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**Last Updated:** March 22, 2023

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Discover the best DSCR loan Arizona has to offer and grow your rental portfolio with the lowest interest rate, lowest fees and highest leverage.

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We don't need to tell you that you have many choices when it comes to getting a DSCR loan for your next purchase or refi. That's why it's so important to understand how DSCR loans work, how DSCR lenders work, and how to get the best possible terms so you can grow your portfolio in a manner that optimizes cash flow and eliminates unnecessary expense.

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## DSCR Loan Interest Rates in Arizona

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DSCR loan interest rates in Arizona tend to be slightly more lower than the [national average](https://www.offermarket.us/blog/dscr-loan-interest-rates). This is because DSCR loan interest rates decrease as the loan amount increases, and the median home price in Arizona is higher than the national average.

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The DSCR Loan Interest Rate Index shown below indicates the current and historical DSCR loan interest rate pricing for borrowers with 720 credit score where the subject property has a DSCR of 1.2 at 75% LTV. Don't worry, we'll get into what this means in a moment!

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<iframe title="DSCR Loan Interest Rates"  width="600" height="371" seamless frameborder="0" scrolling="no" src="https://docs.google.com/spreadsheets/d/e/2PACX-1vRJPw1fYWqj_5mdlNBrD5MLne_ApqpOXlNmkmNE_sZfPgsbn9pU0mWUenEO1x6WE9237S7jzaQE2Hig/pubchart?oid=262687025&amp;format=interactive"></iframe>

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## What does DSCR mean?

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DSCR stands for *Debt Service Coverage Ratio*, a simple cash flow metric that divides net operating income of your rental property by the your mortgage principal and interest. 

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**Net Operating Income** ÷ **Mortgage Payment**

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The simplest way to think about DSCR is that lenders require a minimum DSCR at a given loan amount. As your loan amount increases, your DSCR decreases. This is because your mortgage 

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## How to calculate DSCR for Arizona rental properties

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There are actually a few different versions of the DSCR formula, and different lenders use different versions. For this reason, it's important to understand how your lender calculates DSCR so you can avoid surprises when you receive your approved loan terms. 

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The easiest way to calculate DSCR is to use our [DSCR calculator](https://www.offermarket.us/tools/dscr-calculator).

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## Best markets in Arizona for DSCR loans

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The best markets for DSCR loans are those that are densely populated. In fact, most DSCR lenders in Arizona do not lend for properties that are [designated as rural](https://www.offermarket.us/blog/rural-designation-search-tools). When reviewing your appraisal report, lenders want to see comps within 1 mile of your subject property. The farther away the comps, the less confidence your lender will have, and the more likely they will be to reduce leverage (lower LTV) or deny your loan.

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<table>
<thead>
  <tr>
    <th>City</th>
    <th>Population</th>
    <th>County</th>
  </tr>
</thead>
<tbody>
  <tr>
    <td>Phoenix</td>
    <td>1,680,992</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Tucson</td>
    <td>545,975</td>
    <td>Pima</td>
  </tr>
  <tr>
    <td>Mesa</td>
    <td>518,012</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Chandler</td>
    <td>257,165</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Scottsdale</td>
    <td>255,310</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Glendale</td>
    <td>247,945</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Gilbert</td>
    <td>247,542</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Tempe</td>
    <td>195,805</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Peoria</td>
    <td>172,259</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Surprise</td>
    <td>141,664</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Yuma</td>
    <td>97,908</td>
    <td>Yuma</td>
  </tr>
  <tr>
    <td>Avondale</td>
    <td>87,931</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Goodyear</td>
    <td>86,840</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Casa Grande</td>
    <td>57,233</td>
    <td>Pinal</td>
  </tr>
  <tr>
    <td>Lake Havasu City</td>
    <td>57,039</td>
    <td>Mohave</td>
  </tr>
  <tr>
    <td>Buckeye</td>
    <td>56,370</td>
    <td>Maricopa</td>
  </tr>
  <tr>
    <td>Maricopa</td>
    <td>50,154</td>
    <td>Pinal</td>
  </tr>
  <tr>
    <td>Sierra Vista</td>
    <td>44,888</td>
    <td>Cochise</td>
  </tr>
  <tr>
    <td>San Luis</td>
    <td>33,315</td>
    <td>Yuma</td>
  </tr>
</tbody>
</table>

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## Is Arizona a good market to buy rental properties?

