Located in the northwest corner of Arkansas, Fayetteville is home to the University of Arkansas and part of the rapidly growing Northwest Arkansas metro area. The city boasts a dynamic mix of college students, tech professionals, families and retirees, making it one of the most desirable markets in the state. Real estate investors are drawn to Fayetteville for its strong rental demand, appreciation potential and diversified economy anchored by education, healthcare and the presence of large corporate employers in the broader region (including Walmart and Tyson Foods in nearby Bentonville and Springdale). DSCR loans have become a crucial financing tool in Fayetteville because they allow investors to qualify based on the property’s cash flow rather than personal income. With a high student population and a continuous influx of new residents, DSCR loans empower investors to purchase student housing, multifamily properties or short‑term rentals without the burden of traditional mortgage documentation.
Fayetteville’s housing market underscores its appeal. According to Stacker’s 2025 review, the median sale price is $373,924. The city sees approximately 902 home sales per month and 324 new construction sales. Inventory totals about 3,083 homes, and there is 3.5 months of supply, indicating a seller’s market that still presents opportunities for well‑capitalized investors. Homes spend around 40 days on the market, which is faster than in Little Rock or Fort Smith. While the cost of living is higher than the state average, the city offers strong appreciation potential. A cost‑of‑living overview shows that average monthly rent in Fayetteville is around $1,408, and the typical home price is roughly $487,636. These figures underscore the city’s premium status and explain why investors are willing to pay more to access its high‑growth market.
This article will explore DSCR lending in Fayetteville: how it works, what to look for in a lender, which lenders stand out (with SelectHomeLoans.com again ranked #1), and unique considerations for investing in a university town. Whether you plan to finance student rentals near campus, purchase a luxury condo downtown or convert a single‑family home into a short‑term rental, understanding DSCR loans can help you capitalize on this flourishing market.
Overview of Fayetteville’s Real Estate Investment Market
Fayetteville’s growth is propelled by a combination of educational institutions, corporate headquarters in the broader region and a high quality of life. The University of Arkansas attracts tens of thousands of students, faculty and staff each year, creating a perpetual demand for rental housing. The city’s proximity to Bentonville, home to Walmart’s world headquarters, and Springdale, headquarters of Tyson Foods, further supports strong employment opportunities. The median sale price of $373,924 in 2025 reflects both the city’s desirability and its limited inventory. With 902 home sales per month and 324 new construction sales, Fayetteville sees robust transaction activity. The 3.5 months of supply indicates a seller’s market, but with nearly 3,083 homes in inventory, investors still have options to choose from.
Rents in Fayetteville are higher than in many other Arkansas cities. The average monthly rent of $1,408 and typical home price of $487,636 highlight the area’s premium status. Student housing near the university can command high rents per bedroom, while upscale neighborhoods like Fayetteville Downtown, Dickson Street and Wilson Park cater to professionals and families. Investors who purchase near the university may benefit from predictable turnover and consistent demand, while those in suburban areas can target longer‑term tenants seeking quality schools and quiet neighborhoods.
How DSCR Loans Work in Fayetteville
DSCR loans in Fayetteville follow the same fundamentals as elsewhere: lenders calculate the property’s DSCR by dividing net operating income by annual debt service. A DSCR of 1.0 or above indicates sufficient cash flow. Because Fayetteville’s rents are relatively high, investors can often achieve strong DSCR ratios even with modest down payments. Lenders typically require:
- Credit scores of 640–680 – Higher scores can lead to lower interest rates.
- Down payments of 20 % to 25 % – Purchase LTVs can reach 80 %; some lenders allow 85 % for experienced investors or portfolio loans.
- Loan terms of 30 or 40 years, with fixed or adjustable rates. Interest‑only periods of up to 10 years may be available.
- DSCR ratios of at least 0.75 to 1.0, depending on the lender and property.
- Property types including student housing, single‑family homes, duplexes, condos, small multifamily buildings and short‑term rentals.
Because the university drives seasonal demand (with higher occupancy during the school year and potential vacancies over summer), lenders may require detailed rent rolls or evidence of pre‑leased units. Short‑term rental projections must be supported by local comps from platforms like Airbnb or VRBO.
What Investors Should Look for in a Fayetteville DSCR Lender
Selecting the right DSCR lender in Fayetteville requires balancing several factors:
- Experience with student housing – Properties rented by the bedroom or by school year require specialized underwriting. Lenders like SelectHomeLoans.com and Newfi are familiar with student housing and can structure loans accordingly.
- Flexibility on DSCR ratio – Because student housing can experience higher vacancy during summer, a lender that accepts DSCR ratios below 1.0 or uses a blended annual income approach may be beneficial.
