DSCR Loans in Flagstaff, AZ | Pillar Mortgage Group

Pillar Mortgage Group places DSCR loans on Flagstaff rental properties with ratios down to 0.75 and LLC vesting allowed, so the deal is judged on what the property earns against its payment. We are based in Scottsdale and finance investors across Northern Arizona, and the cited numbers below show what it takes for a Flagstaff rental to qualify right now.

Flagstaff by the numbers

Zillow's rent figure is a citywide average, not the rent on the typical valued home, so treat the pairing as a market snapshot rather than a single property.

What it takes to qualify in Flagstaff

DSCR is the property's monthly rent divided by its monthly housing payment. Pillar Mortgage Group places loans down to a 0.75 ratio, and a 1.0 ratio means rent fully covers the payment (Pillar Mortgage Group, DSCR Loans). Property tax, insurance, and HOA dues vary by parcel and policy, so every figure below uses principal and interest only. Taxes, insurance, and HOA dues lower the real ratio, so treat these as the starting line, not the finish.

A. At Flagstaff's average rent, how big a loan qualifies?

Inputs: average rent of $2,128 a month (Zillow, as of September 30, 2026), the Freddie Mac 30 year average of 7.32% (Freddie Mac PMMS, week of October 22, 2026), and a 360 month term. Implied purchase price assumes 25 percent down.

B. At Flagstaff's typical home value, how much rent does it take?

Inputs: typical home value of $650,175 (Zillow, as of September 30, 2026), 25 percent down for a $487,631 loan, the Freddie Mac 30 year average of 7.32% (Freddie Mac PMMS, week of October 22, 2026), and a 360 month term, for monthly principal and interest of $3,349.69.

Loan amounts and prices are rounded down and rents rounded up to the nearest dollar.

In Flagstaff, a purchase near $550,726 with 25 percent down reaches a 0.75 ratio on citywide average rent, on principal and interest. The levers that raise the ratio are a larger down payment, a property type or unit that rents above the citywide average, or short-term rental income, which lenders document differently than a long-term lease.

Rate note: Freddie Mac's PMMS tracks conventional loans, not investor DSCR loans. PMMS tracks conventional loans for owner occupied homes, so it is a benchmark here, not a DSCR quote. Your actual rate depends on credit, down payment, ratio, and property type.

Flagstaff short-term rental rules

Flagstaff requires an annual Short Term Rental License under City Code Chapter 3-12, and the 2026 updates raised the fee from $185 to the state maximum of $250. Owners must hold an Arizona TPT license, remit sales and BBB taxes at hotel rates, carry at least $500,000 in liability insurance, screen guests against the National Sex Offender Public Website at least 24 hours before each stay, and notify adjacent, across, and diagonal neighbors. During Stage 2 or higher fire restrictions, open flame fire pits and grills must be removed, disabled, or locked. Properties with an ADU whose certificate of occupancy was issued on or after September 14, 2024 can only be licensed if the owner lives on site. (City of Flagstaff, Short-Term Rental Ordinance Updates) (City of Flagstaff, STR Property Owners page). Statewide, A.R.S. 9-500.39 says a city or town may not prohibit vacation or short-term rentals, but it can require a permit or license and cap that fee at $250 or the actual cost, whichever is less (A.R.S. 9-500.39). HOA rules can still restrict rentals, so check your CC&Rs before you buy.

Flagstaff DSCR loan FAQs

What DSCR do I need to get a rental loan in Flagstaff?

Pillar Mortgage Group places DSCR loans down to a 0.75 ratio. Expect credit around 660 or higher, typically 20 to 25 percent down, and reserves of roughly 3 to 6 months of payments.

Can I close a Flagstaff rental in an LLC?

Yes. DSCR financing through Pillar Mortgage Group allows you to close in the name of an LLC.

Can I run a short-term rental in Flagstaff?

Yes, with an annual Flagstaff Short Term Rental License (now $250), an Arizona TPT license, $500,000 in liability insurance, guest sex offender checks, neighbor notice, and fire restriction compliance. Properties with a newer ADU require the owner to live on site. Arizona law (A.R.S. 9-500.39) does not let cities ban short-term rentals outright, but they can require permits and enforce local rules.

What does it take for a Flagstaff rental to qualify for a DSCR loan?

At Zillow's Flagstaff average rent of $2,128 a month as of September 30, 2026 and the Freddie Mac 30 year average of 7.32% for the week of October 22, 2026, principal and interest reaches a 0.75 DSCR on a loan up to $413,045, about a $550,726 purchase at 25 percent down, and a 1.0 DSCR on a loan up to $309,783, about a $413,044 purchase. At Zillow's typical Flagstaff home value of $650,175 with 25 percent down, the property needs about $2,513 a month in rent for a 0.75 DSCR and $3,350 for a 1.0 DSCR. These figures are principal and interest only. Taxes, insurance, and HOA dues lower the real ratio. The levers that raise the ratio are a larger down payment, a property type or unit that rents above the citywide average, or short-term rental income, which lenders document differently than a long-term lease.

Talk to Pillar Mortgage Group

Send us the address and the rent you expect, and we will run the real ratio with your actual taxes, insurance, and HOA before you write an offer. Start your Flagstaff DSCR scenario.

Sources

1. Zillow, Flagstaff, AZ Home Values (typical home value and average rent, data through September 30, 2026). https://www.zillow.com/home-values/31567/flagstaff-az/
2. Freddie Mac, Primary Mortgage Market Survey (30 year fixed average 7.32% as of October 22, 2026). https://www.freddiemac.com/pmms
3. City of Flagstaff, Short-Term Rental Ordinance Updates (accessed October 22, 2026). https://flagstaff.az.gov/5200/Short-Term-Rental-Ordinance-Updates
4. City of Flagstaff, STR Property Owners page (accessed October 22, 2026). https://www.flagstaff.az.gov/4537/STR-Property-Owners
5. Arizona Revised Statutes 9-500.39, Vacation rentals and short-term rentals (accessed October 22, 2026). https://www.azleg.gov/ars/9/00500-39.htm
6. Pillar Mortgage Group, DSCR Loans (program overview). https://pillarmortgagegroup.com/dscr-loans