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According to [market data from Zillow](https://www.zillow.com/home-values/8/az/), home prices in Arizona have increased **47%** since the start of the COVID-19 pandemic (March 2020). It's incredible to see such an increase from $282,000 to $414,000 in just 3 years! At the same time, rent has also grown by over 30%, but it has not kept up with home prices.

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<iframe width="600" height="371" seamless frameborder="0" scrolling="no" src="https://docs.google.com/spreadsheets/d/e/2PACX-1vTZKB5FNbJW9TKH6tq9s0TbQR-qteOqhLrM_xdUjvTCKyeDUsvDVAGnZhCSzeBSoOjn6SShFcaeEgmP/pubchart?oid=1112103873&amp;format=interactive"></iframe>

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We rate core Arizona rental markets, specifically the cities listed above as **above average** given economic development, population growth and favorable property taxes.

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Growing your rental property portfolio in the Grand Canyon State? Discover the best DSCR loan Arizona has to offer, right here at OfferMarket.

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DSCR Loan Arizona

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*OfferMarket Insurance specializes in providing real estate investors the best coverage at the lowest possible price. Whether you're looking for **landlord insurance** or **fix and flip insurance**, we have you covered. [Get a quote](https://www.offermarket.us/insurance) and see how much you can save in just a few minutes!*

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## Functional Replacement Cost (FRC)

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**Functional replacement cost** is a method used to determine the value of property for insurance purposes. It is a way to estimate the cost of rebuilding or replacing a property after it has been damaged or destroyed. The concept of functional replacement cost is different from both actual cash value (ACV) and replacement cost value (RCV) policies, and understanding the distinctions is crucial for ensuring that one's property is properly insured.

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## Actual Cash Value (ACV)

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**Actual cash value** policies are based on the principle of depreciated value. This means that the value of the property is determined by subtracting the estimated cost of depreciation from the cost of replacing the property. For example, if a building is worth $100,000 to replace but has been depreciated to $80,000, the actual cash value of the building would be $80,000. This can be problematic for policyholders, as the actual cash value of a property is typically much less than its replacement cost.

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## Replacement Cost Value (RCV)

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**Replacement cost value** policies, on the other hand, are based on the principle of full replacement. This means that the value of the property is determined by the cost of replacing it, regardless of its current condition. For example, if a building is worth $100,000 to replace, the replacement cost value of the building would also be $100,000. However, Replacement cost can become a problem if it is not adjusted as the cost of construction, labour, and materials go up, A policy holder can end up paying more than they should.

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Functional replacement cost is a hybrid of these two concepts. It considers both the current condition of the property and the cost of replacing it. The goal is to estimate the cost of rebuilding or replacing the property in a manner that is functionally equivalent to the original property. This means that the replacement property would have the same function, but may not be identical to the original property. For example, if a building is worth $100,000 to replace but has been depreciated to $80,000, the functional replacement cost of the building would be somewhere in between the actual cash value and the replacement cost value, depending on the functional characteristics of the building, such as age, size, and quality of construction.

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Functional replacement cost policies can be beneficial for policyholders because they typically provide more coverage than actual cash value policies, but less coverage than replacement cost value policies. This can help to balance the cost of insurance with the level of coverage provided. Additionally, functional replacement cost policies can take into account factors that may affect the cost of rebuilding or replacing a property, such as local labor costs, building codes, and zoning laws. This can make the process of determining the value of a property more accurate and fair.

