Fairbanks may be smaller than Anchorage, but it offers outsized potential for real estate investors. Situated in Alaska’s Interior, the Fairbanks North Star Borough has about 32,000 residents and hosts the University of Alaska Fairbanks, Fort Wainwright and Eielson Air Force Base, which collectively create a steady stream of renters. Fairbanks offers lower home prices than Anchorage and higher cap rates sometimes exceeding 16 %, according to local analysis. However, the market also experiences more seasonal vacancy and property management challenges due to extreme weather. DSCR loans can help investors capitalize on the city’s high‑yield opportunities while managing risk through conservative underwriting. This article explores the Fairbanks real estate market, explains how DSCR financing works, ranks the best lenders and highlights local considerations.
Fairbanks Real Estate Market Overview
According to Stacker’s 2025 review of Redfin data, the median sale price in Fairbanks was about $342,464, with approximately 100 home sales each month and a 3.0 months’ supply of homes for sale. Properties spent about 61.4 days on market, indicating a slower turnover than Anchorage but still healthy demand. The Alaska Department of Labor’s 2025 rental market survey reported an average contract rent of $1,523 and a median rent of $1,500 across all rental units in the Fairbanks North Star Borough, with a vacancy rate of 13.5 %. In apartment units, the median rent for a one‑bedroom was $1,250, and the vacancy rate was a high 15.2 %. These figures illustrate that while rents are comparable to Anchorage, vacancy is substantially higher, especially in multi‑family properties.
Fairbanks’s housing stock ranges from older duplexes in the city center to newer single‑family homes in North Pole and suburban subdivisions. Many investors target student rentals near the university or military housing near base installations. Short‑term rentals catering to aurora chasers and winter tourists are also popular, with peak booking seasons between October and March. Property management can be more challenging here due to sub‑zero temperatures, ice‑dam formation and longer periods of darkness, which may increase maintenance costs.
Despite these challenges, Fairbanks’ cap rates averaging 16 % and lower acquisition costs (median home price around $289,000 in some reports) provide the potential for substantial cash flow. For investors with a strong property management plan, DSCR loans offer a path to leverage this market without relying on personal income qualification.
How DSCR Loans Work for Fairbanks Rentals
DSCR loans calculate eligibility by comparing the property’s net operating income (NOI) to its mortgage payments. The ratio is expressed as DSCR = NOI ÷ Debt Service. A DSCR above 1.0 means the property generates more income than needed to cover payments; lenders typically seek DSCRs of 1.0–1.25 for rental properties. Programs like Newfi Lending’s DSCR loan allow investors to qualify solely based on rental income, with minimum credit scores starting at 640 and DSCR ratios down to 0.8. Easy Street Capital’s program has no set minimum DSCR and offers LTV up to 80 %. Longleaf Lending requires DSCR >1.0 and credit scores of 660.
Because Fairbanks’ vacancy rates are relatively high, investors should run conservative DSCR calculations. For example, if a duplex rents for $3,000 per month and the mortgage (PITI) is $2,200, the DSCR is 3,000 ÷ 2,200 = 1.36. However, if vacancy reduces income by 15 %, monthly rental income drops to $2,550, lowering DSCR to 1.16. Lenders may still approve the loan, but investors should plan for such scenarios. Many DSCR lenders also require cash reserves equal to six months of PITI or may lower LTV if DSCR is borderline.
What to Look for in a Fairbanks DSCR Lender
Investors should evaluate DSCR lenders based on these criteria:
- Tolerance for high vacancy markets. Lenders familiar with Alaska should understand Fairbanks’ seasonal vacancies. Those with no minimum DSCR (Easy Street Capital) or low DSCR requirements (Newfi) can accommodate fluctuations.
- Rate and fee structure. Given Fairbanks’ high cap rates, slightly higher interest rates may still produce strong cash flow. Investors should compare base rates, origination fees and prepayment penalties across lenders.
- Flexibility on property type. Students and military tenants often rent multi‑unit properties. Lenders that finance duplexes, triplexes and fourplexes (e.g., Newfi and Global Credit Union) are advantageous.
- Closing speed and customer support. With a shorter market season and fewer homes on the market, being able to close quickly is critical. Longleaf Lending’s two‑week closings can be valuable.
