DSCR Loans in Sedona, AZ | Pillar Mortgage Group

Pillar Mortgage Group places DSCR loans on Sedona 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 Sedona rental to qualify right now.

Sedona 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 Sedona

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 Sedona's average rent, how big a loan qualifies?

Inputs: average rent of $2,612 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 Sedona's typical home value, how much rent does it take?

Inputs: typical home value of $891,380 (Zillow, as of September 30, 2026), 25 percent down for a $668,535 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 $4,592.37.

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

In Sedona, a purchase near $675,985 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.

Sedona short-term rental rules

Sedona requires a city short-term rental permit for every unit at $210 per unit per year, and a unit without a valid Arizona TPT license cannot be rented or offered for rent. Owners must carry at least $500,000 in liability insurance per unit, give owner, designee, and 24 hour emergency contact details, and notify adjacent, across the street, and diagonal neighbors by certified mail or hand delivery. Guests must be screened against the sex offender registry at least 24 hours before check in, the permit number must appear on every listing, and weddings, receptions, retreats, and other for profit events are banned. Violations can bring penalties of $500 up to $3,500 and permit suspension for up to 12 months under Sedona City Code 5.25. (City of Sedona, Short-Term Rentals: Property Owner Responsibilities). 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.

Sedona DSCR loan FAQs

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

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 Sedona 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 Sedona?

Yes, with a Sedona short-term rental permit ($210 per unit per year), an Arizona TPT license, $500,000 in liability insurance per unit, certified neighbor notice, guest sex offender screening, and no weddings or for profit events. Penalties run $500 to $3,500 with possible 12 month suspension. 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 Sedona rental to qualify for a DSCR loan?

At Zillow's Sedona average rent of $2,612 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 $506,989, about a $675,985 purchase at 25 percent down, and a 1.0 DSCR on a loan up to $380,242, about a $506,989 purchase. At Zillow's typical Sedona home value of $891,380 with 25 percent down, the property needs about $3,445 a month in rent for a 0.75 DSCR and $4,593 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 Sedona DSCR scenario.

Sources

1. Zillow, Sedona, AZ Home Values (typical home value and average rent, data through September 30, 2026). https://www.zillow.com/home-values/7005/sedona-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 Sedona, Short-Term Rentals: Property Owner Responsibilities (accessed October 22, 2026). https://www.sedonaaz.gov/your-government/departments-and-programs/community-development/short-term-rentals/property-owner-responsibilities
4. 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
5. Pillar Mortgage Group, DSCR Loans (program overview). https://pillarmortgagegroup.com/dscr-loans