From the Front Range suburbs to Colorado Springs and Pueblo, investors use short-term money to buy and fix, then need permanent debt the rent can carry. A DSCR rate-and-term refinance swaps that loan for a fixed long-term payment.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Colorado, up to 80% LTV on some programs, qualified on the property's rent with no W-2s or tax returns. The new loan pays off your existing hard money, bridge or higher-rate loan plus closing costs, with only a small amount of cash back allowed on most programs. Our investor loans are business-purpose loans on non-owner-occupied property, starting at $150,000 with a 620 minimum credit score. In Colorado, roof and hail exposure in the insurance quote and local short-term rental rules are the items that most often change the numbers.
This kind of refinance swaps one loan for another. The new loan pays off the old one plus closing costs, and the cash you can receive at closing is limited to a small allowance that varies by program. Anything more is treated as a cash-out refinance with a lower LTV ceiling.
The appeal is leverage and terms. Some programs allow up to 80% LTV on a rate-and-term, and 30-year terms are available. The file is underwritten on the property's rent compared with the new payment, with a standard minimum DSCR of 1.0x and a 620 minimum credit score.
Colorado rental stock ranges from 1950s ranches and bi-levels in Aurora, Lakewood and Colorado Springs to newer tract homes in the northern suburbs and small brick multifamily in older Denver neighborhoods. Investors often buy a dated home with hard money, renovate and need to exit before the loan matures. Others hold a loan with a rate that adjusted upward and want to fix the payment.
Because the loan qualifies on rent, the refinance does not depend on your personal income, which matters to investors whose tax returns show heavy depreciation or self-employment write-offs. The property has to carry itself, and that is the test.
The most common rate-and-term refinance we see is the exit from short-term debt. You bought with a hard money or bridge loan, finished the work, placed a tenant and now need permanent financing before the short-term loan comes due. The bridge-to-DSCR guide walks through timing in more detail.
How the new loan is sized depends partly on how long you have owned the property. Some programs use the new appraised value after a period of ownership; others cap the loan near your cost basis if you bought recently. Seasoning rules vary by program, so check them before you count on the after-repair value.
Colorado charges a small documentary fee on deeds, and there is no state mortgage recording tax, so a straight refinance mostly involves recording fees, title, appraisal and lender costs. A few mountain towns charge local real estate transfer taxes on sales, which generally do not apply to a refinance.
Colorado closings use deeds of trust and the county public trustee system for releases. If you are moving title into an LLC at the same time, confirm the recording requirements with your title company.
Hail is a real cost along the Front Range. Many insurers use separate wind and hail deductibles, often a percentage of the dwelling coverage, and roof age can drive the premium. Get a current quote and know the deductible.
Colorado property taxes are moderate compared with many states, though assessed values and rates have changed in recent years and vary by county and district. HOA dues are common in newer suburbs. Use the actual figures for the property in the DSCR math.
This example is illustrative and not a quote. An investor owns a four-bedroom bi-level rental in Colorado Springs appraised at $470,000. The existing hard money loan from the purchase and rehab has a payoff of $340,000, costs about $2,980 a month interest-only and matures in 4 months. Rent is $2,800 a month, and taxes, insurance and any HOA dues run $330 a month.
Rolling about $8,500 of closing costs into the loan gives a new balance of $348,500, or about 74.1% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $2,348, so the full payment is about $2,678 and the DSCR is about 1.05x. The short-term maturity is gone and the payment is fixed. That ratio is close to the 1.0x minimum, so a higher insurance quote or tax bill could push it under; check both before you apply.
| Item | Amount |
|---|---|
| Appraised value | $470,000 |
| Existing loan payoff | $340,000 |
| Closing costs rolled in | $8,500 |
| New loan amount | $348,500 |
| Loan-to-value | 74.1% |
| Principal and interest (30 years) | About $2,348 |
| Taxes, insurance and HOA | $330 |
| Total monthly payment | About $2,678 |
| Monthly rent | $2,800 |
| DSCR | About 1.05x |
Both are qualified on rent, but the purpose drives the limits. A quick side-by-side helps decide which one fits the property.
Some investors in Colorado do both in stages: a rate-and-term refinance to exit short-term debt now, then a cash-out later once seasoning and value support it. Others go straight to cash-out if the appraisal is strong and they need capital for the next deal.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing loan and costs | Pay off loan and take equity |
| Maximum LTV | Up to 80% on some programs | Up to 75% |
| Cash at closing | Small allowance, varies by program | Up to the LTV limit |
| Minimum DSCR (standard) | 1.0x | 1.0x |
| Minimum credit score | 620 | 620 |
| Income documents | Rent only, no W-2s or tax returns | Rent only, no W-2s or tax returns |
Denver, Aurora, Lakewood, Westminster and Thornton make up the core of the Front Range rental market. Colorado Springs has steady demand tied to several military installations. Fort Collins and Greeley draw university and regional employment demand, and Pueblo offers lower prices. Denver allows short-term rentals mainly in a host's primary residence, and many mountain towns cap or license STRs, so confirm local rules before relying on nightly income.
These items cover most of what underwriting will ask for. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet offers rate-and-term DSCR refinances on 1-8 unit investment properties in Colorado, from $150,000 with no stated maximum, qualified on the property's rent.
Denver allows short-term rentals mainly in a host's primary residence, so a non-owner-occupied investment property there usually needs a long-term lease to qualify. Other Colorado towns have their own rules.
Only a small amount on most programs, and the allowance varies by program. If you want to pull equity out, a cash-out refinance up to 75% LTV is the better fit.
Insurance is part of the DSCR payment, and Front Range hail risk often raises premiums and deductibles. A newer roof can help with both.
Often, yes, but seasoning rules vary by program. Some use the new appraised value; others cap the loan near your cost basis if you bought recently.
Colorado's documentary fee applies to deeds, not a typical refinance, and there is no state mortgage tax. Some mountain towns have transfer taxes on sales only.
Standard programs require a minimum of 1.0x, meaning rent covers the full payment. Sub-1.0 programs exist for properties that fall short, with tighter terms.
Yes. 30-year terms are available on DSCR loans, which is the main reason investors use a rate-and-term refinance to replace short-term or balloon debt.
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