- Local guidance. Lenders or brokers familiar with Fairbanks can help investors choose neighborhoods with low vacancy and good tenant quality. SelectHomeLoans.com, for example, partners with local property managers to assess market rent and seasonal demand.
Top DSCR Lenders in Fairbanks
#1 SelectHomeLoans.com
SelectHomeLoans.com claims the top spot in Fairbanks for its investor‑friendly terms and commitment to local expertise. The company offers DSCR loans with LTV up to 80 % and flexible DSCR requirements. It has a strong track record financing properties near the University of Alaska Fairbanks and the military bases. SelectHomeLoans.com pairs borrowers with Alaska‑based appraisers and property management consultants to ensure income projections are realistic. Investors appreciate the personalized guidance and ability to close loans within three weeks. Additionally, the firm’s ongoing portfolio review helps investors plan future refinances or expansions. This combination of competitive rates, local insight and investor education justifies its #1 ranking. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296
#2 Newfi Lending
Newfi offers fair terms and a forgiving DSCR threshold, accepting ratios down to 0.8. For Fairbanks investors, this low threshold is appealing because high vacancy can suppress DSCR. Newfi finances short‑term rentals and multi‑unit properties and allows 15‑, 30‑ and 40‑year amortization with interest‑only options. Borrowers can hold the property title in an LLC, adding asset‑protection benefits. Newfi’s minimal documentation requirements mean investors who have multiple properties or self‑employed income can qualify more easily than with traditional lenders.
#3 Easy Street Capital
Easy Street Capital’s DSCR program features no minimum DSCR and LTV up to 80 %, making it flexible for properties with seasonal cash flow. The lender’s rates start at 5.75 % and they offer interest‑only options that maximize early cash flow. Easy Street has funded several DSCR loans in Alaska, including a $502,500 single‑family acquisition in Fairbanks at 6.5 % with 75 % LTV. This track record demonstrates the company’s willingness to lend in high‑vacancy markets when the numbers make sense.
#4 Longleaf Lending
Longleaf’s DSCR program starts at 6.6 % interest with LTV up to 80 % and requires DSCR >1.0. The company closes loans quickly and provides hands‑on service. Investors in Fairbanks appreciate Longleaf’s willingness to consider rural or remote properties, provided there is reliable year‑round access. However, the firm’s higher DSCR requirement may mean investors need to price rents aggressively or opt for lower leverage.
#5 Offermarket
Offermarket’s minimum credit score of 660, DSCR of 1.11, and down payment of 20 % make it suitable for investors with strong financial profiles. Their online platform provides quick term sheets and conditional approvals. For Fairbanks properties with high cap rates and strong rents, Offermarket can deliver competitive financing.
Local and Regional Lenders
Investors should also explore local lenders for more conventional financing or portfolio loans:
- Credit Union 1: The credit union’s business lending program requires a minimum DSCR of 1.25× and credit score of 640 or higher. While intended for business operations, the program demonstrates a local institution’s comfort underwriting cash‑flow‑based loans.
- Northrim Bank: Offers commercial real estate loans for purchase, refinance or construction. The bank’s local insight and flexible terms make it a good choice for investors moving into commercial or mixed‑use properties. Northrim highlights its customised solutions, experienced team and local decision‑making.
- Global Credit Union (Alaska USA): Its 30/15 Investment Program allows purchase and refinance loans up to 85 % LTV for one‑unit properties. With loan amounts up to $1.4 million, the program works for investors seeking higher leverage on single‑unit or 2–4 unit properties. Although it requires full documentation, the combination of long amortization and balloon payment provides manageable monthly payments.
DSCR Rates, Terms and Qualification Factors in Fairbanks
Fairbanks investors will generally encounter DSCR rates ranging from the mid‑5 % to mid‑7 % range, mirroring state averages. Easy Street Capital’s rates start at 5.75 %, while Longleaf Lending begins around 6.6 % and Offermarket typically sits between 6 % and 7 % depending on DSCR. Newfi’s 40‑year term with interest‑only periods can reduce monthly payments but may come with slightly higher rates.
Qualification requirements include:
- Credit scores of 640–680 depending on the lender. Higher scores unlock lower rates and larger loan amounts.
