DSCR loans in Colorado
Qualify for a rental property on its rent, not your tax returns
DSCR loans look at whether the property's rent covers its payment. A fit for self-employed investors, business owners and anyone growing a rental portfolio.
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How DSCR works
The debt service coverage ratio compares the property's monthly rent with its full monthly payment.
The formula
DSCR = monthly rent ÷ monthly PITIA
Principal, interest, taxes, insurance and association dues
Example: $3,000 rent ÷ $2,700 payment = a DSCR of about 1.11. Many lenders look for 1.0 or higher; some go lower with more down. Varies by lender.
Why investors choose DSCR
No personal income docs
Straightforward math
Buy in an LLC
Room to grow a portfolio
Who DSCR loans fit
Investors with solid rental cash flow but tax returns that make conventional qualifying hard.
- Self-employed investors whose tax returns show low income after write-offs
- Landlords near the conventional limit on financed properties
- Investors buying in an LLC
- Short-term rental hosts in Colorado mountain towns
- Foreign nationals, with some lenders
Typical DSCR requirements
- DSCR
- Often 1.0+; some lenders accept 0.75, and no-ratio options vary
- Down payment
- Typically 20–25%; more for lower ratios, no-ratio or short-term rentals
- Credit score
- Often about 620–680+, depending on the lender and loan-to-value
- Reserves
- Several months of payments; varies by lender
- Property types
- Single-family, 2–4 units, condos (including some non-warrantable)
- Vesting
- Personal name or LLC
DSCR loan questions
A DSCR (debt service coverage ratio) loan qualifies the loan on the property's rental income compared with its monthly payment — principal, interest, taxes, insurance and HOA dues — rather than on your personal income. If the rent covers the payment by the ratio the lender requires, you can qualify without personal tax returns or W-2s.
Many DSCR lenders look for a ratio of 1.0 or higher, meaning the rent covers the full payment. Some accept 0.75 or offer no-ratio programs, usually with a larger down payment (often 25–30% or more) and reserves. Higher ratios generally get better pricing. Varies by lender.
Usually not. DSCR lenders generally don't ask for tax returns, W-2s or pay stubs. The loan is qualified on the property's income, verified through an appraisal rent analysis or an existing lease. You'll still need to document your down payment, reserves and credit.
Typically 20–25% down. More may be required for ratios below 1.0, no-ratio programs, lower credit scores or short-term rentals. Varies by lender.
Yes, with many lenders. Some use the property's actual booking history or a short-term rental projection from a data provider such as AirDNA to establish income. That makes DSCR a common choice for vacation rental investors in markets like Breckenridge, Keystone and Vail.
Many purchase loans close in about 30–45 days. With a complete file and a responsive title company, some close in as few as 21 days. Because there's no personal income to verify, DSCR files often have fewer conditions.
See if a DSCR loan fits your next property
Get pre-approved, or call Andrew with the address and expected rent and he'll run the numbers.