The Quick Read: A DSCR loan on a Telluride rental qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, so the steps run from confirming the property may be rented as planned, to choosing an income method, to running the ratio, to the appraisal, and then entity, credit, and reserves. Resort pricing makes the coverage math harder here than in a typical rental market. Licensing and HOA rules decide whether the income you plan to count is usable at all.
- Telluride balances sit near the top of the standard loan range, so reserves and leverage rules matter early.
- Many select programs start at 1.00 coverage. A separate select-lender path goes below 1.00, with leverage and terms adjusted.
- Short-term rental files typically want about 12 months of hosting history, and the program sets the leverage.
- HOA dues sit inside the ratio, and in resort buildings they can decide the file.
- Confirm license eligibility and the HOA rental policy before you make an offer, not after.
What Is a DSCR Loan and How Does the Ratio Work?
A DSCR loan measures the property’s rent against the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. Divide the rent used for lender review by that total (PITIA). The result is the coverage ratio.
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 29, 2026
Prefilled with starting assumptions — enter your own rent or nightly figures, taxes, insurance, and HOA for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 29, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Here is how to read it. A ratio of 1.00 means rent equals the obligation. Above 1.00 means rent exceeds it. Below 1.00 means rent falls short. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Your W-2s and debt-to-income ratio are not the center of the file. The property, your credit profile, and your reserves are.
One caution. Clearing 1.00 is not the same as positive cash flow. The ratio leaves out repairs, vacancy, management, utilities, and capital expenses. A Telluride owner carries every one of those.
For the broader mechanics, see the complete DSCR loans guide.
Why Is Telluride Different From a Typical DSCR Market?
Telluride is a resort market with high prices, thin sales volume, and rules that can change what a property is allowed to earn. Each of those hits a DSCR file in a specific place.
Start with price. Raible Team’s monthly market update reported 49 closings across Telluride and Mountain Village, with a median sale price of $2,850,000. The same report showed a median of 247 days on market. These are broker-published figures, so treat them as directional.
What that means for the file is simple. Few closings means few appraisal comparables. A median that high puts many loans near the top of the standard range. Across the wholesale network, standard programs run up to about $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Reserves also step up with size, which the program section below covers.
Then comes the property itself. Most Telluride purchases are underwritten as short-term or vacation rentals. The appraiser’s long-term rent estimate and the nightly-rate income can be far apart. That gap is the main reason Telluride files pass or fail.
How Do You Get a DSCR Loan for a Telluride Rental Property?
Work the steps in this order. The order matters because the early steps can end the deal before you spend money on the later ones.
1. Confirm the property can be rented the way you plan. Check the license category and the HOA declarations first. If nightly rentals are not allowed, the income plan changes and so does the ratio.
2. Pick the income method. The long-term path uses the lease or the appraiser’s market rent. The short-term path uses documented platform history or a projection from a market-data service, depending on the program.
3. Run the ratio before you offer. Use the full PITIA, including HOA dues. If coverage lands below your target, adjust the structure now, not during the file.
4. Order the appraisal. The appraiser gives the value and the rent schedule. Form 1007 is the rent schedule for a single-family property. Form 1025 is the small multifamily form for 2-4 units. Plan for comparable-sale scarcity here.
5. Set up the entity and credit. If you buy in an LLC, the structure is subject to lender program eligibility, so confirm it before you form the entity. Pull your credit and know where you sit against the tiers below.
6. Document reserves. Statements for the assets you plan to count go in early. Reserves are one of the most common reasons a clean-looking file stalls.
7. Clear title, insurance, and HOA paperwork. Title questions, a complete HOA questionnaire, and an insurance quote that fits a rental are the usual gaps.
What Should You Verify Before Making an Offer?
Verify three things first: the license category, the HOA rental policy, and which jurisdiction the property sits in. A property can look strong on paper and still have its nightly income capped or blocked.
The Town of Telluride and Mountain Village are separate jurisdictions with their own licensing and collection. A rule that applies in one does not carry into the other. Telluride’s short-term rental regulations set out the license requirement and residential-zone rules. The Town’s STR info packet separates classic, residential, and long-term license types.
The Colorado Bar Association’s review of short-term rentals notes that residential zone districts limit how often a property can rent and that the number of licenses is capped. That article is dated, so check the current code before you rely on it.
Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
The HOA is the second gate. Declarations can restrict rentals or require a rental program regardless of what the town allows. HOA dues also feed the denominator of the ratio. One local broker blog on HOA communities in Telluride’s luxury market cites Mountain Village listings with quarterly dues of $9,459 and $12,056. Those are listing-level examples, not market averages. They show how dues can swing coverage on their own.
Ask the HOA for the declarations, the rental policy, and the questionnaire before you spend on an appraisal. A questionnaire that comes back incomplete holds up the file.
How Do Lenders Count Short-Term Rental Income?
Programs count it one of three ways: the appraiser’s long-term rent, documented history, or a market-data projection. Which one applies depends on the lender and the program. Confirm the method before you choose where to apply.
| Income method | What it uses | Typical friction |
|---|---|---|
| Long-term rent | Lease or Form 1007 rent | Understates a resort STR |
| Documented history | Platform and manager statements | Needs about 12 months of hosting |
| Market-data projection | Projection report | Lender-specific treatment |
On the network’s short-term rental programs, a 640+ score is typical and about 12 months of hosting history is the common expectation. A new purchase has no history of its own. In that case the file usually leans on the appraiser’s rent schedule, and how much of a projection counts depends on the program.
Projection reports support the income side. They do not replace the appraisal on the value side. The appraiser still has to support the price with comparable sales.
Seasonality matters too. Telluride income runs high in the peak months and thinner in the shoulder seasons. A lender looking at 12 months of statements sees the full curve averaged. A single strong winter on a projection does not carry the same weight.
