Colorado rentals along the Front Range have built strong equity over the past decade, from Denver and Aurora to Colorado Springs and Fort Collins. A DSCR cash-out refinance lets you tap it based on what the property rents for.
In short: Yes. LendingStreet finances DSCR cash-out refinances on 1-8 unit investment property in Colorado, up to 75% LTV, qualified on the property's rent instead of your tax returns, with a 620 minimum credit score and LLC borrowers standard. In Colorado, insurance for hail and wildfire risk and metro district taxes in newer suburbs are the lines that most often move the ratio.
You take out a new loan larger than your current balance, pay off the old mortgage and keep the difference. On a DSCR cash-out the new loan is sized on the appraised value, up to 75% LTV, compared with up to 80% LTV on a purchase.
The loan qualifies on the debt service coverage ratio: monthly rent divided by the full new payment, meaning principal, interest, taxes, insurance and any HOA dues. A bigger balance means a bigger payment, so it is the ratio after the cash-out that has to clear the 1.0x standard minimum. You do not need W-2s, pay stubs or tax returns, and the loan can close in your LLC.
Denver's older neighborhoods have bungalows, Denver squares and small multifamily, while Aurora, Lakewood, Thornton and Arvada offer newer single-family homes. Colorado Springs draws military tenants from Fort Carson, Peterson and the Air Force Academy, and Fort Collins and Greeley have demand tied to Colorado State and regional employers.
Mountain resort towns are a different market, with high values, seasonal demand and strict local short-term rental rules. Many investors there hold condos or homes that rely on nightly rental income, which narrows the program options.
Colorado's documentary fee is charged on deeds that transfer property and is small, so it typically does not affect a refinance. Expect lender and title fees, the appraisal, recording and escrow deposits. Confirm the figures with your title company.
Your term sheet and closing disclosure list lender costs separately from title, recording and government charges, so you can see exactly what the cash-out costs and how much of the equity reaches you.
| Closing item | How it usually works in Colorado |
|---|---|
| Documentary fee | Small fee on deed transfers; not usually on a refinance |
| Mortgage tax | No state mortgage tax |
| Recording fees | County fees on the new deed of trust |
| Public trustee | Colorado deeds of trust name the county public trustee; release fees apply on payoff |
| Title and settlement | Lender title policy and closing fees |
Colorado's property tax rates are relatively low, and counties reassess residential property on a two-year cycle, so a recent revaluation can change the escrow on your new loan. The state has also adjusted residential assessment rates in recent years, so use the latest bill.
In many newer subdivisions, especially around Denver and Colorado Springs, metropolitan districts add their own mill levies to fund roads, water and amenities. That line can be a large share of the bill, and it counts in the payment.
The Front Range is one of the most hail-prone areas in the country, and many policies carry percentage-based wind and hail deductibles. Homes in the wildland-urban interface face wildfire underwriting, and the 2021 Marshall Fire showed how quickly suburban neighborhoods can be affected.
Get a current quote with the deductible spelled out. A newer impact-resistant roof can help, and in some wildfire areas carriers want defensible space or other mitigation before they will write a policy.
This example is illustrative and not a quote. An investor owns an Aurora rental appraised at $520,000 with $250,000 owed on the current loan. Rent is $3,500 a month and property taxes, a metro district levy, insurance and HOA dues come to $600 a month.
At 75% LTV the new loan is $390,000. Paying off the $250,000 balance leaves $140,000 before closing costs. On a 30-year term, principal and interest is about $2,628, so the full payment is about $3,228 and the DSCR is about 1.08x, above the 1.0x standard minimum.
Put another way, rent would have to fall below about $3,228 a month before this loan dropped under 1.0x, a cushion of roughly $272 a month. Running the same check on your own numbers shows how much cash the rent can actually support.
| Item | Amount |
|---|---|
| Appraised value | $520,000 |
| Loan at 75% LTV | $390,000 |
| Existing loan payoff | $250,000 |
| Cash before closing costs | $140,000 |
| Principal and interest | About $2,628 |
| Taxes, insurance and HOA | $600 |
| Total monthly payment | About $3,228 |
| DSCR at $3,500 rent | About 1.08x |
Denver generally limits short-term rentals to a host's primary residence, which means an investor-owned Denver property is usually financed on long-term rent. Mountain counties and towns, including Summit County, Breckenridge, Steamboat Springs and others, use licensing, caps or zoning limits that change from time to time.
Some STR DSCR programs qualify on projected nightly income, but only where the property can legally operate. Confirm the license status before relying on that income.
Seasoning varies by program. Some allow a cash-out soon after purchase; others want several months of ownership or limit the loan to the purchase price plus documented improvements until the property has been held longer. See our cash-out seasoning guide for how this usually works.
Two limits set your proceeds: 75% of appraised value, and the rent covering the new payment. Whichever is lower wins. On 5-8 unit properties and larger balances the maximum LTV can be lower and varies by program.
If you are unsure which limit applies to you, send the purchase date, rehab costs and rent through the form below and we will run both.
A complete file moves faster through appraisal and underwriting, and lets us quote accurately the first time.
Yes. We finance DSCR cash-out refinances on non-owner-occupied 1-8 unit investment property across Colorado, up to 75% LTV, qualified on rent.
Denver's rules generally limit STRs to a host's primary residence, so an investor property there is usually underwritten on long-term rent. Confirm current city rules.
Yes. Metro district mill levies are part of the property tax bill, which is part of the monthly payment used to calculate the ratio.
Mainly through insurance. Open claims and older damaged roofs can raise premiums or limit carriers. A replaced roof often helps the quote.
No. The loan qualifies on the property's rent. You will still need a 620 or higher credit score, reserves and entity documents if the property is held in an LLC.
It depends on the program. Some allow cash-out shortly after purchase; others require several months of ownership or limit the loan to cost plus documented improvements. Our seasoning guide covers the details.
You can take a smaller loan to bring the ratio up, or look at sub-1.0 DSCR programs, which exist for some properties and borrowers with stronger profiles.
Yes. LLC borrowers are standard on DSCR loans, and the members typically sign for the loan personally. Have the operating agreement, articles and EIN letter ready.
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