Arcadia is the Scottsdale neighborhood where the property can be harder to finance than the borrower. Older custom homes on large irrigated lots, enormous variation in condition between neighbors, and a renovation market that turns a 1950s ranch into something several times its original value. All of that lands on an appraisal, and for a self-employed buyer it lands alongside an income calculation that was already conservative.
Here is how both halves work.
How an underwriter rebuilds your income
Two years of filed returns, through Fannie Mae Form 1084 or Freddie Mac Form 91.
- Schedule C: net profit line 31, plus depreciation, depletion and business use of home added back, minus non-recurring income, divided by 24.
- 1120S and K-1: your W-2 wage counts. K-1 ordinary income counts only where distributions are documented and the business can keep paying them.
- 1065 and K-1: same, with guaranteed payments included.
- Schedule E: rental net with depreciation, taxes, insurance, interest and HOA added back where allowed, minus full PITIA.
Every dollar of aggressive deduction saves tax at your marginal rate and costs roughly four to five dollars of buying power. A year two lower than year one generally becomes your qualifying income rather than the average.
What Arcadia adds
Arcadia straddles the Scottsdale and Phoenix border at the base of Camelback Mountain, known for its mature citrus, flood-irrigated lots and mid-century ranch homes, many of which have been extensively rebuilt.
Condition variance is the defining underwriting problem. On one street you can have an untouched original home, a full down-to-studs renovation, and a tear-down rebuild. To an appraiser these are not the same product, and a comp set that mixes them produces a number nobody agrees with. Expect the appraisal to matter more here than in a production community, and order it early.
Renovation financing is frequently the right tool. If you are buying an original home to rebuild, a purchase loan plus cash is not the only path. Renovation programs let the loan be based on the value after improvements rather than as-is, which is often the difference between the project working and not. That is a different application with contractor documentation, draw schedules and timelines, so raise it on the first call rather than after you are under contract.
Flood irrigation is a real feature with real diligence. Irrigated lots carry water delivery rights and schedules, and that infrastructure needs to be understood before you buy. Ask what the irrigation arrangement is and what it costs.
Older systems mean condition questions. Roofs at end of life, original electrical panels, aging mechanical systems and pre-1978 paint all interact with minimum property requirements on government-backed loans and with appraiser-called repairs on conventional ones.
The price band spans the conforming line widely. Arcadia runs from entry-level original homes to very high end rebuilds, so which side of the conforming limit you land on varies enormously. Above it, reserves held after closing and tighter ratio tolerances apply. See Jumbo Loans in Scottsdale.
No mandatory club obligation and generally no HOA on much of the classic Arcadia inventory, which is genuinely favorable for your ratio compared to the gated communities north of here. Confirm for the specific address.
When the returns do not support the purchase
Take the conventional or agency jumbo if they do. Cheapest money available. When they do not, each of these documents repayment capacity differently and prices differently than agency financing.
Bank statement. Twelve or twenty four months of deposits with an expense factor applied, noting that transfers between your own accounts are stripped from the calculation. See Bank Statement Loans in DC Ranch.
Asset depletion. Qualifying income from verified liquid assets rather than earnings.
No-ratio. No debt-to-income test at all. Credit, assets, reserves and the property carry the file.
Note that renovation programs and non-QM income structures do not always combine. If you need both an unusual income structure and renovation financing, say so early, because the overlap narrows the investor field considerably.
Before you write in Arcadia
- Decide whether you are buying finished or buying a project, and tell your lender which on the first call. It changes the loan.
- Get the property vetted at the same time as the borrower. Roof, electrical, mechanical, and anything pre-1978.
- Ask about the irrigation arrangement and what it costs.
- Order the appraisal early and expect condition variance in the comps.
- Get your CPA and your lender in one conversation before the qualifying returns are filed.
- Get fully underwritten, not pre-qualified. A pre-qualification is a calculator. An underwritten pre-approval means someone read your returns already.
Why bring this file to us
- We ask whether it is a project on the first call, because renovation financing and a standard purchase are different loans and finding out late costs you the deal.
- We read the returns ourselves, add-backs and all.
- Broker model. Multiple investors rather than one bank's shelf, which is what an unusual property plus a self-employed file actually needs.
- The full toolkit, agency and jumbo through renovation, bank statement, asset depletion and no-ratio non-QM.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me the listing and two years of returns before you write in Arcadia, and I will tell you whether it is financeable as-is or whether this is a renovation file.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, and other qualifying factors. Not all applicants will qualify. Renovation, non-QM and no-ratio financing carries different pricing, terms and documentation requirements than standard agency financing. Consult your tax advisor regarding the tax consequences of any deduction strategy.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
