Colorado is an exciting place to expand your existing investment portfolio: its strong economy and vast untapped potential means real estate investors who choose to pursue a DSCR loan can.

This detailed article focuses solely on Colorado DSCR loans; we'll discuss the health of the state economy, home values, and the requirements for DSCR loans in Colorado.

As one of the premier lenders nationwide, we offer DSCR loans with a great interest rate and a streamlined mortgage process that allows you to take advantage of a hot market before it cools.



Why Buy an Investment Property in Colorado through DSCR Loans?

Real estate nationwide is heating up, but Colorado bears special attention, as it has incredible socioeconomic metrics for investors.

As its economy and population are only expected to rise, DSCR loans in Colorado are crucial because of their short application time; even a delay of a few weeks or months can make a major difference in whether you can access prime real estate in hot cities.

Powerful Economy 

Colorado is an economic powerhouse at the moment; though growth is expected to slow in 2024, its current growth exceeds the national average, and it boasts one of the lowest unemployment rates in the country.

This is thanks to a highly diversified economy that includes agriculture, transport, advanced manufacturing, aerospace, healthcare, and tourism, which bodes well for those seeking all types of investment properties.

DSCR loans enable real estate investors to jump in and help contribute to the growth of Colorado's booming cities, whether that is through short-term rental property or office buildings.


Strong Population Growth

Colorado's growing population needs housing, making this state a prime investment opportunity for those purchasing residential investment property. World Population Review noted that Colorado is the second-fasting growing state in the US, which is quite impressive for a Rocky Mountain state.

In contrast, neighboring Oklahoma and Nebraska are the nation's 24th and 25th fastest-growing states, respectively.

Unlike many other states, it maintained steady population growth through the pandemic, whereas other states found their populations dropping due to an exodus of remote workers seeking a more relaxing lifestyle.

Rental properties are big here, as over 34% of Colorado residents are renters; if real estate investors can meet the sweet spot between purchase price and rent, they can easily earn excellent rental income from residential tenants.


Shifting Zoning Restrictions

Colorado investors have been watching recent debates about zoning restrictions with bated breath. While the first attempt to improve housing density was shelved at the most recent Senate session, it's clear that change is coming - and you join the push for affordable, multifamily housing through Colorado DSCR loans.



Colorado DSCR Loan Requirements

Debt Service Coverage Ratio (DSCR) loans prioritize property income over personal income: they divide the income generated from the investment property by mortgage payments to discern whether the subject property has a favorable cash flow potential about its debt obligations.

Relying on the DSCR ratio calculation means you don't provide details about your personal finances like tax returns or debt-to-income ratio, making it an attractive option for self-employed borrowers whose job history may reduce their chances of securing traditional mortgages. All that matters is the property's ability to cover its operating expenses, which leads to a streamlined loan process.

Credit Score

For Colorado DSCR loans, many lenders will accept a minimum credit score of just 680, but your opportunity to secure lower interest rates rises precipitously should you have a higher credit score, such as 680.

Appraisal and Rent Schedule

To better understand the property's ability to generate income, it must undergo an appraisal to ascertain whether the property value matches the loan amount. If the property has had previous tenants, expect to submit lease agreements and other documents proving its cash flow.

You must also submit a 1007 Rent Schedule to show the expected rental income based on current market values, which may differ from previous lease agreements.

Minimum Property Value and Loan Value

Most lenders, whether banks, private lenders, or credit unions, will only provide DSCR loans for real estate listed at $1.25k or above. The minimum loan value is usually $75k, though some lenders will provide DSCR loans as small as $55k. As Colorado is a pricey place for investment properties - home prices are nearly 51% higher than the average home value - this minimum amount is rarely a concern for investment opportunities.

DSCR of 1.0 or More

When lenders offer DSCR loans, they want to see that the property's rental income exceeds the debt obligations, meaning it needs a higher DSCR than 1.

The minimum DSCR is generally 1.0, but most lenders prefer a higher DSCR of 1.2 or more, which is why you should consider how to boost the property's net operating income through renovations, rent increases, or adding additional amenities like allowing pets.

LTV of 80% or Lower

The loan-to-value ratio identifies how much lenders will allow you to borrow and sets your down payment requirements. Typically, you'll need a loan-to-value ratio of 80% or less, meaning you will need at least a 20% down payment.

