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DSCR Rental Loan Highlights
- Qualification based mainly on property cash flow (DSCR).
- No personal income docs required for many programs.
- Financing for 1–8 unit rentals, portfolios, and many STR/Airbnb deals.
- Up to 80% LTV on purchases and 75% LTV on cash-out (program-dependent).
- 30-year fixed and interest-only options available.
Unleashing Your Capital: The Power of a Cash-Out Refinance for Short-Term Rentals
The real estate market, especially in vibrant destinations like Colorado Springs, is a goldmine for savvy investors. While buy-and-hold strategies are effective, there’s a powerful tool that allows you to tap into your property’s equity to fuel your next acquisition or make significant upgrades: the cash-out refinance for short-term rental. This strategy is a game-changer, enabling you to expand your portfolio without selling a single asset.
This authoritative guide will walk you through how a cash-out refinance works for short-term rentals, the specific requirements and benefits, and how you can leverage it to maximize your investments in the high-demand Colorado Springs market.
The Investor’s Advantage: Why a Cash-Out Refi is Your Best Move
A traditional cash-out refinance requires extensive documentation of personal income, debt-to-income ratios, and tax returns, a process that can be both slow and restrictive. This is where a specialized financing product—often a DSCR (Debt Service Coverage Ratio) loan—shines.
Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!
⚡ Key Flexible Funding Options:
GHC Funding everages financing types that prioritize asset value and cash flow over lengthy financial history checks:
DSCR Rental Loan
- No tax returns required
- Qualify using rental income (DSCR-based)
- Fast closings ~3–4 weeks
SBA 7(a) Loan
- Lower down payments vs banks
- Long amortization improves cash flow
- Good if your business occupies 51%+
Bridge Loan
- Close quickly — move on opportunities
- Flexible underwriting
- Great for value-add or transitional assets
SBA 504 Loan
- Low fixed rates through CDC portion
- Great for construction, expansion, fixed assets
- Often lower down payment than bank loans
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For details on GHC Funding's specific products and to start an application, please visit our homepage:
A DSCR-based cash-out refinance for a short-term rental is underwritten based on the property’s income-generating potential, not your personal finances. Lenders use a combination of historical rental data and market analysis to determine the property’s value and income, allowing you to bypass the cumbersome paperwork of traditional mortgages. This streamlined process means you can access your equity faster, a critical advantage in a competitive market.
Understanding DSCR for Short-Term Rentals
For a short-term rental, the DSCR is calculated by comparing the property’s projected rental income to its debt service (PITI). The loan is approved if the projected income is sufficient to cover the mortgage payment, often with a cushion. This model recognizes that a short-term rental‘s income can fluctuate, and it provides a flexible underwriting approach that benefits investors with multiple properties or those who prefer to keep their personal finances private.
Current DSCR Cash-Out Refinance Insights
For investors in the robust Colorado Springs market, here are the current realities:
- Interest Rates: Rates are competitive, reflecting the property’s strength rather than personal credit. Expect a rate range of get quote. The exact rate depends on:
- Loan-to-Value (LTV): Lower LTVs (e.g., 65-70%) typically secure the most favorable rates.
- DSCR Ratio: A strong DSCR, often 1.25 or higher, is a key factor in securing a better rate.
- Credit Score: While not the primary factor, a score of 680+ is generally required, with the best rates reserved for scores above 720.
- Requirements:
- No Personal Income Verification: The biggest benefit. Your W-2s and tax returns are not required.
- Entity Ownership: Loans are typically made to a business entity (LLC, S-Corp), a standard practice for real estate investors.
- Property Types: This product is ideal for single-family homes, condos, and multi-family units that are already operating as short-term rentals.
Colorado Springs: A Premier Market for Short-Term Rentals
Colorado Springs is a prime location for short-term rentals, thanks to its stunning natural beauty and strong economic drivers. With attractions like Pikes Peak, Garden of the Gods, and the U.S. Air Force Academy, the city draws millions of tourists annually, ensuring a steady stream of rental income.
Geo-targeted SEO for Colorado Springs real estate investors must consider specific neighborhoods and zip codes that are particularly lucrative for short-term rentals. For example, properties in Old Colorado City (80904) and Downtown Colorado Springs (80903) are highly sought after by tourists for their historic charm and walkability. A cash-out refi on a mountain cabin in Manitou Springs (80829), nestled at the base of Pikes Peak, could provide the capital to acquire a duplex near Fort Carson, catering to military families.
