for your use, and expect the appraiser to count only rent the property can legally produce.
Prices in the city are high relative to rent, so a single-family home at 80% LTV often lands near 1.0x. A legal second unit, a duplex or a slightly larger down payment usually solves it.
Utah taxes a primary residence on only part of its value through the residential exemption, and a long-term rental occupied as a tenant's primary residence can generally qualify too. Short-term rentals, second homes and vacant properties generally do not. Counties may ask you to sign a declaration, so file it to keep the exemption, and underwrite taxes accordingly.
Utah does not charge a real estate transfer tax, and it is a non-disclosure state, so sale prices are not public and appraisers rely on agent data for comparable sales. Title and recording costs are separate.
The Wasatch Fault runs along the east side of the valley, and older unreinforced masonry homes face the most earthquake risk. Earthquake coverage is separate from a standard policy. Winters bring snow loads and freeze risk, and foothill homes face some wildfire exposure.
Salt Lake City restricts short-term rentals in many residential zones, and other cities in the county have their own rules, while ski-area towns such as Park City have separate regimes. Do not underwrite a Salt Lake City purchase on nightly income unless the address clearly allows it.
Utah landlord-tenant law sets the basics, and some cities require business licenses for rentals. Most DSCR loans in the valley use 12-month leases, with both units of a legal duplex or accessory unit leased separately.
This example is illustrative and not a quote. An investor buys a West Valley City rambler with a legal basement apartment, with both units leased.
The purchase price is $485,000 and the rent is $3,000 a month. At 80% LTV the loan is $388,000, so the down payment is $97,000 before closing costs. Estimated principal and interest on a 30-year loan comes to about $2,647, and taxes and insurance add $335, for a total payment of about $2,982. Rent divided by that payment gives a DSCR of about 1.01x, above the 1.0x standard minimum.
At 75% LTV the loan drops to $363,750, the payment falls to about $2,816 and the DSCR rises to about 1.07x. The investor brings $24,250 more to closing, which is the usual trade in a market where prices run high relative to rent.
| Item | 80% LTV purchase | 75% LTV purchase |
|---|---|---|
| Purchase price | $485,000 | $485,000 |
| Loan amount | $388,000 | $363,750 |
| Estimated principal and interest | $2,647 | $2,481 |
| Property taxes | $230 | $230 |
| Insurance | $105 | $105 |
| Total monthly payment | $2,982 | $2,816 |
| Monthly rent | $3,000 | $3,000 |
| DSCR | 1.01x | 1.07x |
A DSCR loan sizes the deal on cash flow. Rent is compared with the full monthly payment, including taxes, insurance and any association dues, and standard programs want that ratio at 1.0x or above. Sub-1.0 programs can help when the numbers land just under.
Small multifamily counts the rent from every unit: duplexes, triplexes and fourplexes, plus 5 to 8 unit buildings with leverage that varies by program. Properties with 9 or more units are commercial. Our Utah DSCR page covers investors buying elsewhere in the state.
Our investor loans are business-purpose loans on non-owner-occupied property. Start with the property address, price, rent and how much you want to borrow; we will size the loan against a realistic payment and send back options. Get a quote with the form below or call (877) 298-1001.
If the unit is legal for your use and the appraiser can support its rent, yes. Confirm with the city and bring both leases.
Generally, yes, when the tenant lives there as a primary residence. Short-term rentals and second homes generally do not. Counties may require a signed declaration.
Salt Lake City restricts STRs in many residential zones. Check the zoning for the exact address before counting on nightly income.
It is usually optional and separate. Many investors price it, especially for older brick homes.
Yes. LLC borrowers are standard on DSCR loans. You sign for the loan personally and provide the operating agreement and formation documents.
Standard programs look for 1.0x or higher, meaning rent at least covers the full payment. Sub-1.0 programs exist for properties that fall slightly short.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so a home you live in does not qualify.
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