20% Down Payment

As a DSCR loan is a higher risk for lenders, these mortgages have stricter down payment requirements than traditional loans. You should expect to provide at least a 20% down payment, with many lenders requesting 25% or more. As with other loans, you'll also need to provide funds for closing costs.


Best Places for Colorado Real Estate Investments

Real estate investors love Colorado for its vibrant culture, boundless space, and excellent growth potential, but a few areas have gained particular attention for investment properties. These are the hottest markets in the state, and you should take a second look at them when determining where to acquire DSCR loans.

DSCR Loans Colorado

📍 Denver

Denver is the financial capital of Colorado, known for being a tech and healthcare hub. At the end of 2022, average rents for residential rental properties were $1,744, up over 9% from 2021. The average commercial property earned a rental income of $37.38 per square foot. 

📍 Grand Junction

Stunning Grand Junction is known for its abundant outdoor activities, making it an excellent place for tourist shops, hotels, and short-term rental properties. Rents are lower here than in Denver, about $1,450, and retail space costs about $14.28 per square foot. This makes it a great place to break into the market and take advantage of low prices, sure that they will rise.

📍 Colorado Springs

Colorado Springs is upscale and rugged, surrounded by gorgeous scenery and plentiful outdoor activities; residents expect attractive but affordable housing and great employment opportunities at small businesses and offices. Accordingly, it is pricier than Grand Junction, with residential rents at $1,576 and commercial rents at $22.50 per square foot.

📍 Fort Collins

Fort Collins is rife with craft beer breweries, signifying its youthful personality and urban feel. Shopping local is important here, which means that small businesses and startups will thrive - and you can provide the property for them to do so. Even pricier than Denver, the average rental income across all residential properties is $2,200.

However, retail and office space is cheaper, averaging $21.90 per square foot; this signifies a need for further business development, making it an attractive option for commercial rental real estate investors.

📍 Boulder

Boulder prides itself on being a cultural capital, and the walkable downtown space is significant to residents here. Helping develop a 15-minute city through apartments is an excellent option for investors, who can expect an average rental income of $3,000 per month.

There's a clear need for affordable housing within the city, especially as Boulder is one of the most expensive places in the United States to purchase a home.

Commercial rents sit at $30.33 on average, less expensive than Denver but quite high compared to other areas in the state.


Closed DSCR Loans Colorado

Check out some of Visio Lending's recently closed DSCR loans in Colorado.


Steamboat Condo-1


Steamboat Springs, CO

  • $465,000 Loan Amount
  • Purchase
  • STR 
  • DSCR: 1.08
Denver STR


Denver, CO

  • $214,900 Loan Amount
  • Cash-Out Refinance
  • STR
  • DSCR: 1.80
Aurora Rental


Aurora, CO

  • $393,600 Loan Amount
  • Rate & Term Refinance
  • LTR
  • DSCR: 1.105

Frequently Asked Questions 

To calculate DSCR, lenders divide the rental income by the total debt service, called PITIA (principal, interest, taxes, insurance, and association dues), which generates the DSCR ratio. It should be at least 1.2, but preferably 1.25 or higher.

No. Only those property types that produce income are eligible for DSCR loans. Very small rental properties, such as storefronts less than 750 square feet or rural land, are also not eligible. These property types will need to be funded through a conventional loan or a business loan.

Because your eligibility is based on the DSCR ratio rather than your personal income, you can finance promising properties no matter your line of work or other debt obligations.

In addition, you can secure DSCR loans through a company rather than your name, which helps to protect your assets should there be an issue on the property.


A DSCR loan can be as high as $5 million, and there is no limit to the amount of DSCR loans you can access simultaneously. This makes them a better option for real estate, as there are much lower limits for other loan types.

Yes, you can. For example, this is possible if you would like to buy an apartment complex in Colorado Springs and a storefront in Fort Collins. DSCR lenders identify the overall cash flow of all the property included in the loan rather than their location - as long as they are within Colorado.

DSCR Landing Page bottom grpahic (20)-1

Our DSCR Loans in Colorado have:

  • · Full 30 year terms, no balloons for rental residential properties

  • · The ability to finance in an LLC

  • · No tax documents or personal income verification

  • · Real estate investor-friendly loan programs

  • · Interest only loan options


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