DSCR Loans in Tempe, AZ | Pillar Mortgage Group

Pillar Mortgage Group places DSCR loans on Tempe 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 the Valley, and the cited numbers below show what it takes for a Tempe rental to qualify right now.

Tempe 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 Tempe

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

Inputs: average rent of $1,623 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 Tempe's typical home value, how much rent does it take?

Inputs: typical home value of $458,515 (Zillow, as of September 30, 2026), 25 percent down for a $343,886 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 $2,362.26.

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

In Tempe, a purchase near $420,032 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 or a property type or unit that rents above the citywide average.

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.

Tempe short-term rental rules

Tempe requires a Short-Term Rental License for stays of 29 days or less, at $250 a year per unit ($187.50 for applications from July 1 on). Owners need an Arizona TPT license, Maricopa County Assessor registration, at least $500,000 in liability insurance or equal platform coverage, a 24 hour emergency contact, neighbor notice, and a sex offender check on each booking guest at least 24 hours before the stay unless the platform runs it. Missing a license can cost up to $1,000 per month, and verified violations run up to $500, $1,000, and $3,500 or one to three nights' rent. The city lists combined lodging taxes at 14.07 percent. (City of Tempe, Short-Term Rental License 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.

Tempe DSCR loan FAQs

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

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 Tempe 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 Tempe?

Yes, with a Tempe Short-Term Rental License ($250 a year per unit), an Arizona TPT license, county registration, $500,000 in liability coverage, a 24 hour emergency contact, neighbor notice, and guest sex offender checks unless the platform runs them. 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 Tempe rental to qualify for a DSCR loan?

At Zillow's Tempe average rent of $1,623 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 $315,024, about a $420,032 purchase at 25 percent down, and a 1.0 DSCR on a loan up to $236,268, about a $315,024 purchase. At Zillow's typical Tempe home value of $458,515 with 25 percent down, the property needs about $1,772 a month in rent for a 0.75 DSCR and $2,363 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 or a property type or unit that rents above the citywide average.

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 Tempe DSCR scenario.

Sources

1. Zillow, Tempe, AZ Home Values (typical home value and average rent, data through September 30, 2026). https://www.zillow.com/home-values/47958/tempe-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 Tempe, Short-Term Rental License page (accessed October 22, 2026). https://www.tempe.gov/government/financial-services/sales-tax-licensing/tempe-short-term-rental-license
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