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The Best Alternative Financing Options to Refinance a Rental Property in Colorado

DENVER, CO – AUGUST 13, 2025: Colorado’s real estate market is as dynamic as its mountain landscapes. From the bustling urban core of Denver to the ski towns of Summit County, opportunities abound for real estate investors. However, traditional financing often struggles to keep up with the pace and complexity of a growing investment portfolio. This is where exploring alternative financing options becomes not just an advantage, but a necessity. The best alternative financing options to refinance a rental property in Colorado allow you to leverage your existing assets, free up capital, and scale your business without the limitations of conventional loans.

Alternative Financing Options to Refinance:

The Power of DSCR Loans for Colorado Investors

When it comes to alternative financing, one of the most powerful tools available to real estate investors today is the DSCR loan. DSCR stands for Debt Service Coverage Ratio, and it represents a modern, asset-based approach to lending. Instead of focusing on your personal income and tax returns, a DSCR loan underwrites the property itself. The lender simply assesses the property’s ability to generate enough income to cover its own expenses.

This is a game-changer for investors in Colorado who are often “asset-rich” but may not have a traditional W2. It allows you to prove your creditworthiness through your portfolio’s performance, enabling you to expand your holdings in lucrative markets like Boulder (Zip Code 80302), Colorado Springs (80903), or the Denver Highlands neighborhood (80211).

How is DSCR calculated?

The formula is straightforward:

DSCR = Gross Rental Income / Total Debt Service (PITI)

A DSCR of 1.0 means the property’s income perfectly covers its expenses. Most lenders, however, prefer a ratio of 1.20 or higher, which demonstrates a strong, cash-flowing asset. This is a powerful metric that allows you to bypass the scrutiny of personal debt-to-income ratios and unlock your portfolio’s full potential.

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

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If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

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Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Current Market Insights and Loan Requirements (as of August 13, 2025)

The Colorado real estate market, while strong, has seen shifts in recent years, making strategic refinancing all the more important. Here’s what you need to know about alternative financing today:

Current Interest Rates: As of today, August 13, 2025, interest rates for alternative financing like DSCR loans are typically ranging from 7.00% to 8.50%. These rates are often influenced by:

• Loan-to-Value (LTV): A lower LTV, signifying more equity in your property, will result in a more competitive rate.
• Credit Score: While a W2 isn’t required, your credit score is still a key factor, with scores of 720 and above qualifying for the best terms.
• Property Type: Properties in high-demand areas, such as a duplex in the Capitol Hill neighborhood of Denver (80203) or a single-family rental in the growing Parker market (80134), are often viewed more favorably.

Key Requirements: One of the main reasons investors turn to alternative financing is the simplified application process. You can expect:

• No Personal Income Verification: The underwriting is based on the property’s rental income, not your personal tax returns, W2s, or pay stubs.
• Entity-Based Lending: These loans are typically made to LLCs or other business entities, which is standard for professional real estate investors.
• Flexible Property Types: Lenders are open to a wide range of properties, including single-family homes, townhomes, condos, and multi-family units (up to 4 units).

Ultimate Rental Property Loan Quiz

Navigating the world of real estate investment can be complex, especially when it comes to financing. Securing a loan for a rental property is a critical step for any aspiring landlord. This quiz is designed to test your knowledge on this important topic and help you understand the key factors involved in the process.

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Page 1 of 5

For a first-time real estate investor, what is a common hurdle when trying to secure financing? A) Lenders offer lower interest rates for a first loan for a rental property. B) There are no documentation requirements for a first loan for a rental property. C) A higher down payment is often required for a loan for a rental property. D) The approval process for a loan for a rental property is typically faster for new investors.

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Which factor is most heavily scrutinized by lenders when evaluating a borrower's application for investment property financing? A) The borrower's debt-to-income (DTI) ratio before the new loan for a rental property. B) The number of rooms in the property being considered for the loan for a rental property. C) The color of the property when applying for the loan for a rental property. D) The borrower's political affiliation when seeking a loan for a rental property.

Page 3 of 5

What is a significant benefit of using a cash-out refinance on your primary residence to purchase an investment property? A) It provides the funds for a down payment, but you'll still need a separate loan for a rental property for the remaining balance. B) Using a cash-out refinance means you can avoid the appraisal process that is standard with a loan for a rental property. C) The interest rate on a cash-out refinance is always higher than the rate for a traditional loan for a rental property. D) A cash-out refinance has no closing costs, unlike a standard loan for a rental property.

Page 4 of 5

What is the main purpose of getting a pre-approval letter from a lender before you start looking for investment properties? A) A pre-approval letter is a binding contract that forces the bank to give you a loan for a rental property. B) Getting pre-approved demonstrates to sellers that you are a serious buyer who is financially qualified to obtain a loan for a rental property. C) A pre-approval letter locks in your interest rate for a loan for a rental property for one year. D) You are required by law to have a pre-approval letter before you can make an offer on any home that needs a loan for a rental property.

Page 5 of 5

For an investor planning to buy, renovate, and quickly sell a property (a "fix and flip"), what type of financing is most suitable? A) A 30-year fixed-rate mortgage is the best loan for a rental property in this scenario. B) A short-term bridge or hard money loan, as this type of loan for a rental property is designed for quick turnarounds. C) A reverse mortgage is the standard type of loan for a rental property used by flippers. D) A government-backed FHA loan for a rental property is ideal for short-term investment projects.

