With affordable home prices and an impressive 8% rental yield, Colorado is a prime market for investors looking to generate strong cash flow. But if traditional lenders are slowing you down with income verification roadblocks, you’re missing out on prime opportunities. What if you could secure financing based solely on your property’s rental income?
Many investors I’ve worked with faced challenges getting a traditional loan due to high debt-to-income (DTI) ratios or multiple existing mortgages. I helped them qualify for a mortgage with our DSCR loan.
A Debt Service Coverage Ratio (DSCR) loan allows you to qualify for a rental property mortgage without W-2s, tax returns, or personal income verification. Whether you’re targeting Denver’s high-demand short-term rentals or Colorado Springs’ stable long-term investment properties, a DSCR loan can help you scale your portfolio faster and with fewer restrictions.
Apply for a DSCR loan in Colorado today and unlock new investment opportunities!
Key Takeaways:
1. DSCR loans are ideal for expanding rental portfolios, acquiring multiple properties, or leveraging cash-out refinancing—suitable for self-employed individuals in Colorado.
2. No W2s, pay stubs, or tax returns required—skip extensive documentation and get approved quickly by focusing on the property's cash flow.
3. DSCR loans focus on property rental income, not personal income, making them ideal for investors with non-traditional income sources.
Table of Contents
What is a DSCR Loan?
A DSCR (Debt Service Coverage Ratio) loan is a real estate investment loan that allows you to qualify based on your property’s rental income rather than your personal earnings. Instead of requiring W-2s, tax returns, or pay stubs, lenders evaluate the ratio of rental income to mortgage payments to determine eligibility.
For example, a recent investor secured a DSCR loan through HomeAbroad to finance a rental property in Memphis, Tennessee. With a monthly rental income of $1,800 and a mortgage payment of $1,525, they easily met the loan requirements and generated positive cash flow.
In Colorado, where cities like Denver, Colorado Springs, and Boulder offer strong rental yields, the right investment property could pay for itself while generating steady profits. Whether you’re looking to expand your portfolio or secure your first rental property, we can help you find and finance such a property with a DSCR loan.
How to Calculate Your DSCR Ratio
The Debt Service Coverage Ratio (DSCR) is a key metric that lenders use to determine whether a rental property generates enough income to cover its mortgage payments.
If you’re a real estate investor in Colorado, understanding and calculating your DSCR ratio can help you quickly secure the best loan terms and expand your investment portfolio.
The formula for calculating DSCR is:
Let’s apply the DSCR formula using a real-world example of a rental property in Denver, Colorado:
Example
Calculating the DSCR Ratio for a Colorado Property:
How DSCR Matters
- A DSCR of 1.23 means the property generates 23% more income than its total loan obligations, indicating positive cash flow and strong investment potential.
- While most lenders require a DSCR of 1.0 or higher, HomeAbroad offers DSCR loans for properties with a DSCR as low as 0.75, allowing investors more flexibility.
DSCR Loan Interest Rates
Understanding these rates is crucial for investors, as they significantly impact the profitability of investment properties. Before investing, follow our DSCR loan interest rate guide to learn about current DSCR loan interest rates and their influencing factors.
Due to the unique nature of DSCR loans and the associated increased risk for lenders, these rates are typically 1% to 1.5% higher than conventional mortgage rates. For more details on DSCR loans and how they work, visit HomeAbroad’s DSCR loan hub.
How to Qualify for a DSCR Loan in Colorado
At HomeAbroad, we make qualifying for a DSCR loan simple and flexible, whether you’re a domestic investor or a foreign national. Now, let’s learn about our tailored DSCR loan requirements to provide domestic and foreign investors with flexible financing solutions.
| Features | Domestic Investors | Foreign Investors |
|---|---|---|
| DSCR Ratio | 1 or Higher (No Ratio DSCR Program Available) | >= 1 for best terms, <1 eligible with higher down payment |
| Credit Score | 620 or higher | No US credit history required |
| Down Payment | 20% | 25% |
| Loan-to-Value (LTV) | Up to 80% for purchase/refinance Up to 75% for cash-out refinance | Up to 75% for purchase/refinance Up to 70% for cash-out refinance |
| Cash Reserves | 2 months | 6 months |
| Property Use | Investment properties (residential and commercial) | Investment properties (residential and commercial) |
| Loan Amount | $75K – $10M | $75K – $10M |
⚠ No Ratio DSCR Loans are available for properties with DSCR <1, requiring a higher down payment but allowing financing for underperforming or transition properties.
Areas We Lend in Colorado
- Denver
- Colorado Springs
- Aurora
- Fort Collins
- Boulder
- Thornton
- Arvada
- Westminster
- Woodland Park
- Jefferson
- Hartsel
- Guffey
- Florissant
- Lake George
Let’s evaluate a case study of our past client to understand how profitable investing in the Colorado real estate market is.
