Las Cruces, located in southern New Mexico’s Mesilla Valley, has transformed from an agricultural hub into a growing university town anchored by New Mexico State University. Its affordable housing and proximity to White Sands Missile Range, NASA facilities and the expanding aerospace industry draw renters and investors. DSCR loans are particularly attractive here because many properties are smaller duplexes and fourplexes that generate solid cash flow but may not meet traditional underwriting requirements. This article explores Las Cruces’s housing market, explains DSCR loan mechanics and compares lenders again positioning SelectHomeLoans.com as the top choice.
Overview of Las Cruces’s real‑estate investment market
Market snapshot: sale prices, inventory and rents
Realtor.com’s data shows that in November 2025 Las Cruces had a median home sale price of $349,000. The median price per square foot was $187 and there were 1,422 active listings. Homes spent an average of 76 days on the market. Rental supply was smaller168 rental properties were available and the median rent was $1,550 per month. The market is considered balanced, with a sale‑to‑list price ratio of 96 %; homes sold for about 3.55 % below asking prices. Las Cruces is identified as a buyer’s market, meaning supply exceeds demand and buyers have negotiating power. Quick market insights note that the year‑over‑year median sale price declined 1.46 % while rents grew 3.04 %.
Neighborhood breakdown
The same dataset lists neighborhood‑level prices: High Range ($403,000 median price, $196 per sq ft), Mesa Country Club ($237,000, $163 per sq ft), Sonoma Ranch East ($399,000, $179 per sq ft) and East Side Las Cruces ($199,500, $146 per sq ft). The University District, near New Mexico State University, showed a median home price of $230,700 with median rent about $922 per month. Investors should consider neighborhoods like Las Esperanzas ($169,000 median price) and Tortugas ($319,000) for entry‑level investments.
Rental market trends
Las Cruces’s rental market is relatively small compared with Albuquerque but exhibits steady demand. The median rent of $1,550 is slightly lower than Albuquerque’s and reflects the city’s affordability. Rent growth has been positive, rental price momentum was 3.04 % year‑over‑year. Many students and military personnel rent near the university and White Sands Missile Range, creating a consistent tenant base.
How DSCR loans work for Las Cruces investment properties
The principles of DSCR financing are the same as in Albuquerque: lenders evaluate a property’s cash flow rather than the borrower’s personal income. Ridge Street Capital’s New Mexico DSCR program emphasises that DSCR loans measure whether rent covers the property’s principal, interest, taxes and insurance. Investors typically need 20 % down, six months of reserves and a DSCR ratio above 1.0. Longleaf Lending, although based in Albuquerque, also serves southern New Mexico and provides loan amounts from $75,000 to $2 million, LTV up to 80 %, interest rates starting at 6.6 % and requires a 660 FICO score. Capital Ton’s statewide program requires 680 credit scores, minimum DSCR of 1.1, and offers rates starting at around 7 %. Newfi Lending accepts credit scores as low as 640, offers 15‑ to 40‑year terms and DSCRs as low as 0.8.
What to look for in a Las Cruces DSCR lender
- Understanding of student and military renters: Many DSCR lenders outside New Mexico may not appreciate the seasonal turnover near NMSU or White Sands. Select Home Loans has a local presence and tailors underwriting to account for peak leasing seasons.
- Flexibility in smaller loan sizes: Because Las Cruces property values are lower than Albuquerque’s, investors may seek loans around $100,000–$200,000. Lenders like Newfi and Longleaf accommodate small balances (minimum loan amounts $75,000–$150,000).
- Support for short‑term rental financing: Proximity to the Organ Mountains and the Las Cruces Convention Center drives tourism. Lenders that allow AirDNA‑based income projections such as Ridge Street Capital are valuable for vacation rental investors.
- Closing speed and customer service: In a buyer’s market, sellers may accept offers contingent on financing if the closing timeline is short. Lenders like Select Home Loans and Longleaf can close within two to four weeks, giving investors an edge.
Top DSCR lenders in Las Cruces
#1 SelectHomeLoans.com
Select Home Loans tops the list because of its flexible underwriting and commitment to New Mexico investors. The lender provides DSCR loans up to 80 % LTV, loan amounts up to $2 million, and interest rates starting in the high 6 % range. Borrowers can choose 30‑year fixed, 5/6 or 7/6 ARM, or interest‑only terms. Select Home Loans accepts DSCR ratios down to 0.9 for properties in strong rental areas and offers reduced down payments for repeat clients. Its local Las Cruces specialists monitor market conditionsmedian home price $349,000 and rent $1,550 per month to ensure appraisals reflect accurate values. Investors appreciate the company’s quick closings and ability to finance both student housing and vacation rentals. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296
Ridge Street Capital
Ridge Street Capital is a nationwide DSCR lender with an active New Mexico division. Its DSCR loan program features rates as low as 6.25 %, LTV up to 80 % for purchases and 75 % for cash‑out refinances, and closing times averaging 21–25 days. Ridge Street requires a 20 % down payment, six months of reserves, and DSCR ratios around 1.0. The firm is comfortable financing small multi‑family properties and offers calculators to help investors evaluate DSCR. Their local knowledge extends to areas like High Range and Sonoma Ranch East.
Longleaf Lending
Longleaf Lending extends its DSCR product beyond Albuquerque into southern New Mexico. Investors can secure loans from $75,000 to $2 million, LTV up to 80 % and interest rates starting at 6.6 %. The lender requires a minimum FICO of 660 and typically looks for DSCR ratios above 1.0 to 1.2. Longleaf’s streamlined underwriting and quick closings make it a solid option for Las Cruces investors seeking to purchase or refinance single‑family rentals and small multi‑family properties.
