Santa Fe home prices run well ahead of what a single household will pay in long-term rent. The rentals that clear a DSCR test here often have something extra on the lot: a casita, a guest house or a second unit.
In short: LendingStreet makes DSCR loans on 1-8 unit rentals in Santa Fe and across Santa Fe County, qualifying on the property's rent 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, the minimum credit score is 620 and the standard minimum DSCR is 1.0x. Because prices are high relative to rents, Santa Fe investors often qualify best on properties with more than one unit.
Santa Fe has a tight long-term rental market. State government, Christus St. Vincent Regional Medical Center, Santa Fe Public Schools, tourism and the arts, a growing film industry and commuters to Los Alamos National Laboratory all need housing, while a large share of homes are second homes or short-term rentals. Long-term rents are high for the region, but home prices are higher still.
Investors generally think about the city in rings. The historic core, Eastside and Canyon Road area, South Capitol and the Railyard and Guadalupe neighborhoods have the highest prices and the most historic-district rules. Midtown neighborhoods like Casa Solana, Bellamah and Casa Alegre have 1950s to 1970s homes that rent well to local workers. The Southside, along Airport Road and in Tierra Contenta, has newer, more affordable homes. Beyond the city, Rancho Viejo, Eldorado and Las Campanas each have their own price levels, water systems and HOA rules.
| Area | Typical rental | Price vs rent | What to check |
|---|---|---|---|
| Eastside, Canyon Road, South Capitol | Adobe homes, compounds, casitas | Highest prices; thin long-term yields | Historic district rules, STR permits |
| Casa Solana, Bellamah, Casa Alegre | 1950s-1970s homes, some with casitas | Better balance for long-term rentals | Flat roofs, older systems |
| Southside, Tierra Contenta | Newer homes and townhomes | Most affordable in the city | HOA rules, rent comps |
| Rancho Viejo, Eldorado | Newer homes on larger lots | Moderate to high | Water system or well, HOA leasing rules |
Many Santa Fe properties include a casita or guest house, either original or added later. When it is a legal, separately rentable unit, its rent counts toward qualifying income alongside the main house. Taxes and insurance rise only a little, so the extra rent goes almost straight into the ratio.
Make sure the second unit is legal. The city allows accessory dwelling units in many residential zones, subject to standards, but older casitas were sometimes built or converted without permits. The appraiser will note whether the unit appears legal and has its own kitchen, bath and entrance, and that affects whether its rent can be used.
This example is illustrative and not a quote. Property A is a three-bedroom Casa Solana home bought for $520,000 and leased at $2,900 a month. Taxes are budgeted at $350 and insurance at $170. At 75% LTV the loan is $390,000, estimated principal and interest is about $2,727, the total payment is about $3,247 and DSCR is about 0.89x, short of 1.0x.
Property B is a similar home with a permitted one-bedroom casita, bought for $560,000. The main house rents for $2,600 and the casita for $1,400, $4,000 in total. Taxes are $375 and insurance $190. At the same 75% LTV the loan is $420,000, estimated principal and interest is about $2,937, the payment is about $3,502 and DSCR is about 1.14x.
| Item | A: home only, 75% LTV | B: home plus casita, 75% LTV |
|---|---|---|
| Purchase price | $520,000 | $560,000 |
| Loan | $390,000 | $420,000 |
| Monthly rent | $2,900 | $4,000 |
| Estimated principal and interest | $2,727 | $2,937 |
| Taxes | $350 | $375 |
| Insurance | $170 | $190 |
| Total payment | $3,247 | $3,502 |
| DSCR | 0.89x | 1.14x |
New Mexico taxes residential property on one-third of its assessed value, and for most residential property, annual valuation increases are capped at 3% while the same owner holds it. When a property sells, the county reassesses it at current market value. A seller who has owned a Santa Fe home for twenty years may have a very low tax bill that will not carry over to you.
Budget taxes on your purchase price, using the one-third taxable value and the current levy for the tax district, and confirm with the Santa Fe County Assessor. New Mexico has no real estate transfer tax, which helps keep closing costs down.
Pueblo Revival and Territorial homes have flat roofs with parapets and canales, and those roofs need regular recoating and careful drainage. Insurers and appraisers ask about roof condition. Stucco cracks from freeze-thaw cycles at Santa Fe's elevation, and many older homes have radiant floor heat from a boiler and evaporative coolers rather than central air.
Homes in the foothills and on wooded lots sit in wildfire risk areas, where insurance can cost more and carriers may want defensible space. Get a quote before you go under contract.
The city of Santa Fe requires permits for short-term rentals of less than 30 days and caps the number of permits for units in residential zones that are not owner-occupied; those permits have been in short supply. Santa Fe County has its own rules. Check current availability before you plan on nightly income. Some programs qualify STRs on projected revenue where a permit is in place.
Many investors use furnished leases of 30 days or more for traveling nurses, film crews and lab contractors instead. Those count as longer-term rentals for city purposes, but confirm with the city, and the loan will usually rely on a market rent estimate.
DSCR loans work for purchases, rate-and-term refinances and cash-out on 1-8 unit rentals. LLC borrowers are standard, and you sign for the loan personally.
Inside the city, most homes use city water and sewer. Out in the county, many homes rely on domestic wells permitted by the New Mexico Office of the State Engineer, shared wells or community water systems, and on-site septic. Lenders and insurers may ask for a water test, a shared well agreement or septic information, so gather them early.
Send the address, price, rent for each unit, a tax estimate on your purchase price and an insurance quote through the form below, or call (877) 298-1001. We will run the ratio at a few loan amounts and tell you where it clears. Our investor loans are business-purpose loans on non-owner-occupied property. Our New Mexico DSCR page covers Albuquerque, Las Cruces and the rest of the state.
Home prices are high relative to long-term rents. Properties with a legal casita or second unit, lower leverage, or sub-1.0 programs are the usual solutions.
Yes, if the casita is a legal, separately rentable unit. The appraiser will look at whether it has its own kitchen, bath and entrance.
Usually. New Mexico caps annual valuation increases for most residential property, but the county reassesses at market value after a sale.
Only if the property has or can get the required permit. The city caps non-owner-occupied STR permits in residential zones, so check availability first.
Yes. We lend on 1-8 unit rentals throughout Santa Fe County and the rest of New Mexico.
Not by itself. Expect questions about the well permit, water quality and any shared well agreement.
No. New Mexico has no real estate transfer tax, though normal title and closing costs apply.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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