Case Study: David Expands His Rental Portfolio in Colorado
Property Details:
Location: Denver, Colorado
Property Price: $500,000
Monthly Rent: $4,200
Loan Details:
Loan Amount: $400,000
Down Payment: 25%
Monthly PITIA: $3,375
DSCR Calculation:
DSCR Ratio = Gross Rental Income ÷ PITIA
DSCR = $4,200 / $3,375
DSCR = 1.24
Client: David Thompson
Advisor: Steven Glick, Director of Mortgage Sales, HomeAbroad (NMLS# 1231769)
David Thompson, an experienced real estate investor from California, wanted to expand his rental portfolio by purchasing a single-family property in Denver. He aimed to acquire a high-performing investment while keeping his income separate from his real estate finances.
David worked with Steven Glick, an expert in debt service coverage ratio (DSCR) loans, to achieve this. Steven structured a financing solution that relied solely on the property’s income potential, eliminating the need for traditional income verification.
The HomeAbroad Solution
A DSCR of 1.24 means that the property’s rental income exceeds its debt obligations by 24%, ensuring positive cash flow of $825 and a substantial investment.
This strategy allowed David to expand his rental portfolio successfully, leveraging the property’s income potential without using his income for qualification.
Why This Matters?
Steven Glick highlights the importance of this financing approach:
David’s case is a perfect example of how DSCR loans empower investors to scale their portfolios without traditional income verification hurdles. By structuring the financing around the property’s rental income, we ensured he could secure a high-performing asset in Denver while keeping his personal finances separate. This strategy gave him both flexibility and strong cash flow, making his investment a success.
Steven Glick, Director of Mortgage Sales, HomeAbroad
This case underscores the power of DSCR loans in enabling real estate investors to scale their portfolios efficiently. With expert guidance and tailored financing, David successfully entered one of the nation’s most dynamic rental markets—without the usual income verification roadblocks.
DSCR loans provide an effective, results-driven solution for investors looking to grow their holdings with minimal financial entanglements.
Top Places to Invest in Colorado with DSCR Loan
Colorado offers a strong real estate market with attractive rental yields, making it a prime investment opportunity. With an average home price of around $500,000—higher than the national average of $355,328—investors benefit from steady property appreciation and strong rental demand.
Thanks to top universities and booming industries, cities like Denver, Boulder, and Fort Collins attract long-term demand from students and professionals. Meanwhile, Colorado Springs, Breckenridge, and Aspen thrive on tourism, creating excellent short-term rental potential.
With Colorado’s solid rental yields and access to DSCR loans, investors can secure properties that cover their mortgage and generate positive cash flow.
Here are some top investment cities in Colorado:
City | Rental Type | Rental Yield |
|---|---|---|
Lake George | Short-Term | 11.5% |
Florissant | Long-Term | 10.9% |
Guffey | Short-Term | 9.8% |
Hartsel | Short-Term | 10.2% |
Jefferson | Short-Term | 10.7% |
Woodland Park | Long-Term | 9.8% |
Need help finding the right investment property? Our AI-driven investment property search platform can help you discover high-performing rentals in Colorado or anywhere in the US!
Get a HomeAbroad DSCR loan in Colorado
HomeAbroad simplifies US real estate investment for international buyers with tailored DSCR loans. Whether you’re targeting short-term rentals in Denver, multifamily properties in Colorado Springs, or single-family homes in Aurora, our flexible financing helps you expand quickly.
As a one-stop PropTech and FinTech platform, we offer:
- Foreign National Mortgages for international investors
- AI-Powered Property Search to find high-yield rentals
- 500+ Expert Agents providing personalized guidance
- Concierge Services covering LLC formation, US bank accounts, insurance, and property management
Start building your real estate portfolio in Colorado. Find and finance a rental property that pays for itself while generating steady cash flow. With HomeAbroad’s expert-backed DSCR loans and full-service support, investing in Colorado’s booming market has never been easier.
Apply now and secure your DSCR loan in Colorado with HomeAbroad!
FAQs
Can foreign nationals apply for DSCR loans in Colorado?
Foreign nationals can apply for DSCR loans through HomeAbroad Loans without needing a US credit score, making it a flexible financing option for international investors.
Is cash-out refinancing available for DSCR loans?
HomeAbroad Loans offers cash-out refinancing options for DSCR loans, allowing investors to extract equity from their properties for further investments or renovations.
How long does it take to get a DSCR loan in Colorado?
At HomeAbroad Loans, we streamline the application process, ensuring a smooth experience from loan application to closing. We guarantee that the closing will happen within 30 days.
At HomeAbroad, we ensure the reliability of our content by relying on primary sources such as government data, industry reports, firsthand accounts from our network of experts, and interviews with specialists. We also incorporate original research from respected publishers when relevant. Discover more about our commitment to delivering precise and impartial information in our editorial policy.
Airdna: Rental Data
Zillow: Home Prices
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