I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. Call (800) 239-1103.
Some transactions define what a specialty mortgage broker actually does for a living. This was one of them.
A $1,430,000 investment property in Palm Springs. Indian leased land. An LLC as the borrower. Income qualified on a CPA-prepared profit and loss statement — no tax returns. A 30-year fixed rate with 10 years of interest-only payments. And a Bureau of Indian Affairs review at the end that added time to an already complex escrow.
No major bank would touch this file. I closed it. Here’s how — and what every investor looking at Palm Springs short-term rentals should understand before writing an offer.
The Loan at a Glance
| Detail | Transaction |
|---|---|
| Purchase price | $1,430,000 |
| Down payment | 20% / $286,000 |
| Loan amount | $1,144,000 |
| Loan type | 30-year fixed, non-QM jumbo |
| Payments | 10 years interest-only, then 20 years amortizing |
| Income documentation | 12-month CPA-prepared P&L |
| Occupancy | Investment / short-term rental |
| Land | Agua Caliente Indian leased land (BIA approval required) |
| Borrower | LLC, with the individual investor guaranteeing and qualifying |
The Property
This wasn’t a speculative buy. The home had a documented track record as a short-term rental. Palm Springs’ high season runs roughly from fall through spring, and demand spikes around the Coachella Valley Music and Arts Festival and the Stagecoach festival, both held in nearby Indio each April. The investor had found the right property. The problem was financing it.
Why a Major Bank Couldn’t Do This Loan
It wasn’t one complication — it was five, stacked together.
1. Indian leased land
Much of Palm Springs sits on land held in trust for the Agua Caliente Band of Cahuilla Indians and its members. The buyer owns the house and the leasehold, not the land, and any mortgage on a residential lease of trust land needs BIA approval of the leasehold mortgage. Many lenders — and most big-bank retail channels — simply don’t have a process for it. Federal rules give BIA 20 days after it receives a complete package; in my experience that step comes after the lender’s final approval and adds a couple of weeks to the end of escrow. You have to build that into the offer and the rate lock.
2. P&L-only income
My client is a business owner whose tax returns, legitimately written to minimize taxable income, showed far less than the business actually produces. That’s common, and it’s a problem for traditional underwriting built on two years of tax returns. We qualified the loan on a 12-month profit and loss statement prepared by the borrower’s CPA — an alternative-documentation, non-QM loan. Fully underwritten, just not something Fannie Mae or Freddie Mac buy.
3. Jumbo loan amount
At $1,144,000, the loan was well above Riverside County’s 2026 conforming limit of $832,750. That rules out conforming financing, and FHA and VA don’t apply to an investment property. It takes a portfolio or non-QM lender with an appetite for complex files.
4. Interest-only payments
We structured a 30-year fixed rate with a 10-year interest-only period. For the first decade the payment covers interest only, which materially improves cash flow on a rental. Interest-only loans can’t be Qualified Mortgages under the federal ability-to-repay rules, and the agencies don’t buy them — another reason this had to be non-QM.
5. LLC ownership
The property was purchased in an LLC rather than the investor’s personal name — common for short-term rentals, where guest liability is a real risk. Fannie Mae and Freddie Mac loans are made to individuals, not LLCs, so conventional was out. Non-QM investment lenders do lend to LLCs, with the individual guaranteeing the loan and qualifying for it. (An LLC is a legal and tax decision as much as a lending one — talk to your attorney and CPA. See buying a home in an LLC.)
Why “No Major Bank” Isn’t Just a Line
Big retail banks can do plenty of loans, including some jumbo portfolio loans. But the combination here — an LLC borrower, P&L-only income, interest-only payments on an investment property, and a tribal leasehold — falls outside the product boxes most of them offer. The borrower wasn’t declined for credit or assets; the structure simply didn’t exist on their menus. Non-QM lenders underwrite to their own guidelines and hold or sell loans outside the agency system. Knowing which of them will accept each piece of a file like this — and presenting it so they say yes — is the job.
What STR Investors Need to Check in Palm Springs
- City rules. The City of Palm Springs requires vacation rental registration and limits how many vacation rentals can operate in each neighborhood. Confirm the property can be registered before you remove contingencies.
- HOA restrictions. Many Palm Springs communities prohibit rentals shorter than 30 days, and some set longer minimums. An HOA restriction controls regardless of what the city allows. Read the CC&Rs, rules, and recent minutes.
- Jurisdiction. Properties outside city limits may fall under Riverside County rules instead.
- The lease. Remaining term, ground rent, and adjustment schedule all affect your returns — and your eventual buyer’s ability to finance.
The property in this case had no HOA rental restrictions, which was part of why the investment made sense.
The BIA Timeline in Practice
Once the lender issued final approval, the leasehold mortgage package went to BIA. BIA confirms the lease is valid and in good standing and approves the lender’s leasehold mortgage. On leased-land purchases I plan for a 45–60 day escrow and set rate locks to match. Agents who haven’t closed a leased-land deal often underestimate this step; it’s the most common reason these escrows run late.
The Result
Final approval issued. File submitted to BIA. BIA approval came back within the expected window, and escrow closed. My client now owns a $1.43 million Palm Springs investment property, held in an LLC, with an interest-only payment that supports cash flow, qualified on real business income — on Indian leased land most lenders wouldn’t consider.
That’s the job.
Frequently Asked Questions
Can I buy a Palm Springs investment property on leased land in an LLC?
Yes, through non-QM investment lenders that accept both LLC borrowers and Agua Caliente leaseholds. The individual investor typically guarantees the loan and qualifies with income, bank statements, a P&L, or the property’s rental income. Conventional loans aren’t made to LLCs.
Can I get an interest-only loan on a Palm Springs rental?
Yes, from non-QM lenders. Interest-only loans can’t be Qualified Mortgages and aren’t bought by Fannie Mae or Freddie Mac, so they come from portfolio and non-QM lenders, usually with a larger down payment and reserves.
How long does closing take on Indian leased land?
BIA must approve the leasehold mortgage and has 20 days after receiving a complete package. Because that happens near the end, I plan for a 45–60 day escrow on leased-land purchases.
Related Resources
- Palm Springs Leased Land Mortgage Guide
- What Happens When a Palm Springs Ground Lease Expires
- DSCR Loans for Short-Term Rentals
- Non-QM Mortgages in California
- Interest-Only Mortgages in California
- Buying a Home in an LLC
- Coachella Valley Mortgage
Official Sources & References
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
