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Can lender impose deficiency judgment on Single Family Income property in Arizona.

Tucson, AZ |

I could not sell my single family residence and decided to rent the property. I later refied for a better rate as income property. I understand that they do not persue on owner occupied properties but can the persue a deficiency judgment in this situation as it is now investment home.

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Filed under: Credit Real estate
Attorney answers 2


The Arizona anti-deficiency statutes apply to both owner-occupied and investment residential properties. If you qualify under the statutory criteria, it does not matter whether the dwelling was owner-occupied or an envestment property. Other critical factors may apply, such as whether the loan was a purchase money security interest or if you carry a second or HELOC (home equity line of credit).
But to answer your particular question, the fact that the dwelling is an investment property would not, by itself, disqualify it from being subject to one of our anti-deficiency statutes.
Good luck.


The prior answer is correct. Under Arizona's anti-deficiency legislation you really have to consider only two factors: (1) was the loan "purchase money" and (2) is the property a qualifying property (residential dwelling of single-one-family or two-family home on less than 2.5 acres). There is case law holding that even an investment property can meet the definition of a dwelling. It does not have to be owner-occupied. Because you have a refinance you will also need to consider whether that refinance changed the character of your loan to non-purchase money. In most cases a refinance does not change the character but if you took cash out it may be partially non-purchase money.

You should seek the advice of a lawyer to properly analyze your situation and provide you with a reliable legal opinion. The information you receive online is based on a lot of assumptions, which may or may not apply in your actual situation.

This answer is for informational purposes only. This answer does not constitute legal advice, create an attorney-client relationship, or constitute attorney advertising.