DSCR Loans Colorado
Understanding Colorado DSCR Loans
Colorado Debt Service Coverage Ratio (DSCR) loans provide an alternative financing option for real estate investors who may not qualify for traditional loans due to unconventional income verification. Unlike conventional mortgages, DSCR loans, also known as non-QM loans, do not require pay stubs, W-2s, or tax returns to establish eligibility.
How Is DSCR Calculated?
To qualify for a DSCR loan, lenders calculate the Debt Service Coverage Ratio, a critical metric that measures the property’s potential to generate enough rental income to cover the mortgage payments. The DSCR is calculated by dividing the gross rental income by the total annual debt, which includes principal, interest, taxes, insurance, and any applicable HOA payments.
What DSCR Do Lenders Look for?
Lenders typically seek a DSCR above 1, indicating that the rental income is sufficient to cover the mortgage payments. Griffin Funding offers DSCR loans to individuals with a DSCR of 0.75 or higher, with better loan terms available for DSCRs above 1.25.
Benefits of a DSCR Loan
DSCR loans offer several advantages for investors, including quick closing times, no income verification requirements, the ability to invest in multiple properties without limits, loan amounts up to $5,000,000, and down payments starting at just 20%. They are suitable for both seasoned and new investors and can be used for short-term and long-term rental properties.
Requirements for a DSCR Loan in Colorado
To qualify for a DSCR loan, borrowers must meet specific criteria, including a good DSCR ratio, usually above 1. Additionally, a down payment is required, and DSCR loans are not suitable for purchasing owner-occupied properties. Lenders also consider the borrower’s credit score.
Down Payment Requirements
While DSCR loans do require a down payment, Griffin Funding offers options with down payments as low as 20%. A larger down payment can reduce monthly loan payments, making it a consideration for borrowers.
proudly provides DSCR loans and other services in cities across Colorado, including Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, and more.
Apply for a Colorado DSCR Loan Today
If you’re an investor seeking to enter the real estate market, Colorado DSCR loans could be the ideal solution.DSCR loans with competitive down payment options and favorable terms. If DSCR loans are not suitable for your needs, Griffin Funding offers various other non-QM loan options tailored to individual circumstances. To find out more or begin the application process, contact us at (855) 394-8288 or fill out our online application.