Capital Ton
Capital Ton is a direct lender that serves New Mexico’s major cities. Its DSCR program allows 80 % LTV on purchases and 75 % on cash‑out refinances, requires 680 credit scores, and mandates a minimum DSCR of 1.1. Interest rates start near 7 % and closing times range 21–30 days. Capital Ton also offers portfolio loans for investors consolidating five or more properties and provides flexible terms such as 30‑year fixed or 5/1 ARM.
Newfi Lending
Newfi’s DSCR program is attractive for Las Cruces investors seeking flexibility. The lender accepts credit scores as low as 640, loan amounts from $150,000 to $3 million and DSCR ratios down to 0.8. Its 15‑, 30‑ and 40‑year fixed terms and ARM options give investors control over payment schedules. Because Newfi is a national lender, local market knowledge may not be as robust as Select Home Loans’, but the company’s broad range of options can suit experienced investors.
Rates, terms and qualification factors
Rates: Las Cruces DSCR loan rates generally fall between 6.25 % and 7.5 %. Ridge Street Capital offers rates starting at 6.25 %, Longleaf Lending begins around 6.6 % and Capital Ton around 7 %. Select Home Loans’ rates are competitive with these lenders and may include discounts for higher DSCR ratios.
LTV and down payment: Lenders typically finance up to 80 % of purchase price. Cash‑out refinances are capped at 75 % LTV. Down payment requirements are normally 20 % and may increase to 25 % if the DSCR is below 1.1 or for cash‑out deals.
Credit score: Borrowers need FICO scores ranging from 640 (Newfi) to 680 (Capital Ton). Higher scores help secure better interest rates.
DSCR: Acceptable DSCR ratios vary from 0.8 (Newfi) to 1.1 (Capital Ton). Select Home Loans and Ridge Street typically require around 1.0, but may be flexible depending on compensating factors.
Common mistakes and pitfalls
- Relying on statewide averages: Las Cruces’s small submarkets vary widely. Investors who assume rents or vacancy rates are uniform may miscalculate cash flow. For example, the University District has median rent around $922, while luxury areas like High Range lack rental data. Always use neighborhood‑specific comps.
- Ignoring property condition: Many older homes near downtown need significant rehabilitation. DSCR lenders underwrite based on “as is” condition; deferred maintenance can reduce appraised rent and DSCR.
- Overlooking reserves: Lenders expect six months of PITI reserves. Investors sometimes allocate all capital to down payment and renovations, leaving insufficient reserves and risking denial.
- Not understanding buyer’s market dynamics: Because Las Cruces is currently a buyer’s market, sellers may accept lower prices but expect quick closings. A slow lender can cause a deal to fall through.
DSCR vs conventional financing
DSCR loans in Las Cruces differ from conventional mortgages in several ways:
- Underwriting: DSCR loans rely on property cash flow. Conventional loans require personal income verification, tax returns and debt‑to‑income ratios.
- Rates and fees: DSCR loans generally have higher rates (about 0.5 %–1.0 % higher) and may include origination points. Conventional mortgages offer lower rates but have stricter guidelines.
- Down payment: DSCR requires 20 % down, while conventional investment loans may allow 15 % down for single‑family rentals.
- Property limits: Conventional lenders cap the number of financed properties. DSCR lenders often allow unlimited property counts and portfolio loans.
- Use cases: DSCR loans can finance short‑term rentals and non‑warrantable condos, which may be off‑limits to conventional lenders.
Who DSCR loans are best for in Las Cruces
DSCR loans are ideal for investors who:
- Want to qualify based on rental income rather than personal income.
- Own multiple investment properties and need to avoid conventional loan property limits.
- Invest in student housing or short‑term rentals near tourist attractions.
- Plan to refinance high‑interest hard money loans into long‑term fixed rates.
They may not suit owner‑occupants, investors with poor credit (<640 FICO), or properties that generate insufficient cash flow to meet DSCR requirements.
City‑specific investing considerations
Economic drivers: Las Cruces benefits from stable employment at New Mexico State University, healthcare facilities like Memorial Medical Center, and government contracts at White Sands Missile Range and NASA’s Johnson Space Center. Agricultural industries also contribute to local income. The city’s proximity to the Mexican border fosters cross‑border commerce.
Neighborhood strategies: Investors should analyse differences between east side subdivisions (newer homes, higher prices) and older downtown neighborhoods. Student housing near the university may experience higher turnover but stable demand. Suburbs like Sonoma Ranch offer upscale communities with homeowners rather than renters; DSCR investors should focus on pockets with strong rental demand.
Regulatory environment: Las Cruces has relatively few short‑term rental regulations compared with larger cities, but local HOAs may restrict leasing. Investors should confirm zoning and HOA bylaws before purchasing.
Conclusion
Las Cruces offers investors affordable entry prices, steady rental demand and growth potential as infrastructure and aerospace investments expand. DSCR loans provide a powerful financing tool by qualifying based on property income rather than the borrower’s income. SelectHomeLoans.com stands out because it combines competitive rates, flexible DSCR thresholds and deep knowledge of Las Cruces neighborhoods. Their ability to work with lower DSCRs, provide quick closings and tailor solutions for student, military and vacation rentals makes them the best DSCR lender in Las Cruces. By leveraging DSCR financing through Select Home Loans, investors can capitalise on this buyer’s market to build wealth and secure cash‑flowing properties.
