DSCR Loans in Colorado

A DSCR loan qualifies you on what the property earns rather than what you earn. That makes it the default financing for buy-and-hold investors in Colorado — and it also makes Colorado one of the harder states to clear the ratio in, because Front Range prices run high relative to achievable rents. This page covers the arithmetic, what it takes to qualify, and what to check before you write an offer here.

Qualify on

The property’s rent — no W-2s or personal tax returns

Max LTV, purchase

Up to 85%

Max LTV, rate & term refinance

Up to 85%

Max LTV, cash-out

Up to 80%

Rate range

6.4% – 7.1% (as of August 2026)

Minimum DSCR ratio

1.0 standard — as low as 0.75 with documented income or bank statements

Minimum credit score

680

Vesting

Individual or entity — LLC, S-corp, C-corp, partnership

Properties financed

No cap

Typical closing

21–30 days

Leverage shown is the maximum available on a strong file, not what every deal receives, and is subject to underwriting. Rates as of August 2026 and subject to change. This is not a commitment to lend.

The arithmetic, and why Colorado is tight

DSCR is one division: the property’s monthly rent divided by its full monthly payment — principal, interest, taxes, insurance, and any HOA dues. A ratio of 1.0 means rent exactly covers the payment. 1.25 or higher generally earns the strongest pricing, because the file has margin.

The part investors miss is the denominator. Taxes, insurance, and HOA dues all sit in it, so two properties with identical rent and identical purchase price can land on opposite sides of 1.0 on the strength of an HOA alone. Before you fall for a condo, price the dues.

Along the Front Range, purchase prices relative to achievable rents make 1.25 harder to clear than in much of the country. That is not a reason to avoid Colorado — it is a reason to run the number before you spend money on an inspection. Send us the address and the rent and you will get a straight answer, including when the answer is that the deal does not work.

Denver metro, specifically

Denver-metro deals are where the ratio gets decided. Higher-priced infill properties tend to produce weaker ratios than their appreciation story suggests, while the outer metro — Aurora, Commerce City, parts of Adams and Arapahoe County — more often pencils on rent. Neither is a rule, and we would rather run your specific address than hand you a heuristic.

Two line items deserve attention on a Denver file. Colorado property tax assessments have moved meaningfully in recent years, and an assessment that resets after you buy can push a ratio underwater that qualified at application. Insurance is the other: Front Range hail exposure prices differently than much of the country, and a quote pulled late can undo the math. Get both estimated early rather than at underwriting.

Short-term rentals: check the municipality first

We underwrite DSCR loans on short-term rentals as well as long-term leases, using market rent analysis or the property’s own rental history. In Colorado the constraint is usually not financing — it is local law.

Short-term rental rules here are set municipally, not statewide, and they vary sharply. Denver has long tied short-term rental licensing to the host’s primary residence, which rules out the classic buy-a-condo-and-list-it plan inside city limits. Mountain towns run their own regimes, several with license caps or waiting lists. These ordinances change, and they change faster than any article about them.

So confirm licensing and occupancy rules with the specific municipality before you write an offer, not after. Discovering a permit problem during underwriting is an expensive way to learn the local code, and it is the single most common way a Colorado short-term-rental deal falls apart.

When the rent does not cover it

Plenty of good Colorado deals miss on ratio alone. When the rent schedule will not carry the payment, the usual move is not a bigger down payment — it is a different program. A bank statement loan qualifies you on 12–24 months of deposits instead of the property’s rent, which is often the cleaner path for a self-employed investor whose returns understate real income.

That is a judgment call worth making before you are under contract, because switching programs mid-file costs time you may not have. If the ratio looks marginal, say so up front and we will price both.