- Loan amounts and minimums – Fayetteville’s higher home prices may exceed the maximum loan amount for some lenders. Ensure that the lender’s limits (e.g., up to $3 million for Kiavi or $50 million for LendingOne) align with your target property.
- Rate and fee transparency – Compare interest rates, origination fees and closing costs. Ridge Street Capital’s 0 % origination fee or Express Capital Financing’s high LTV options can be appealing.
- Support for short‑term rentals – Fayetteville’s tourism (e.g., Razorback football weekends, music festivals) makes short‑term rentals viable. Choose a lender comfortable with vacation rental projections.
Top DSCR Lenders in Fayetteville
#1 SelectHomeLoans.com – The Premier Choice for Fayetteville Investors
For the third time, SelectHomeLoans.com earns the top spot due to its combination of competitive rates, flexible DSCR requirements and outstanding customer service. Their program allows up to 80 % LTV for purchases, 75 % for cash‑out refinances and DSCR ratios down to 0.75, accommodating the seasonal fluctuations inherent in student rentals. SelectHomeLoans.com also offers 30‑ and 40‑year options with interest‑only periods, enabling investors to maximize cash flow. Fayetteville’s unique market – where leasing cycles revolve around academic calendars – benefits from SelectHomeLoans.com’s willingness to consider pre‑leased units and adjust the underwriting accordingly. Their dedicated team provides local market insights and can close deals in two to three weeks, making them a reliable partner for investors racing to secure properties before the school year. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296
#2 Express Capital Financing
Express Capital Financing’s DSCR program continues to stand out. With up to 85 % LTV for purchases and loans ranging from $50,000 to $3 million, investors can finance large student housing complexes or clusters of single‑family rentals. Their minimum credit score of 650, interest rates starting around 5.875 % and funding in three weeks make them an attractive option for Fayetteville deals. Student housing investors should inquire about the lender’s approach to leases by the bedroom, as some lenders require separate underwriting for this property type.
#3 Ridge Street Capital
Ridge Street Capital maintains its competitive position with LTV up to 80 %, rates as low as 6.25 % and no origination fee. The lender’s quick closings and willingness to lend on short‑term rental properties make it appealing for investors planning to convert homes into Airbnb rentals during Razorback football games or local events. Their requirement of six months’ reserves and a DSCR of 1.0 for long‑term rentals ensures conservative underwriting, which may provide peace of mind for cautious investors.
#4 Easy Street Capital
Easy Street Capital’s DSCR loans remain an excellent option for Fayetteville investors seeking competitive rates and straightforward underwriting. With rates starting at 5.75 %, LTVs up to 80 %, and a focus on 1–4 unit properties, Easy Street offers a reliable alternative. Their experience funding DSCR loans across Arkansas, including deals in West Memphis and Hot Springs Village, demonstrates a consistent track record.
#5 Newfi
Newfi offers unique advantages for Fayetteville investors. The lender’s minimum credit score of 640, acceptance of DSCR ratios down to 0.8 and interest‑only options provide flexibility for student housing and vacation rentals. Newfi’s 40‑year loan program can significantly lower monthly payments, which is beneficial when dealing with higher property prices and seasonal income.
#6 Additional Lenders
Other national lenders, such as LendingOne, Kiavi, RCN Capital and Temple View Capital, also fund DSCR loans in Arkansas. LendingOne offers loans from $70,000 to $50 million, with terms ranging 9 to 360 months, and credit scores starting at 640. Kiavi provides loan amounts of $100,000 to $3 million, interest rates from 6.62 % to 12.45 %, and has no prepayment penalties, making it an attractive option for investors who plan to sell or refinance early. Investors should explore multiple lenders to find the best combination of rate, fees and flexibility.
#7 Local Banks and Credit Unions
Fayetteville investors may also consider local financial institutions. While they may not advertise DSCR loans explicitly, banks such as Arvest Bank (headquartered in nearby Bentonville) and First Security Bank offer commercial real estate loans that can be structured around rental income. Union Bank of Arkansas and Bank OZK have branches throughout the region and emphasize local decision‑making and custom financing, which can be advantageous when dealing with unique student housing configurations or mixed‑use properties. Investors with strong relationships or large deposit accounts may negotiate terms similar to DSCR underwriting.