- Down payments of at least 20 % for purchases and 25 % equity for cash‑out refinances. Global Credit Union allows 85 % LTV on one‑unit properties.
- DSCR thresholds: as low as 0.8 (Newfi), or with no set minimum (Easy Street). Investors should target DSCR ≥1.2 to maintain cushion for vacancies.
- Reserves: Many lenders require six to twelve months of PITI reserves for each financed property.
Common Mistakes to Avoid
Investors sometimes stumble when investing in Fairbanks with DSCR loans. Common pitfalls include:
- Ignoring vacancy risk. With a 13.5 % overall vacancy rate and 15.2 % for one‑bedroom apartments, underestimating vacancy can erode DSCR and lead to covenant breaches. Plan for extended vacancies and adjust DSCR projections accordingly.
- Underestimating operational challenges. Extreme cold can cause frozen pipes, heating system failures and roof damage. Investors should budget for preventive maintenance and emergency repairs.
- Poor tenant screening. Military and student tenants may offer reliable rents but can bring turnover. Implement strict screening and consider professional property management to mitigate risk.
- Overleveraging on high cap‑rate properties. Although high cap rates are tempting, borrowing at maximum LTV can strain cash flow when vacancies or expenses increase. Aim for DSCR above 1.3 to weather income fluctuations.
DSCR vs. Conventional Financing in Fairbanks
Conventional investment loans require full income documentation, place limits on the number of financed properties and may impose mortgage insurance with down payments under 25 %. DSCR loans, by contrast, assess only the property’s income potential. For Fairbanks investors, DSCR financing is advantageous because it allows you to acquire multiple properties despite personal DTI limitations. However, DSCR rates are slightly higher and down payments must be larger. Investors should compare both options—if your personal income is strong and you plan to hold a property long term, a conventional loan may be cheaper. If you want to scale quickly or your tax returns understate income, DSCR loans offer more flexibility.
Who DSCR Loans Are Best For in Fairbanks
DSCR loans suit several investor profiles:
- Cash‑flow investors seeking high cap rates and willing to manage higher vacancy risk.
- Out‑of‑state investors who may not meet conventional DTI requirements but can secure property‑based financing.
- Short‑term rental operators catering to aurora tourism and seasonal visitors. Newfi and Longleaf both allow short‑term rentals, provided the property remains in a business entity’s name.
- Seasoned investors building a portfolio of multi‑unit properties. DSCR loans allow financing of multiple 1–4 unit buildings without the typical cap imposed by Fannie Mae or Freddie Mac. Global Credit Union’s program, for instance, permits borrowers to finance up to 12 properties.
DSCR loans are less suitable for owner‑occupied properties or investors seeking the lowest possible rate.
Fairbanks‑Specific Considerations
- Seasonal cash flow. Peak tourism runs from late fall through March, boosting short‑term rental demand. Summer months may see decreased occupancy, so you’ll need reserves.
- Military and student tenants. Proximity to bases and the university means turnover may coincide with academic calendars or deployment cycles. Factor in leasing downtime and marketing costs.
- Geographic spread. The Fairbanks borough includes communities like North Pole and Salcha. Properties farther from town may be cheaper but can be harder to manage in winter. Lenders may adjust DSCR requirements based on location.
- Infrastructure limitations. Not all areas have municipal water and sewer. Before closing, verify that utilities meet lender requirements and that winter accessibility is assured.
- Market volatility. Military realignments or changes in oil and gas projects can quickly shift rental demand. Diversify tenant base and consider mixed‑use or commercial properties to mitigate risk.
Conclusion: SelectHomeLoans.com Leads the Fairbanks Pack
With lower purchase prices, high cap rates and a dependable tenant base from the military and university, Fairbanks offers lucrative opportunities for investors willing to manage vacancy and maintenance challenges. DSCR loans provide the flexibility to tap into these opportunities without being constrained by personal income limits. Among the lenders evaluated, SelectHomeLoans.com stands out for its combination of competitive terms, fast closing timelines and local expertise. Its willingness to partner with local professionals and offer investor education makes it the clear choice for Fairbanks investors seeking DSCR financing. Whether you’re buying a student rental near the university or refinancing a portfolio of duplexes, working with SelectHomeLoans.com can help you optimize cash flow and build wealth in Alaska’s interior.