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GHC Funding: Your Go-To Lender for Colorado

In a market defined by its diverse geography and strong economic drivers—from the tech boom in Boulder to the tourism industry in the Colorado Rockies—you need a lender who understands your unique investment needs. GHC Funding provides a variety of financial tools perfectly suited for this environment, including DSCR Loans, SBA 7a loans, SBA 504 Loans, Bridge Loans, and Alternative Real Estate Financing.

Imagine you have a mountain retreat in Breckenridge that you’ve been using as a successful short-term rental. A DSCR loan refinance from GHC Funding could allow you to cash out on that property’s equity to acquire a long-term rental in the more affordable Pueblo market (81001) or a value-add property near the University of Colorado in Boulder. Their flexible underwriting process and market expertise mean they can offer competitive rates and a streamlined experience that traditional lenders simply can’t match.

Quiz on Colorado Rental Property Laws

This quiz will test your knowledge of the essential laws and regulations for owning and managing a Colorado rental property. By understanding these rules, you can protect your investment and ensure legal compliance.

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Page 1 of 5

What is the maximum amount of a security deposit a landlord can legally charge for a Colorado rental property? A) The maximum security deposit is two months' rent. B) Colorado law sets the maximum security deposit at two months' rent for a Colorado rental property, with specific provisions for tenants with poor credit. C) There is no legal limit on the security deposit amount. D) The maximum security deposit is one month's rent.

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How long does a landlord have to return a security deposit after a tenant moves out of a Colorado rental property? A) A landlord must return the security deposit within 30 days of the tenant vacating the Colorado rental property, or within a shorter period if specified in the lease. B) A landlord has 60 days to return the deposit. C) A landlord must return the security deposit within 15 days. D) A landlord can hold the deposit for as long as they need to assess damages.

Page 3 of 5

What is a key requirement for a landlord's entry into a Colorado rental property? A) Landlords can enter at any time without notice. B) Landlords must provide at least 24 hours' notice before entering, except in an emergency, which is a key legal requirement for a Colorado rental property. C) Landlords must provide 48 hours' notice for entry. D) Landlords can only enter the property with the tenant's explicit, written permission for each visit.

Page 4 of 5

What is the legal process for evicting a tenant from a Colorado rental property for non-payment of rent? A) The landlord can change the locks immediately after rent is late. B) The landlord must provide the tenant with a three-day demand for compliance or possession before filing an eviction lawsuit in court, which is the official legal procedure for a Colorado rental property. C) The landlord must give 30 days' notice before filing for eviction. D) The landlord can shut off the utilities to force the tenant to move out.

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What is a landlord's duty to maintain a Colorado rental property? A) The landlord's duty is limited to ensuring the property is structurally sound. B) A landlord is required to maintain the property to be "fit for human habitation" and in compliance with all housing codes, a key legal obligation for a Colorado rental property. C) The landlord is not responsible for any repairs, which are the tenant's responsibility. D) The landlord's only duty is to ensure the tenant has access to water and electricity.

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Frequently Asked Questions (FAQ) for Colorado Investors

• Q1: What is a DSCR loan refinance, and why is it ideal for me?A DSCR loan refinance allows you to replace your current mortgage with a new one based on the property’s rental income rather than your personal finances. This is ideal for investors with multiple properties who want to scale without traditional debt-to-income ratio limitations.
• Q2: Can I get a DSCR loan on a property I’m about to purchase?Yes, DSCR loans are available for both purchases and refinances. For a new purchase, the lender will use a projected rental income analysis to determine the DSCR.
• Q3: Is a DSCR loan more expensive than a conventional loan?DSCR loans may have slightly higher interest rates than conventional loans, as they are considered a higher-risk product. However, the trade-off is the flexibility and ease of qualifying, which allows investors to grow their portfolios faster.
• Q4: Do I need a perfect credit score to get a DSCR loan?While a good credit score is important for the best rates, lenders often have more flexible requirements, sometimes accepting scores as low as 660.
• Q5: Can I use the cash-out funds from a DSCR refinance for any purpose?Generally, yes. The cash-out funds from a DSCR loan can be used for any purpose, including renovations, acquiring new properties, or covering business expenses.
• Q6: What is the typical timeframe for closing a DSCR loan refinance?One of the major benefits of alternative financing is speed. DSCR loans can often close faster than conventional loans due to the simplified documentation process.

Helpful Resources for Colorado Real Estate Investors

To thrive in the Colorado market, it’s essential to stay connected and informed. Here are some valuable resources:

• Investment Community of the Rockies (ICOR): A respected real estate investor association with chapters in Denver, Colorado Springs, and Fort Collins.
• Colorado Division of Real Estate: The official state agency for real estate licensing, regulation, and information.
• Colorado Association of REALTORS®: Provides up-to-date market data and insights for real estate trends across the state.
• Denver Metro Association of Realtors: Offers specialized resources and market data for the Denver metro area, including key zip codes and neighborhoods.

Unlock the Potential of Your Colorado Portfolio

Your investment strategy deserves a financing solution that works as hard as you do. Stop letting outdated lending practices limit your growth. Alternative financing, particularly a DSCR loan refinance, is the key to unlocking the equity in your properties and accelerating your path to financial freedom.

Ready to explore your options? Visit www.ghcfunding.com to learn more about our specialized loan products, or call GHC Funding at 833-572-4327 to speak with a financing expert who understands the Colorado real estate market.

Unlock the Potential of Your Colorado Portfolio

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

At GHC Funding, we are commercial finance specialists who guide real estate investors and business owners through the world of alternative lending. Our primary focus is on securing the right capital for your specific goals, whether that's a cash-flow-based DSCR loan for your rental portfolio, an SBA loan to grow your company, or a bridge loan to close a deal quickly and efficiently.

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