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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:

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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).

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

 

 

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.

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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).

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.

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.

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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.

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