Phoenix, Mesa, Tucson and the surrounding suburbs are full of investors who bought with short-term money and now want a long-term loan. A DSCR rate-and-term refinance pays off that loan and fixes the payment, qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Arizona, up to 80% LTV on some programs, qualified on the property's rent with no W-2s or tax returns. The new loan pays off your existing hard money, bridge or higher-rate loan plus closing costs, with only a small amount of cash back allowed on most programs. Our investor loans are business-purpose loans on non-owner-occupied property, starting at $150,000 with a 620 minimum credit score. In Arizona, HOA dues in master-planned communities and the property's insurance quote are the lines that move the ratio most.
This kind of refinance swaps one loan for another. The new loan pays off the old one plus closing costs, and the cash you can receive at closing is limited to a small allowance that varies by program. Anything more is treated as a cash-out refinance with a lower LTV ceiling.
The appeal is leverage and terms. Some programs allow up to 80% LTV on a rate-and-term, and 30-year terms are available. The file is underwritten on the property's rent compared with the new payment, with a standard minimum DSCR of 1.0x and a 620 minimum credit score.
Arizona rental stock is dominated by stucco single-family homes built from the 1980s onward, many inside HOAs, plus older block homes in central Phoenix and Tucson. Flippers and BRRRR investors buy with hard money, renovate and refinance. Investors who bought when financing was expensive also use rate-and-term refinances to swap a higher-rate loan or an adjustable loan for a fixed payment.
Because the loan qualifies on rent, the refinance does not depend on your personal income, which matters to investors whose tax returns show heavy depreciation or self-employment write-offs. The property has to carry itself, and that is the test.
The most common rate-and-term refinance we see is the exit from short-term debt. You bought with a hard money or bridge loan, finished the work, placed a tenant and now need permanent financing before the short-term loan comes due. The bridge-to-DSCR guide walks through timing in more detail.
How the new loan is sized depends partly on how long you have owned the property. Some programs use the new appraised value after a period of ownership; others cap the loan near your cost basis if you bought recently. Seasoning rules vary by program, so check them before you count on the after-repair value.
Arizona does not charge a percentage transfer tax on deeds or a mortgage recording tax. Recording fees are modest, so most of the cost is title, escrow, appraisal and lender charges. Arizona uses deeds of trust and escrow companies handle most closings.
If you are moving the property into an LLC as part of the refinance, Arizona deeds usually need an affidavit of property value at recording, and some transfers are exempt. Your escrow officer can confirm what applies.
Property taxes in Arizona are moderate. Rentals do not get the primary residence classification, so the tax bill on a recently bought rental may change after the county reclassifies it. Check the current bill and the county assessor record.
HOA dues are common in Mesa, Gilbert, Chandler, Queen Creek and Surprise, and they count in the DSCR payment. Pools can raise insurance premiums, and roof age on tile and foam roofs comes up in underwriting. Some HOAs also restrict leasing terms, so review the rules before relying on a lease.
This example is illustrative and not a quote. An investor owns a four-bedroom single-family rental in an HOA in Mesa appraised at $430,000. The existing hard money loan from a recent rehab has a payoff of $318,000, costs about $2,780 a month interest-only and matures in 3 months. Rent is $2,700 a month, and taxes, insurance and any HOA dues run $320 a month.
Rolling about $8,000 of closing costs into the loan gives a new balance of $326,000, or about 75.8% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $2,196, so the full payment is about $2,516 and the DSCR is about 1.07x. The short-term maturity is gone and the payment is fixed. That ratio is close to the 1.0x minimum, so a higher insurance quote or tax bill could push it under; check both before you apply.
| Item | Amount |
|---|---|
| Appraised value | $430,000 |
| Existing loan payoff | $318,000 |
| Closing costs rolled in | $8,000 |
| New loan amount | $326,000 |
| Loan-to-value | 75.8% |
| Principal and interest (30 years) | About $2,196 |
| Taxes, insurance and HOA | $320 |
| Total monthly payment | About $2,516 |
| Monthly rent | $2,700 |
| DSCR | About 1.07x |
Both are qualified on rent, but the purpose drives the limits. A quick side-by-side helps decide which one fits the property.
Some investors in Arizona do both in stages: a rate-and-term refinance to exit short-term debt now, then a cash-out later once seasoning and value support it. Others go straight to cash-out if the appraisal is strong and they need capital for the next deal.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing loan and costs | Pay off loan and take equity |
| Maximum LTV | Up to 80% on some programs | Up to 75% |
| Cash at closing | Small allowance, varies by program | Up to the LTV limit |
| Minimum DSCR (standard) | 1.0x | 1.0x |
| Minimum credit score | 620 | 620 |
| Income documents | Rent only, no W-2s or tax returns | Rent only, no W-2s or tax returns |
The Phoenix metro, including Mesa, Glendale, Peoria, Gilbert and the West Valley, holds most of the state's single-family rentals. Tucson offers lower price levels and student demand near the University of Arizona. Flagstaff, Sedona and Scottsdale have large short-term rental markets; Arizona law limits outright city bans, but many cities require STR permits or licenses, so confirm local rules before qualifying on nightly income.
These items cover most of what underwriting will ask for. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet refinances non-owner-occupied 1-8 unit rentals in Arizona with DSCR loans starting at $150,000, up to 80% LTV on some programs.
No percentage transfer tax or mortgage tax applies on a typical Arizona refinance. Expect recording fees plus title, escrow, appraisal and lender costs.
Most programs allow a small amount of cash back at closing, but the limit varies. Taking more turns the loan into a cash-out refinance, which has a 75% LTV ceiling.
Yes. HOA dues are part of the monthly payment used in the ratio, so higher dues lower the DSCR. Leasing restrictions in the HOA rules can also matter.
Seasoning varies by program. Recently purchased properties may be sized on purchase price plus documented improvements rather than the new appraised value.
Often, yes, through a short-term rental DSCR program that qualifies on revenue. Confirm the property holds any required city STR permit or license first.
Standard programs need at least 1.0x. Sub-1.0 DSCR programs exist, or you can lower the balance by bringing cash to closing.
Yes. 30-year terms are available on DSCR loans, which is the main reason investors use a rate-and-term refinance to replace short-term or balloon debt.
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