Ann Arbor DSCR Loans: the University Town With the Thinnest Ratio
Program and regulatory figures verified September 10, 2026. Details change; confirm your scenario with us.
Ann Arbor is the University of Michigan, and that one fact drives everything: rents are the highest in the state, vacancy is low, and the gross yield is still the thinnest of the big metros. It underwrites as a stability-and-appreciation play, and the short-term-rental door is mostly closed to investors.
Can I get a DSCR loan in Ann Arbor?
Yes, on 1–4 unit rental property across Ann Arbor and Washtenaw County, from the near-campus blocks to Burns Park, the west side, and out toward Ypsilanti where the ratio loosens. The property's rent against its full PITIA qualifies the loan, documented by Form 1007 or your lease. The core mechanics are in the Michigan DSCR guide; this is the Ann Arbor layer.
The Ann Arbor numbers (highest rent, lowest yield)
Ann Arbor ran a median price near $398,000 in mid-2026 against roughly $2,100 monthly rent, about a 6.3% gross yield, the lowest of Michigan's major metros. On paper that is a hard DSCR, and a retail single-family here rarely clears 1.0 on its own. What Ann Arbor sells instead is durability. The University of Michigan anchors a tenant base that renews every academic year, keeps vacancy low, and pushes rents to the top of the state, and that predictability is worth something the gross yield does not capture. For a DSCR investor the deals that work are multi-unit properties near campus, student-oriented rentals with per-room economics that beat the single-family comp, and Ypsilanti-side buys where prices drop faster than rents.
Ann Arbor short-term rentals: mostly closed to investors
Ann Arbor is one of Michigan's tighter STR regimes, and it is getting tighter. The city charges a $500 short-term-rental license and limits whole-home short-term rentals to a principal residence, which means a non-owner investor cannot run a Detroit-style nightly rental here and cannot underwrite one on projected Airbnb revenue. On top of that, on July 20, 2026 the council voted 8-1 to draft a six-month moratorium on new STR approvals. That moratorium was still a draft, not enacted law, as of our verification, so we treat it as volatile and confirm the live ordinance before touching any Ann Arbor STR file. The safe base case here is long-term rent, and given the U-M demand it is a strong one. The city-by-city detail is in STR permit rules by city.
How we'd play Ann Arbor
Our take: Ann Arbor is a long-term-rental and appreciation market, and the multi-unit near-campus stock is where the DSCR ratio actually works. Chase the per-room rent roll rather than the single-family comp, underwrite the post-sale tax reset honestly (Proposal A applies here as everywhere in Michigan, see rental property taxes), and treat the STR angle as closed unless you are buying an owner-occupied home. Bring us the address and we will run it against real U-M rent comps.
No pressure, no obligation, and no salesy follow-up: a 20-minute call with our team, real numbers, and a straight answer on whether the deal pencils.
Frequently asked questions
Is Ann Arbor a good rental market for investors?
It is a stability play, not a cash-flow one. At a median near $398,000 against roughly $2,100 rent, the gross yield is about 6.3%, the lowest of Michigan's major metros, so a retail single-family rarely clears 1.0. The University of Michigan tenant base is the draw: deep, renewing demand and low vacancy that smooths the pro forma. Multi-unit and near-campus per-room rentals are where the ratio works.
Can I run a short-term rental in Ann Arbor?
Only in your principal residence. Ann Arbor charges a $500 STR license and limits whole-home short-term rentals to owner-occupied homes, so a non-owner investor cannot underwrite an Ann Arbor STR on nightly revenue. The council also voted 8-1 on July 20, 2026 to draft a six-month moratorium, which was not yet enacted, so confirm the live rule before you plan around STR income.
Can I get a DSCR loan in Ann Arbor?
Yes, on 1–4 unit rental property across Washtenaw County, with 20–25% down and 620–660 credit floors typical and LLC vesting at closing. The loan is straightforward; the ratio is the challenge. We steer Ann Arbor buyers toward multi-unit and near-campus stock, and toward the Ypsilanti side where prices fall faster than rents.
Why is Ann Arbor's gross yield so low?
Prices have run ahead of rents. A University of Michigan address commands high prices for stability and appreciation, so even the state's highest rents (near $2,100) divide into a median near $398,000 for only about a 6.3% gross yield. Investors here buy durability and expected growth, and they make the DSCR work with multi-unit rent rolls rather than single-family comps.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. City short-term-rental rules and tax figures change; confirm current requirements with the city, your CPA, or a Michigan real estate attorney before you buy. Loans are subject to buyer and property qualification.