What Do Passing and Failing Telluride Files Look Like?
Two hypothetical files show how this plays out. These are illustrations of the method, not market data.
File one, a single-family house with no HOA dues. Rent comes from a documented STR history. The income is supported and the denominator carries only principal, interest, taxes, and insurance. Coverage clears roughly 1.1x at moderate leverage. This file reads cleanly.
File two, a Mountain Village condo with heavy quarterly dues. The purchase price is similar. The dues sit in the denominator, and the appraiser’s long-term rent is modest. Coverage lands near 0.8x. This file does not clear 1.00 on rent alone.
When a ratio falls below 1.00, the paths a lender may review include a select-lender program below 1.00, with leverage and terms adjusted, an interest-only period, or documented short-term income in place of the long-term rent. Whether any path fits depends on lender guidelines, credit approval, and property review.
If the ratio falls short, these levers can help:
| Lever | Effect on the file |
|---|---|
| Larger down payment | Lowers the payment and can lift the ratio |
| Lower-HOA property | Shrinks the denominator |
| Documented STR income | Replaces a low long-term rent |
| Interest-only period | Lowers the qualifying payment |
| Different property type | Changes rent-to-price relationship |
A larger down payment helps the ratio, but it never removes leverage caps, credit floors, reserve rules, or property eligibility. The strongest files pass both tests: enough equity and enough rental coverage.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
What Program Ranges Apply?
Across the wholesale network, these are typical ranges. They are guidance, not guarantees, and every file is underwritten individually.
| Item | Typical range |
|---|---|
| Purchase LTV, investment property | 75%-80%; select programs to 85% at about 700+ |
| Cash-out refinance LTV, standard rental | Up to about 75% |
| STR purchase LTV | Up to 75% |
| STR refinance and cash-out LTV | About 70% on STR collateral |
| Credit score | 620 floor in parts of the network; most want about 660; 700+ for top tiers |
| Reserves | Around 6 months PITIA; about 9 above $1,500,000 |
| Loan size | Up to about $3,000,000 on standard programs |
On reserves, the number varies by lender, leverage, loan size, and transaction type. Conservative rate-and-term files at modest leverage under $1,500,000 can see reserves waived. Telluride balances often sit above that line, so plan for the higher figure.
On short-term rental files, expect a 640+ score and about 12 months of hosting history. The coverage floor is 1.00 on STR purchases and, separately, 1.00 on STR refinances.
Cash-out on a seasoned property typically expects about 6 months of ownership. That matters if you plan to pull equity after a renovation.
Which Property Types Fit?
Single-family homes and 2-4 unit properties fit most programs. Condos and townhomes fit too, but the HOA questionnaire and the building’s rental rules carry weight.
Condo-hotel, fractional, and rental-pool units are their own sub-market. Mountain Village has many condos and fractional interests. Eligibility depends on the program and the property type, so confirm it before you write an offer.
Some mountain property types are not offered at all. Manufactured homes (single- and double-wide), log homes, and barndominiums fall outside the network’s DSCR programs. Log construction is common in mountain towns, so check the construction type early.
What About LLCs and Owning More Than One Property?
You can close in an LLC on most DSCR programs, subject to program terms. Have the operating agreement, the articles, the EIN letter, and the member list ready. Missing entity documents are a quiet source of delay.
When Is a DSCR Loan Not the Right Fit?
Skip DSCR when the property cannot legally or practically produce the rent you need. If the license is restricted and the long-term rent cannot cover the payment, no structure fixes that.
It is also the wrong tool if you plan to live in the property. DSCR is for investment use only.
For a buyer with strong personal income and a second-home plan, a conventional loan may fit better. For an investor who wants income-based qualification, an entity, and no reliance on personal income documentation, DSCR is built for that. In that case qualification runs on the property’s income.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
DSCR: the debt service coverage ratio, which divides rent used for lender review by the monthly PITIA.
PITIA: principal, interest, taxes, insurance, and association dues, the full monthly obligation on the property.
Form 1007: the appraiser’s rent schedule for a single-family property.
Form 1025: the appraisal form for small multifamily properties of 2-4 units.
Reserves: liquid assets set aside, counted in months of PITIA.
Seasoning: the minimum time you must own a property before a cash-out refinance is available.
Frequently Asked Questions
Can you use a DSCR loan for a Telluride short-term rental?
Yes, on programs that accept short-term rental income, subject to lender guidelines. Expect a 640+ score and about 12 months of hosting history.
What coverage ratio do I need?
Many select programs start at 1.00, and stronger ratios open better pricing and leverage. Which one fits depends on your credit, reserves, and the property.
Does a bigger down payment fix a low ratio?
It helps, because a lower payment can lift the ratio. It does not remove leverage caps, credit floors, reserve rules, or property eligibility. Plan to pass both the equity test and the coverage test.
Do Telluride loan sizes fit standard DSCR programs?
Often yes. Standard programs run up to about $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Reserves typically step up to about 9 months above $1,500,000.
Can I buy a log home or a barndominium?
Not through these programs. Log homes, barndominiums, and manufactured homes are not offered in the network’s DSCR lending.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire is a mortgage broker arranging DSCR financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. This is not a commitment to lend, and programs change.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Raible Team – Telluride and Mountain Village Market Update
2. Town of Telluride – STR Info Packet
3. Colorado Bar Association – The State of Short-Term Rentals in Colorado
4. Chris Sommers – Understanding HOA Communities in Telluride’s Luxury Market
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get an Escrow Waiver Approved on a DSCR Rental Loan · How to Buy a Johnson City Rental With a DSCR Loan · Can a Trust Hold a Property Financed With a DSCR Rental Loan?
Guides: DSCR Loans in Telluride, CO · DSCR Loans in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.