Why Choose A Colorado DSCR Second Loan?
Access your investment property's equity without refinancing your first mortgage
Second Lien Position
Keep your existing first mortgage while accessing additional equity through a second lien
No Income Docs
Qualify without tax returns, W-2s, or pay stubs — property cash flow determines approval
Fast Closings
Close in as little as 21-30 days with streamlined non-QM underwriting process
All Property Types
Single-family, multi-family, condos, and townhomes throughout Colorado
What is a DSCR Second Loan?
A Debt Service Coverage Ratio (DSCR) second loan is a non-QM investment property loan in second lien position that qualifies investors based on the property's rental income instead of personal income. The rental income should cover both the first mortgage and second lien payments.
DSCR Formula
DSCR = Rental Income ÷ (First Mortgage + Second Loan)
Benefits of Second Lien Position:
- Keep your existing first mortgage rate
- Access equity without disrupting current financing
- Maintain existing loan terms on first mortgage
Colorado DSCR Second Loan Features
- Loan Amounts: $150,000 minimum
- DSCR Required: 1.0+ on combined debt service. Minimum 0.80 allowed
- Combined LTV: Up to 80% (including first mortgage)
- Property Types: 1-4 units, condos, mixed-use residential
- Second Lien Position: Behind existing first mortgage
- Cash-Out: Use funds for business, the property, or debts
- Portfolio Building: Perfect for acquiring additional properties
Perfect For:
- Property improvements and renovations
- Down payments on additional properties
- Business investments
- Debt consolidation
DSCR Fixed Rate Second vs DSCR First Lien HELOC
DSCR Fixed Rate Second
Loan Structure:
- 30-year fixed term
- Fixed interest rate
- Predictable monthly payments
- Prepayment penalty (typically 1-5 years)
Best For:
- • Long-term equity access
- • Rate stability preference
- • One-time large expense
- • Large lump sums or debt consolidation
- • Predictable budgeting needs
Key Consideration:
Prepayment penalty means you'll pay a fee if you pay off the loan early, but you get the security of a fixed rate for the full 30-year term.
DSCR First Lien HELOC
Loan Structure:
- 3-year draw period
- 27-year repayment period
- Variable interest rate
- No prepayment penalty
Best For:
- • Flexible access to funds
- • Multiple projects over time
- • Interest-only draw period
- • Properties with loan paid off or low mortgage balances
- • Portfolio expansion strategy
Key Consideration:
No prepayment penalty offers flexibility, but variable rates mean payments can change. Draw period allows interest-only payments initially.
Side-by-Side Comparison
| Feature | DSCR Fixed Rate Second | DSCR First Lien HELOC |
|---|---|---|
| Interest Rate | Fixed for 30 years | Variable (adjusts with prime rate + margin) |
| Loan Term | 30 years | 3-year draw + 27-year repayment |
| Payment Structure | Principal & interest from day one | Interest-only during draw period |
| Prepayment Penalty | Yes (typically 1-5 years) | No |
| Access to Funds | Lump sum at closing | Draw as needed after minimum initial draw |
| Rate Risk | No rate risk | Subject to rate increases and decreases |
Colorado Investment Property Markets We Serve
Denver Metro Area
Strong rental demand and property appreciation make Denver ideal for DSCR second loans.
- • Downtown Denver
- • Cherry Creek
- • Capitol Hill
- • Highlands
- • LoDo
Boulder County
University town with consistent rental demand and high property values.
- • Boulder
- • Lafayette
- • Louisville
- • Longmont
- • Erie
Colorado Springs
Military and tech hub with growing investment opportunities.
- • Downtown Colorado Springs
- • Old North End
- • Broadmoor Area
- • Manitou Springs
- • Security-Widefield
Mountain Communities
High-value vacation rental and investment properties.
- • Vail & Beaver Creek • Aspen & Snowmass
- • Breckenridge • Keystone
- • Steamboat Springs • Winter Park
Fort Collins & Northern Colorado
College towns and growing suburban markets.
- • Fort Collins • Loveland
- • Greeley • Windsor
- • Evans • Johnstown
What Documentation Do You Need?
DSCR second loans require minimal documentation compared to traditional second mortgages. Here's what you'll typically need:
Property Documentation
- Current lease agreement OR market rent analysis (appraisal)
- Property insurance information
- Property tax statements
- HOA documents (if applicable)
- First mortgage statement (if applicable)
- NOT Eligible if renter is a family member or relative
Borrower Documentation
- Valid state or Govt. ID (Driver's license or passport)
- Bank statements (2-3 months)
- Credit authorization
- Entity documents (if applicable)
✓ What You DON'T Need
- • Tax returns
- • W-2s or pay stubs
- • Employment verification
- • Profit & loss statements
- • Business bank statements
- • Personal DTI calculations
Access Your Colorado Property's Equity
Whether you need funds for renovations, additional investments, or business expansion, DSCR second loans provide the flexibility you need without disrupting your existing first mortgage.
Colorado DSCR Second Loan FAQs
BUT, if you want a DSCR HELOC, the new HELOC will payoff the existing first mortgage and become your new first lien. This works best if you have a high interest rate first lien, a small balance or own it free and clear.