No-ratio DSCR loans in Arizona — when rental income doesn't have to cover the payment
Standard DSCR loans require the rent to cover PITI plus a margin. When your numbers are tight — fix-and-flip exit, short-term rental still ramping, repositioned property — a no-ratio DSCR program lets you close without meeting the ratio.
Standard DSCR vs no-ratio DSCR
Standard DSCR programs require monthly rent to be at least 1.0× PITI (some lenders 1.10× or 1.25×). On a $300K rental with $1,950 PITI, you need $1,950+ in market rent to qualify. If your actual or projected rent is $1,800, you don't fit.
No-ratio DSCR removes the cash-flow test entirely. The loan qualifies on the asset, the borrower's credit, and reserves — not on whether the rent covers the payment. Useful when the rent simply doesn't match yet.
Pricing trade-off
| Product | Min DSCR | Min Down | Rate vs std DSCR |
|---|---|---|---|
| Standard DSCR | 1.10–1.25 | 20–25% | Baseline |
| Low-ratio DSCR (0.75–0.99) | 0.75 | 25% | +0.50% to +1.0% |
| No-ratio DSCR | N/A | 25–30% | +1.0% to +2.0% |
| No-doc DSCR | N/A | 30–35% | +1.5% to +2.5% |
When the no-ratio program is the right tool
- BRRRR refinance before the property is stabilized — rent isn't seasoned yet.
- Short-term rental ramping up — projections support the deal but trailing 12 won't.
- Value-add property mid-rehab — current rent doesn't reflect post-rehab market.
- Quick close requirements where seasoned rent rolls aren't available.
- Refinancing out of hard money where the property's true earning isn't documented yet.
Common questions
Will my interest rate drop if I refinance after seasoning the property?
Yes. Once you have 12 months of documented rent meeting standard DSCR ratios, you can refinance into a standard DSCR program with much better pricing.
Does no-ratio DSCR work for short-term rentals?
Yes — particularly for properties where AirDNA projections support the deal but actual trailing 12 doesn't exist or is weak.
What credit score do I need?
Typically 680 minimum, best pricing at 720+. Reserves usually 6-12 months PITI required.
Can I use no-ratio for 5+ unit multifamily?
Some lenders extend to small multifamily (2-4 unit) under no-ratio. 5+ unit usually crosses into commercial DSCR with different programs.
How Mike + Cornerstone help
I structure DSCR loans daily for Arizona investors — Phoenix metro is one of the most active investor markets in the country. When the standard DSCR ratio doesn't work for your scenario, I'll show you which no-ratio program fits and walk through the cost trade-off so you know exactly what you're paying for the flexibility.
Talk to Mike first Get pre-approved
No pressure, no commitment. Free 20-minute consult. Mike will look at your scenario and tell you straight whether this works for you.