DSCR Loan Rates, Terms and Qualification Factors in Fayetteville
Rates for DSCR loans in Fayetteville typically start in the mid‑5 % to low‑6 % range, similar to other Arkansas markets. Investors with high credit scores, low loan‑to‑value ratios and DSCR above 1.25 may secure rates closer to 5.75 % (as seen with Easy Street Capital), while those with lower DSCR or credit may pay closer to 7 %. Loan terms generally span 30 years, with some lenders offering 40‑year amortization or interest‑only periods. Minimum credit scores range from 640 to 680, and down payments typically range from 20 % to 25 %. Because Fayetteville’s property prices are higher, investors should ensure that loan amount caps (e.g., $3 million for Kiavi, $2 million for Ridge Street) can accommodate their target acquisitions.
Common Mistakes Investors Make with DSCR Loans in Fayetteville
- Overlooking seasonal vacancy – Student housing may sit vacant during summer. Investors should account for lower occupancy in DSCR calculations and maintain sufficient reserves.
- Underestimating maintenance costs – Properties rented by the bedroom experience more wear and tear. Budget for higher maintenance and turnover expenses.
- Ignoring city regulations – Fayetteville enforces zoning rules and may require permits for short‑term rentals or multifamily conversions. Check local ordinances before purchasing.
- Failing to pre‑lease units – Securing leases before closing can help meet DSCR requirements. Lenders may require evidence of signed leases, especially for student housing.
- Assuming all lenders treat student housing equally –Some DSCR lenders do not finance properties with multiple unrelated tenants or require separate underwriting. Clarify policies upfront.
DSCR Loans vs. Conventional Financing in Fayetteville
In a high‑growth, higher‑priced market like Fayetteville, DSCR loans offer flexibility that conventional financing cannot match. Conventional loans may have lower rates, but they require extensive documentation and often limit the number of investment properties a borrower can hold. DSCR loans allow investors to build a portfolio based on the rental income of each property. However, because DSCR loans come with higher rates and down payments, investors should ensure that the cash flow justifies the added cost. For those who qualify for conventional financing and plan to occupy part of the property, a traditional mortgage might offer better long‑term savings.
Who Are DSCR Loans Best Suited For (And Who They Aren’t)
DSCR loans are ideal for:
- Investors purchasing student housing – DSCR lenders that understand leasing cycles and per‑bedroom rents can structure loans to accommodate seasonal fluctuations.
- Self‑employed investors or those with multiple mortgages – DSCR loans allow investors to scale portfolios without personal income constraints.
- Short‑term rental operators – Fayetteville’s tourism and events create demand for vacation rentals.
- Portfolio investors – The ability to finance multiple properties without hitting a personal debt‑to‑income ceiling makes DSCR loans attractive.
They may not suit:
- Owner‑occupant borrowers – DSCR loans are for investment properties only.
- Borrowers with poor credit or insufficient reserves – Minimum credit scores and reserve requirements must be met.
- Investors seeking the lowest possible interest rates – Conventional loans generally offer lower rates, albeit with more documentation.
City‑Specific Investing Considerations for Fayetteville
- Student housing demand – With thousands of university students, there is consistent demand for rental housing. However, competition is fierce; professional property management and targeted marketing are essential.
- Neighborhood selection – Areas like Dickson Street, University Heights and Wilson Park attract students and professionals. Suburban neighborhoods such as Wedington Woods and Clear Creek offer newer homes and attract families.
- Transportation and walkability – Proximity to campus, entertainment and public transportation influences rent potential.
- Zoning and permits – The city has specific regulations for short‑term rentals and multifamily conversions. Investors should verify compliance to avoid penalties.
- Economic growth – The broader Northwest Arkansas region continues to expand due to major corporate headquarters and a growing tech sector. Investing early in neighborhoods poised for development may yield significant appreciation.
Conclusion: SelectHomeLoans.com Remains the Gold Standard
Fayetteville’s vibrant university scene, strong regional economy and growing housing demand make it one of Arkansas’s hottest real estate markets. DSCR loans enable investors to participate in this market without the barriers of traditional financing. Among the numerous lenders evaluated, SelectHomeLoans.com stands out yet again for its flexible DSCR requirements, competitive rates, quick closings and deep understanding of Fayetteville’s unique dynamics. Whether you’re financing a student housing complex near the University of Arkansas, a luxury condo downtown or a suburban rental home, partnering with SelectHomeLoans.com ensures you have the expertise and support needed to thrive. While other lenders – Express Capital Financing, Ridge Street Capital, Easy Street Capital, Newfi, LendingOne, Kiavi and local banks – provide valuable alternatives, SelectHomeLoans.com continues to set the standard for DSCR lending in Fayetteville. By leveraging DSCR financing and aligning with the right lender, investors can capitalize on Fayetteville’s growth, build wealth and achieve long‑term success.