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It is important to note that, the terms and how these policies are calculated and how the claim is paid out can vary significantly by the insurer and jurisdiction. Policyholder should consult the policy documents and ask their insurance agent to understand the exact details of their coverage. it is also important to have a good understanding of the local building codes, zoning laws, and the cost of construction materials and labour before making a decision about which type of policy to purchase.

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In summary, functional replacement cost is a method of determining the value of property for insurance purposes that takes into account both the current condition of the property and the cost of replacing it. This approach can be beneficial for policyholders because it can provide a balance between the cost of insurance and the level of coverage provided. While functional replacement cost is different from both actual cash value and replacement cost value policies, it is important for policyholders to understand the distinctions and how they may affect their insurance coverage. In order to ensure that their property is properly insured, policyholders should consult their insurance agent and carefully review the insurance policy.

Learn the difference between Functional Replacement Cost, Actual Cash Value and Replacement Cost Value for landlord and fix & flip insurance.

Functional Replacement Cost - Actual Cash Value - Replacement Cost Value

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What is Functional Replacement Cost? | OfferMarket

What is Functional Replacement Cost in property insurance?

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Residential real estate is the largest asset class in the United States. This dashboard is a compilation of data curated by the Federal Reserve Bank of St. Louis. By understanding this data, we believe real estate investors can make better, more informed financial decisions.

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## S&P Case-Shiller Home Price Index

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OzkC&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Real Residential Property Prices for United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=Oxsb&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Housing Affordability Index

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=Ozq9&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Median Sales Price for Houses Sold in the United State

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OXOJ&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Total Housing Units in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OXOV&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Rental Vacancy Rate in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=ODmh&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Homeownership Rate in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OXLC&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Owned-Occupied Housing Units in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OKb4&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Population of the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OXO9&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Rented-Occupied Housing Units in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OXO3&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## 30-Year Fixed Rate Mortgage Average in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OWaW&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Single Family Housing Units Under Construction in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=ONN6&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Inflation, consumer prices in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OQAf&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## 30 Year Breakeven Inflation Rate

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ2z&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Unemployment Rate in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=NMwN&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Labor Force Participation Rate

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ41&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Real Median Household Income

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ35&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Real Median Personal Income in the United States

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=I2gr&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Share of Total Net Worth Held by the Top 1%

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=NWUG&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Share of Total Net Worth Held by the Bottom 50%

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ4B&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Delinquency Rate on Single-Family Residential Mortgages

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=MsDe&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Delinquency Rate on Credit Card Loans

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=Nd1R&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Delinquency Rate on Consumer Loans

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=NC9J&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Delinquency Rate on Business Loans

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=NamE&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Delinquency Rate on All Loans

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ3W&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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## Stock Market: S&P 500 Index

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<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OZ44&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

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Your dashboard for the most important housing market and economic data. Get the facts, form your own opinions, make better real estate investing decisions.

Federal Reserve Housing Market Economic Dashboard

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Federal Reserve Housing Market Data OfferMarket Blog

Federal Reserve Housing Market & Economic Data Dashboard

Grow your real estate investing business with the most competitive and transparent private lender for bridge loans (hard money, fix & flip, rehab, ground up construction), DSCR rental loans.

Private Lender for DSCR Loans and Fix & Flip Loans | OfferMarket

Private Lender for DSCR Loans and Fix & Flip Loans

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<iframe width="560" height="315" src="https://www.youtube.com/embed/Sy8RMWsR_Qw" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

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## Off-Market Real Estate Marketplace

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This video guest starring [slimlord1986](https://www.instagram.com/slimlord1986/) features [5505 Stuart Ave, Baltimore, MD 21215](https://www.offermarket.us/listings/5505-Stuart-Ave-Baltimore-MD-21215-USA), available exclusively from OfferMarket investment property marketplace.

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If you're buying or selling single family or multi-family real estate, check out OfferMarket's real estate marketplace.

Luxury Redefined Episode 1 features 5505 Stuart Ave, Baltimore, MD 21215. A distressed listing with so much potential.

Luxury Redefined: Episode 1

Off-Market Real Estate Marketplace

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