For investors to stay ahead in this market, these high-quality resources are essential:
- Pikes Peak Association of REALTORS: Your go-to for local market data and professional networking. https://ppar.org/
- El Paso County Assessor’s Office: Research property values, tax history, and ownership details. https://assessor.elpasoco.com/
- Colorado Division of Real Estate: Stay informed on state-level regulations and licensing. https://dre.colorado.gov/
- Invest in Colorado Springs: A local-focused blog with market insights and investment tips. https://investincoloradosprings.com/
GHC Funding: Your Strategic Capital Partner
For a cash-out refinance for short-term rental in the Colorado Springs area, you need a lender who understands the unique nature of your business. GHC Funding specializes in investor-centric financing, offering a streamlined process that respects your time and portfolio goals.
We are uniquely positioned to serve as your go-to lender, with flexible underwriting and deep market expertise. We understand that your short-term rental property’s cash flow is the most accurate measure of its value, and we use this principle to provide you with the capital you need, when you need it.
In addition to our DSCR loans, we provide a full spectrum of financing solutions, including SBA 7a loans, SBA 504 Loans, Bridge Loans, and other Alternative Real Estate Financing. Our goal is to be your partner at every stage of your investment journey. Visit www.ghcfunding.com to see how we can help you unlock the potential of your portfolio.
FAQs: Cash-Out Refinance for Short-Term Rentals
Q1: What is the maximum LTV I can expect on a DSCR cash-out refinance?
A: Typically, lenders will offer an LTV of up to 75% for a cash-out refinance, though this can vary based on your credit score and the property’s DSCR.
Q2: Can I use the cash from the refinance for any purpose?
A: Yes, the cash you receive from the refinance is yours to use as you see fit. Most investors use it for a down payment on a new property, for property renovations, or to pay off high-interest debt.
Q3: How is the DSCR for a short-term rental calculated if the income is seasonal?
A: Lenders will use an income projection report, often from a third-party service, that analyzes historical rental data for comparable properties in your area. This provides a more accurate, year-round picture of your property’s earning potential.
Q4: Do I have to personally guarantee the loan?
A: DSCR loans are typically non-recourse, meaning you are not personally liable for the debt. This protects your personal assets in the event of default.
Q5: How long does the cash-out refinance process take?
A: Thanks to the streamlined, income-based underwriting process, a DSCR cash-out refinance can close much faster than a conventional loan—often within 30 days.
Q6: What property types are eligible for this loan?
A: Single-family homes, condos, and multi-family properties (up to 4 units) that are used as short-term rentals are eligible. The property’s zoning must permit short-term rental use.
Get a Free Rate Today
Compare our top-rated commercial and investment property loan programs below.
- No income verification
- 30-year fixed | Interest-only available
- Great for rental properties + STR
- Fast approvals
- Working capital + business acquisition
- Up to $5M
- Low down payment
- Long-term financing
- Owner-occupied CRE
- Low fixed rates | 25-year terms
- Great for business expansion
- Refinance available
- Best for stabilized properties
- Competitive rates
- 12–25 year terms
- Lower fees than private lenders
Compare Loan Types
Find the Right Financing for Your Real Estate or Business Project
| Loan Type | Best For | Rates | Terms | Highlights | Apply |
|---|---|---|---|---|---|
| DSCR Loan | Rental properties (LTR & STR) | 5.99%+ | 30-year fixed, IO options | No income docs, fast approvals, great for investors | Check My Rate |
| Construction Loan | Ground-up, fix & build, major renovations | 8%–12% depending on scope | 12–24 months interest-only | Flexible draws, great for builders & developers | Get a Quote |
| SBA Loan | Business acquisition, working capital, CRE | Prime + spread | 10–25 years | Lowest down payments, long terms, best for business growth | See My Options |
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Read more →Your Path to Growth Starts Now
Your short-term rental property in Colorado Springs is more than just a source of income; it’s a strategic asset. A cash-out refinance is the key to unlocking its full potential and propelling your real estate investment career to the next level.
Ready to get started?
Visit www.ghcfunding.com or call us today at 833-572-4327 to discover how a cash-out refinance can fuel your next venture.
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